Delta ramps up rhetoric against Gulf carriers in video

"In our market, we will be overrun if we don't wake up," Delta CEO Ed Bastian said in the video.
"In our market, we will be overrun if we don't wake up," Delta CEO Ed Bastian said in the video.

Delta is lobbying its own employees to engage in the carrier's push for U.S. sanctions against Emirates, Etihad and Qatar as the dispute between the major U.S. international airlines and their Gulf counterparts intensifies.

In a 15-minute video that the carrier put out early this month, Delta warns employees that unchecked expansion by the Gulf carriers could lead to the U.S. aviation industry going the way of the steel and shipbuilding industries before it.

"The rules of business just don't apply to these airlines," former U.S. trade representative Charlene Barshefsky says in the video.

Delta along with United, American and U.S. airline industry labor unions accuse the Gulf carriers of accepting a combined $50 billion in state subsidies since 2004, contravening bilateral aviation agreements between the U.S. and the United Arab Emirates (UAE) and Qatar. The Gulf carriers deny the charges.

JetBlue, Hawaiian, cargo carriers Atlas and FedEx, and travel industry lobbying groups including the U.S. Travel Association oppose the efforts of the Big 3 to have the federal government stymie Gulf carrier expansion.

The Big 3 and their union allies have stepped up their campaign against the Gulf carriers since the Trump administration took office.

Delta has titled its effort to enlist employees in the dispute "Our Future Our Fight." The carrier has also set up an website where its 80,000 employees can take action.

The video portrays the Gulf carriers as a threat to the very underpinning of the U.S. airline industry. At one point, the video describes their business models as one focused squarely on expansion without regard for profits.

"And eventually, once they have driven everybody else out of business on these routes, then they can price pretty much as they please," said Jim Burnley, a Department of Transportation secretary during the Reagan administration.

The UAE and Qatar are undertaking these efforts, the video says, because they know that they can't rely on oil alone for economic strength.

Already, Delta and American have pulled out of India due to Gulf carrier competition, said Delta CEO Ed Bastian. But Delta, he said, will return to India when it wins the political fight.

A demise of U.S. aviation would be painful for the U.S. military, the video says, since U.S. airlines are employed by the government to move troops around the world.

"In our market, we will be overrun if we don't wake up," Bastian said.

Despite the ominous warnings produced by Delta, the Gulf carriers have substantially slowed their U.S. growth in the past three years.

Of the combined 29 routes the carriers currently fly to the U.S., 14 began between 2012 and 2014. Gulf airlines have launched just five U.S. routes since then. Meanwhile, Etihad plans to suspend its San Francisco service in October and Emirates recently reduced frequencies on five of its 12 U.S. routes.

Emirates and Etihad have also slowed expansion network-wide as they face a variety of economic challenges, including overcapacity and the weak energy sector.

Emirates is slated to fly just 1.1% more seats in the third quarter of this year than it did last year, compared with a growth rate of 11.5% a year earlier. Meanwhile, Etihad is slated to grow by 2.7% in the third quarter, compared with the 10.8% growth it enjoyed in the third quarter of last year.

Qatar had planned a more aggressive seat growth of 10.5%. But the diplomatic dispute between Qatar on one side and the UAE, Egypt, Saudi Arabia and Bahrain on the other means the carrier's seat capacity could drop by 11.1% in the third quarter, according to a forecast by the aviation analytics company OAG.

JDS Travel News JDS Viewpoints JDS Africa/MI