News

United withdraws from Dubai

9 Dec 2015 by Alex McWhirter

United Airlines will stop flying between Washington Dulles and Dubai from next month.

The American carrier blamed subsidised Gulf airlines and inaction on the part of the US government for its decision.

The announcement comes six weeks after Delta Air Lines said it is cancelling its Atlanta-Dubai service (see news, October 28). It, too, blamed “heavily-subsidised” Middle Eastern carriers.

In July, United’s then-CEO Jeff Smisek said the Open Skies agreement had been “terribly abused” by the Gulf airlines (see news, July 17).

United said in a statement today: “Due to Gulf carriers’ expansion and a recent US government decision, we are discontinuing our Washington Dulles-Dubai service.

“Our last departure from Washington DC to Dubai will be on January 23 and the last departure from Dubai will be on January 25. Our joint venture partners Lufthansa Group and Air Canada will continue to serve Dubai…

“Even though we successfully operated the Washington-Dubai route for the past seven years, the entry of subsidised carriers such as Emirates and Etihad Airways into the Washington DC market has created an imbalance between supply and demand to the United Arab Emirates. As they’ve added subsidised capacity, our Washington-Dubai route has become less profitable.

“In August, the General Services Administration (GSA) announced that it awarded the US government contract for 2016 on the Washington-Dubai route to JetBlue, a codeshare partner of Emirates. We formally protested this decision but were ultimately unsuccessful.

“JetBlue has no service to the Middle East and no presence in the region. Its codeshare partner, Emirates, will be solely operating this route and will be carrying an estimated 15,000 US government employees, including active duty military personnel, whose official travel is funded by US taxpayers.

Steve Morrissey, United’s regulatory and policy vice president, said: “It is unfortunate that the GSA awarded this route to an airline that has no service to the Middle East and will rely entirely on a subsidised foreign carrier to transport US government employees, military personnel and contractors.

“We believe this decision violates the intent of the Fly America Act, which expressly limits the US government from procuring commercial airline services directly from a non-US carrier. For the Washington to Dubai route, JetBlue merely serves as a booking agent for Emirates.

“For months, we’ve been speaking out about the ways unprecedented government subsidies to Etihad, Emirates and Qatar Airways distort competition and threaten US airline jobs. We continue to call on the Obama administration to request consultations with the United Arab Emirates and Qatar to ensure Open Skies agreements are being enforced.”

Alex McWhirter, Business Traveller‘s consumer editor, said: “With United announcing its retreat from the Gulf, it will leave just Delta as the sole US carrier serving the region.

“But look again and you see that Delta also plans to exit the Gulf. It will terminate its Atlanta-Dubai service in February, a month after United.

“Critics argue that the US carriers simply could not compete with their Gulf rivals. Not only do the latter have plushed premium products but they also operate the A380, which is a firm favourite with passengers.

“And while it is true that the US carriers do not have the opportunities to carry beyond traffic from the Gulf, they have plenty of advantages in their home territory.

“Delta, for example, has a mammoth hub at Atlanta with connections to hundreds of destinations throughout the US hinterland.”

united.com

Tom Otley

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