Why US Airlines Dislike Air Italy

The big US airlines are not a fan of Air Italy. The Italian carrier is 49% owned by Qatar Airways and, as a result, it is seen as a threat due to an argument over alleged subsidies. However, why would three large US carriers be afraid of one small Italian carrier?

Air Italy Qatar Airways Subsidies
Air Italy is under attack from the three big US carriers. Photo: Air Italy

Qatar Airways has been in dispute with American Airways for some time now. As a result, they have threatened to leave the oneworld alliance several times. However, these Air Italy disputes include United Airlines and Delta too. The protests from US airlines come despite Qatar repeatedly distancing themselves from involvement with the carrier.

Why the dispute?

The dispute is not just targeted at Qatar Airways. In fact, the US airlines are also upset with Emirates and Etihad. They claim that the three airlines have had an unfair advantage through $50bn worth of government subsidies. This is something the carriers strictly deny.

Now, Air Italy enters this debate as the carrier is partially owned by Qatar Airways. In fact, Qatar Airways owns 49% of Air Italy, with the remaining 51% owned by Alisarda. The US carriers believe Qatar is using the Italian carrier to expand into the US, in breach of an Open Skies agreement between the nations.

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Air Italy Qatar Airways Subsidies
Qatar’s CEO (second from right) was at the delivery of Air Italy’s first Boeing 737 MAX. Photo: Air Italy

Not worried about profitability

Business Insider was lucky enough to sit down with American Airlines CEO Doug Parker. He told them that government subsidies mean that the carriers don’t have to worry about profitability. Indeed, he says,

“The result of [government subsidies] is those three carriers fly routes without any regard to profitability and that’s a concern for those of us who do have to produce profits on our flying.”

The insinuation is that some of the alleged government subsidies (which mean profits are less important) have been handed to Air Italy. Indeed, the airline’s fleet of Airbus A330 aircraft are all former Qatar Airways aircraft.

Air Italy Qatar Airways Subsidies
Air Italy denies the allegations from US carriers. Photo: Air Italy

Strong denial

Both Air Italy and Qatar Airways have strongly denied these allegations. When asked an unrelated question about the Italian airline at a February conference, Akbar Al Baker said that questions need to be addressed to the Italian carrier as Qatar is just a minority shareholder.

Air Italy also strenuously denied the allegations. They said that,

“As of today we have a fleet of 13 aircraft, five of which are capable of operating long-haul service. While we pride ourselves on our flair and world-class service, we are puzzled (but slightly flattered) that the three very largest US carriers – which between themselves operate a fleet of more 2,500 aircraft – claim to be threatened by us.”

Do you think the US allegations are justified? Let us know in the comments!

5 comments
  1. I don’t think the US airlines have a claim here, considering that they monopolize the transatlantic traffic especially to the European countries. How can you knock Air Italy considering they have such a small fleet of planes—-how much traffic will they be taking away from the US airlines?? As a frequent flyer to Italy I find Air Italy to be an alternate to Alitalia whose future is in question, and who charges more for their flights from JFK to Milan and Rome.

  2. While I’d agree Qatar, Emirates, and Etihad are likely the beneficiaries of government financial support Doug Parker’s comment about profitability is disingenuous. Yes, they may be able to operate unprofitable or marginally-profitable routes but it’s only ‘unfair’ if they are markets where American, United or Delta compete with them and only because Qatar, Emirates and Etihad likely offer a better product (rather than a lower fare). The Big Three would have to make significant improvements to their product to win customers which would impact their bottom line. American, United, and Delta can exit markets that are unprofitable and do so regularly. Complaining about government subsidies is a red herring. Extending this deceit to include Air Italy is ridiculous and petty.

    1. It’s laughable for the domestic three airlines to suggest an unfair advantage by their governments allowing their airlines to operate without profits. How is that any different than when our government discharged the domestic carriers’ debts through bankruptcy and allowed them to continue operations. Not to mention all the subsided routes that they operate, because otherwise these routes would not be possible.

  3. Ridiculous. Are Japanese cars Nissan banned in the US ? Because Nissan the Japanese carmaker is partially owned by the French Renault in which the French government also has a share.
    The 3 US airlines don’t want competition from Air Italy that’s all.

  4. It’s ridiculous. Four routes to the US. An airline with five long-haul aircrafts it’s not competition. But I want to make an argument here. Delta, United and American offer a service with very old planes, most times with old configurations (no IFE on some old United 767 for example). I look at the aircrafts that arrive in Milan every day and sometimes we have almost 30 (thirty!!!) years old 767s. Yes, Air Italy A330s are not new, but at least they are freshly refurbished. So, before complainng, maybe Delta, American and United should start offering (Italian and American) passengers who want to fly to MIlan a better experience with new planes and better seats. Also no US carrier offers a direct service between SFO-LAX and MXP.

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