British Airways parent, IAG, has left the European Airline Trade Group after a policy spat over how to deal with burgeoning Middle East carriers’ growth.
British Airways and Iberia Airlines parent, International Consolidated Airlines Group (IAG) ceased its membership of the Association of European Airlines (AEA) due to rising tensions over the increasing growth of Middle East carriers and claims they receive unfair state subsidies, leaving some airlines unable to compete.
IAG said in a statement they left the trade group because “on some important policy issues is not aligned with the other AEA legacy airlines”, the Wall Street Journal reports.
“In particular, we believe global liberalisation of our industry is fundamental to our future growth and we are not willing to compromise on this fundamental matter.”
Recently a number of European and US carriers have lobbied governments to quell Open Skies agreements of Middle East carriers including Emirates, Etihad and Qatar due to their methods behind rapid growth.
IAG has partially been owned by Qatar Airways since January when it purchased 10% in the group for 1.15 billion pounds.
As per WSJ, IAG competitors and members of AEA, Air France-KLM and Lufthansa AG are two European carriers losing market share on services to Asian cities due to increasingly competitive Middle East airlines.
Meanwhile in the US, Delta amongst other American carriers recently submitted documents to the US government to quell services allowed from Middle East airlines claiming they received unfair subsidies during years of US economic downturn following 9/11.
“Growing resistance to us from a handful of protectionist competitors could have unintended consequences well beyond limiting our development,” Etihad Airways Chief Executive James Hogan said in a statement after a meeting with EU’s transport commissioner, WSJ reported.
“If our growth is curtailed or our investments in airlines are compromised, the real damage will be to Europe in lost jobs, lost flight connectivity, lost investment in local and national economies and lost consumer choice.”