Qatar Airways May Quit Oneworld Alliance as Tensions Persist Over Subsidy Dispute

The chief executive of Qatar Airways revealed that he has delivered an ultimatum to the Oneworld Alliance that he may soon withdraw his company from the airline fraternity, due to increasingly acrimonious relations with a fellow member, American Airlines.

At a news conference in New York, Qatar’s CEO Akbar Al Baker charged that American is stirring up a “bad feeling” with a campaign joined by Delta and United, which charges that Qatar, Emirates and Etihad airlines are using illegal subsidies to compete unfairly. The Middle East lines have disputed that position, and earlier this year, agreed to make their financial statements public and to limit expansion in the U.S. market, in an attempt to tamp down the conflict.

Despite those moves, the airline factions are still at odds; American has also ended its code-sharing agreements with Qatar and Etihad, saying those partnerships “no longer make sense for us.”

Al Baker said that American’s actions are inconsistent with the cooperation that alliances are supposed to foster. “If we are constantly being targeted by our U.S. partner, then why should we bother with an alliance?” he asked.

A spokesman for Oneworld — whose members also include British Airways, Cathay Pacific and Qantas — said in a statement that the alliance views the fracas as a “difference of opinion” that it hopes “can be resolved quickly.”  American, for its part, said it hoped that the alliance would “remain intact.”

Still, the war of words isn’t putting the brakes on Qatar’s ambitions; the carrier recently made substantial investments in a number of carriers, including the IAG group, the parent of British Airways and Iberia; Cathay Pacific; Latam and Air Italy.  It has also invested in California-based JetSuite, which operates charter and scheduled private jet flights.

And, the airline is embarking on its own ambitious growth plan, taking delivery of a new aircraft every ten days, including the new Airbus A350-1000 and Boeing’s 777X — both of which provide more range and fuel efficiency than previous models in those product lines. The carrier currently operates 132 planes, which Al Baker claimed is “the world’s most modern fleet.”  

The airline is also boosting its stopover program to encourage U.S.-originating passengers to plan a layover in Doha; and recently rolled out an upscale business class product, Q Suite, which can be configured with double beds and four-person dining suites.