Is Delta Admitting Defeat to the Gulf Carriers?


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There’s been so much competition lately between the US carriers the three Gulf carriers which are Emirates, Etihad and Qatar Airways on routes between the United States and the Middle East.

Presently, the gulf carriers operate 25 daily non-stop flights between the US and the Middle East, making it hard for US carriers to compete. This latest announcement about Delta proves that they are having issues filling up their flights to Dubai, as they are reducing their service to the Middle East.

Delta 777

Per ReutersDelta Air Lines Inc has scrapped a number of its flights to Dubai this winter in an apparent nod to how competition with three Gulf carriers is hurting its business.

Delta, the second-largest U.S. passenger carrier, will fly nonstop to Dubai from its Atlanta hub between four and five times per week starting Oct. 1, down from daily service this summer. The airline revised its schedule on Friday to reflect the change, part of a broader 15-to-20 percent cut in capacity to the Middle East and Africa that Delta announced in April.

“The reduction comes amid overcapacity on U.S. routes to the Middle East operated by government-owned and subsidized airlines,” Delta spokesman Trebor Banstetter said in a statement, noting that daily service would return in the spring of 2016.

Delta said months ago that its international capacity cuts were in response to falling crude prices hitting demand in oil-rich markets and to the strong U.S. dollar that has hurt the spending power of foreign travelers.

Yet the latest news underscores a trade row that is rippling through Washington.

Large U.S. unions and airlines, led by Delta, charge that Emirates, Etihad Airways and Qatar Airways have received some $42 billion in subsidies from their home governments in the past decade. They say this has allowed the Gulf carriers to start dumping capacity into the United States, driving down prices and pushing out competitors.

The Gulf carriers have denied that they are subsidized and say poor customer service has caused U.S. airlines to lose market share.

Other U.S. carriers such as JetBlue Airways Corp and the air cargo unit of FedEx Corp have backed the Gulf airlines, saying that government action would signal an abandonment of the United States’ liberal trade policy in favor of protectionism.

The Obama administration is currently reviewing the issue.

Delta is the only airline that flies between Atlanta and Dubai. Its service reduction will leave the Washington-Dubai flights on rival United Continental Holdings Inc as the only remaining daily nonstop on a U.S. carrier this winter.

Emirates operates a freighter service to Atlanta and currently flies passengers to nine U.S. cities from Dubai, with plans to add more. Qatar Airways will launch Atlanta-Doha flights in July 2016.

Bottom Line

The three Gulf carriers are continuing to add service between the US and the Middle East, forcing US carriers to cut-back since they’re having trouble competing.

What are your thoughts on the competition between the US carriers and the three Gulf carriers? Feel free to share below.

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Comments

  1. I challenge your contextualizing this story by saying the Gulf airlines are flying people to the Middle East/Gulf Emirates. Yes, they are, but as we know, over 90% of these passengers are continuing on to other destinations in Africa or Asia. DL and UA, the other two American carriers who fly into that region, are carrying almost 100% passengers who are destined to these Gulf Emirates. There’s a vast difference in the nature of the customers using these airlines, and the way you set up your piece fails to acknowledge this. (Nor is there nary a word about the other impact of the Gulf airlines on the three US majors who fly international routes, which is the syphoning of potential customers from their Atlantic and Pacific flights after which they connect onto alliance partners to Africa, Asia and Australia/New Zealand.)

    The only way DL and UA have been able to maintain their service to this part of the world is by flying US government and corporate customers (who must “fly American” where this option exists).

  2. I have flown all carriers to DXB. I can say, without doubt, I will never fly Delta to DXB again. Horrible service and horrible product.

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