Delta eyes return to Persian Gulf region after US strikes deal with Qatar

Ed Bastian, CEO of Delta

Nicky Loh | Bloomberg | Getty Images
Ed Bastian, CEO of Delta

Almost two years after ending flights between Atlanta and Dubai, the CEO of Delta Air Lines says it may be time to return to the Persian Gulf countries.

Ed Bastian told CNBC it’s too soon to predict when resuming flights to parts of the region might happen, but he says it’s a possibility now that the U.S. has negotiated an agreement with the government Qatar that should limit subsidies for Qatar Airways.

“We need to have a presence in the Middle East. We need to have a presence in India and other parts of Southeast Asia, which we have been run out,” Bastian told CNBC. “By shining a light on the scope of the subsidies and providing transparency, it is going to allow us all to make long-term investment decisions to go into markets knowing that our government is standing behind us.”

Delta, along with American Airlines and United Airlines, have complained for years about the expansion of Qatar Airways, Abu Dhabi-based Etihad Airways and Dubai-based Emirates. The U.S. carriers have said the Persian Gulf airlines are able to undercut competitors and offer flights to the Middle East and elsewhere thanks to an estimated $52 billion in government subsidies. It’s an allegation the Gulf airlines vehemently deny.

So what’s changed?

In February of last year, the U.S. airline CEOs met with President Donald Trump at the White House and asked him to push Middle Eastern carriers to comply with Open Skies agreements designed to ensure all airlines compete on a level playing field. Since that meeting, the State Department, which negotiates Open Skies agreements, has been talking with Qatar government leaders.

“The President has made this matter a priority,” said Rex Tillerson, U.S. Secretary of State. “The outcome we achieved will ensure a level playing field in the global aviation market.”

Next up for Tillerson are talks with Etihad Airways and Emirates. If the State Department can reach a similar agreement, Delta may be ready to once again fly to the region. (Delta already offers service to Israel.)

“While we appreciate the work done with the Qataris, there is another big area that needs focus, which is the UAE and specifically Emirates and Etihad,” said Bastian. “I know those negotiations are starting and we hope the consultations reach a similar conclusion.”

This entry was posted in Airlines. Bookmark the permalink.

Leave a Reply