U.S. Secretary of State Mike Pompeo has told the Senate Foreign Relations Committee that his department is “looking very closely” at a decision by Qatar Airways to take a 49% stake in little known Italian airline Meridiana and rebrand it as Air Italy. Since buying into the Sardinian headquartered business, the airline has announced a massive expansion with four routes from Milan to the United States starting in the last 12-months.
The decision by Qatar Airways to rebrand Meridiana and bankroll its expansion came just months after the State of Qatar reached a landmark agreement with the United States over Open Skies policy. It followed a near four-year campaign from the likes of Delta, United and American Airlines who accused Qatar Airways of receiving over $25 billion in government subsidies in violation of the current Open Skies agreement.
As part of a deal between the United States and Qatar to put an end to the dispute, Qatar Airways agreed to become more transparent in its financial dealings and also said it had no current plans to open Fifth Freedom routes to the United States. A Fifth Freedom route is one where a foreign airline gains permission to fly to a second country where they can drop off and pick up passengers before then flying to a third country.
But critics believe Qatar’s investment in Air Italy is a further violation of the Open Skies agreement and claim Air Italy is little more than a Qatari government subsidised proxy for Qatar Airways.
Concern about the Air Italy deal and how it breaks the agreement between the Trump administration and the State of Qatar has won bi-partisan support from both Democrats and Republicans. During yesterday’s committee hearing, Secretary Pompeo faced repeated questions about what he was doing to ensure the deal was enforced.
“I have personally engaged in this issue and we are working to make sure every party to those agreements complies with every element of those agreements,” Secretary Pompeo told the committee.
“In fact, I will engage again tomorrow with several of the parties. The US government sees what’s going on, and we’re working to put this agreement- we think it was a good agreement and we’re trying to ensure it’s enforced.”
In December, a group of 11 Senators led by Ted Cruz wrote to U.S. Department of Transport Secretary Elaine Chao claiming that “hard-fought agreements are already being ignored.”
“There is bipartisan concern that Qatar Airways is violating last year’s agreement with the United States – making its finances more opaque instead of less and using Air Italy as a proxy to undermine the U.S. airline industry,” commented Scott Reed from the Partnership for Open & Fair Skies.
The Washington-based pressure group which is funded by the likes of Delta and American Airlines claims the future of the American aviation industry and thousands of U.S. aviation jobs “depend on the Trump administration holding Qatar accountable for its trade-cheating actions.”
Air Italy recently started flying between Milan to Los Angeles and San Francisco. The airline already flies to New York and Miami but has pushed back proposed operations to Chicago. The airline has also retreated from Dehli, Mumbai and Bangkok.
Both Qatar Airways and Air Italy are yet to comment on Secretary Pompeo’s comments.