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Abstract

Subsidy allegations against the three major Middle-Eastern carriers—Emirates Airlines, Etihad Airways, and Qatar Airways—have been brought by the three major U.S. carriers—American Airlines, Delta Air Lines, and United Airlines. The latter claim that the Gulf trio receives letters of credit and subsidies from their governments. They claim also that their rivals take passengers and revenues from U.S. carriers and force them to reduce, terminate, or forego services on international routes. This article rationalizes the ongoing debate without arguing whether the subsidy allegations are founded or not. It seeks to understand the basic rationale behind any findings and conclusions drawn by the different stakeholders that are involved or concerned by the subject. It is important to shed light on the conflicts of interests that might harm air transport development as a whole, and hence the fundamental right of the people: freedom of movement and, more specifically, the needs of the people for “efficient and economical air transport” prescribed by Article 44 of the Convention on International Civil Aviation. The focus is on the North American region. The air transport policies and competitive issues are addressed from different national and international perspectives, specifically, the International Civil Aviation Organization (ICAO), the World Trade Organization (WTO), national civil aviation authorities, and for-profit organizations. The analysis is based mainly on scientific data and legal and regulatory aspects, which are discussed through a case study of the United States and Canada on the one hand and the United Arab Emirates (UAE) on the other.

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