IAG pulls out of trade body over Gulf carriers spat

International Airlines Group has walked away from the European airlines trade body because of a spat over the threat posed by the fast-expanding Gulf carriers.

The parent company of the UK flag carrier British Airways and the Spanish airline Iberia said on Thursday that it had pulled out because of a difference of opinion with other members of the Association of European Airlines.

Qatar Airways became the largest shareholder in IAG when it bought a near 10 per cent stake in January, and the UK-based airline group has taken a conciliatory line with the Gulf carriers led by Emirates Airline.

Other European airline groups - notably Germany's Lufthansa - have long complained they are not competing on a level playing field with the state-controlled Gulf carriers.

Emphasising that it was "pro-competition", IAG said: "We believe global liberalisation of our industry is fundamental to our future growth and we are not willing to compromise on this fundamental matter."

IAG played an important role in bringing Qatar into the oneworld airline alliance that is led by British Airways and American Airlines.

But last month American Airlines was one of three US airlines - the others being Delta Air Lines and United Airlines - that alleged that Emirates, Etihad Airways and Qatar Airways have benefited from $42bn in state subsidies over the past decade.

Sir Tim Clark, Emirates' president, said the Dubai-based carrier was considering legal action in response to the claims.

One person close to the Association of European Airlines said the differences between IAG and members who were concerned about the Gulf carriers had been brewing for the past few years.

"It's sour grapes," the person added. "Lufthansa and Air France are strategically in quite a difficult position and are trying to offset any reductions in business or any lack of opportunity to build up their business on the Gulf carriers as unfair competition."

Chris Tarry, an aviation consultant, said there had been suggestions of discord for some time between IAG and the Association of European Airlines. "IAG and Qatar are partners, the view is that perhaps Lufthansa and Air France have become more focused on complaining as they attempt to put their houses in order to be able to compete effectively.

"The reality is that the world has changed, the Gulf carriers are here and customers are clearly making their choices. Clearly with Qatar as a member of oneworld and an investor in IAG this probably brought matters to a head."

© The Financial Times Limited 2015. All rights reserved.
FT and Financial Times are trademarks of the Financial Times Ltd.
Not to be redistributed, copied or modified in any way.
Euro2day.gr is solely responsible for providing this translation and the Financial Times Limited does not accept any liability for the accuracy or quality of the translation