The mailroom at Congress could be about to get very busy – Delta Air Lines is imploring its entire workforce of 80,000 employees plus their extended family and friends to write to their representative. The airline is hoping its staff will support it in its protest at Gulf airlines operating in the U.S. In a newly released, internal video Delta says Gulf carriers are “taking our jobs” and that the airline and its employees cannot “stand for that.”
The video comes as Qatar Airways has announced plans to buy a stake in American Airlines. Various reports put the Qatari’s investment at something between a 4.5% – 10% in American – the deal would be worth at least USD $808 million. Qatar Airways has said it see’s a “strong investment opportunity” in AA and “believes in American Airlines’ fundamentals.”
Explaining the reasoning behind the investment, Qatar Airways said in a statement that it saw American as a “good Oneworld Alliance partner”. American was one of the founding members of the Oneworld alliance in 1999. Qatar Airways became the first and only Gulf airline to join an airline in 2013 when it joined Oneworld – it has since taken stakes in two other Oneworld airlines. The Doha-based airline now controls 20% of IAG – the parent company of British Airways, as well as holding shares in Latin American carrier, LATAM.
Yet Doug Parker, American’s chief executive isn’t exactly enthused with the deal. In a leaked memo to staff, Parker said he wasn’t “particularly excited about Qatar’s outreach.” He explained that American had no control who bought shares in the airline but that he “finds it puzzling given our extremely public stance on the illegal subsidies that Qatar, Emirates and Etihad have all received over the years from their governments.”
Parker went on to say that Qatar’s move would strengthen his resolve to fight what he see’s as the unfair business practices of Gulf carriers including Qatar Airways, Emirates and Etihad Airways. The letter said: “We will not be discouraged or dissuaded from our full-court press in Washington, D.C., to stand up to companies that are illegally subsidised by their governments. We stand for American Airlines, and we stand for all of you and the amazing work you do every day, around the globe, to take care of our customers.”
The full letter can be found at the bottom of this post.
The Association of Professional Flight Attendants (APFA) – The staff association for AA flight attendants – told their members they opposed the expansion of Middle East airlines in the U.S. In an update to their members on Friday afternoon, APFA said the success of Gulf carriers was “based on the enormous and illegal subsidies these airlines receive from their respective governments which creates unfair competition and threatens American jobs.”
APFA supports the Partnership for Open and Fair Skies – a lobby group set up and funded by American Airlines, Delta and United Airlines to fight the Middle East Three. The group has been calling on Congress and the White House to take action against Gulf carriers. They claim the business practices of their Middle Eastern rivals breach the terms of the Open Skies agreements that allow them to fly to the U.S.
Now, Delta is hoping to pile the pressure on Congress with their new lobbying tactic. The internal staff video urges every employee at the airline to spend “just five minutes” and send an email or letter to their member of Congress. Staff are encouraged to “join the fight” and use the hashtag: #OurFutureOurFight. The campaign was kicked off at an employee gathering on Wednesday.
For its part, APFA has said its believe’s AA’s board will prevent Qatar Airways from buying anymore than 4.75% in Amerian. The union has vowed to continue to voice their opposition to the business practices of Qatar Airways and the other Gulf carriers.
Doug Parker’s full letter to American Airlines staff read:
As you likely know by now, American recently received notice as part of the Hart-Scott-Rodino Act (a federal process governing large purchases of stock of publicly traded companies) that Qatar Airways has indicated its desire to make an investment in American Airlines.
American Airlines is a publicly traded company, which means our stock is available for anyone to purchase on the Nasdaq Stock Market. We don’t own those shares – they belong to the shareholders who own this company – and we cannot control who sells or purchases them. But this is an important development for American and one I wanted you to hear about from me directly.
While anyone can purchase our shares in the open market, we aren’t particularly excited about Qatar’s outreach, and we find it puzzling given our extremely public stance on the illegal subsidies that Qatar, Emirates and Etihad have all received over the years from their governments. We remain committed to that effort, and we will remain so even with this potential investment.
While today’s news for some of our team may be puzzling, at best, and concerning, at worst, here’s what we know for sure: We will not be discouraged or dissuaded from our full court press in Washington, D.C., to stand up to companies that are illegally subsidized by their governments. We stand for American Airlines, and we stand for all of you and the amazing work you do every day, around the globe, to take care of our customers.
If anything, this development strengthens our resolve to ensure the U.S. government enforces its trade agreements regarding fair competition with Gulf carriers, because we must make it crystal clear that no minority investment in American will ever dissuade us from doing what is right for our team members, our customers and all of our shareholders. And do not worry, per U.S. law, no foreign entity can own more than 25% of a U.S. airline, so there is no possibility that Qatar will be able to purchase enough of American to control or influence our Board, management or our strategy.
Of course, it may just be that Qatar Airways views American Airlines as a solid financial investment, because of the great work you all are doing every day. In that case, we would agree with them. Your results are earning the confidence of our customers and our shareholders every day, and it’s a privilege to work with and for all of you. Thank you for making American all it is and will be in the future.
Every order that Emirates places with Boeing contributes billions to US economy, so no Doug Parker, pull your act together and start offering a better experience for your passengers (and maybe stop getting subsidised too, like bankruptcy protection). Then maybe there won’t be shocking headlines about your airline AND its competitors every week!