American, Qatar Signal Detente With New Codeshare Agreement

American Airlines (AA) and Qatar Airways have reached a rapprochement following their long-standing dispute over alleged government subsidies to the Gulf carrier.

In a joint statement Feb. 25, the two carriers announced they are to re-establish their codeshare agreement, which lapsed some two years ago after American gave notice it was ending the arrangement.

The previous dispute between the two airlines threatened to spill over into the oneworld alliance, of which both are members, with Qatar Airways’ Group CEO Akbar Al Baker threatening to pull out of the grouping because of hostility from American, among others.

Both sides seem now to have agreed to bury the hatchet. Beyond the renewed codeshare, the airlines promised deeper cooperation in the future.

“This is the first step in building a strategic partnership between the airlines that will increase commercial cooperation, bolster connectivity and create new travel options for customers,” American’s version of the statement said. “Following restoration of the codeshare, American will begin exploring the addition of service from the U.S. to Doha.”

American has not previously flown direct to Qatar, but Al Baker has stressed many times that Qatar’s Open Skies policy means that he is relaxed about any airline arriving on his home turf.

“The issues that led to the suspension of our partnership two years ago have been addressed,” American’s chairman and CEO Doug Parker said in a statement, without giving further details. 

“We have moved on from past issues and look forward to working closely with American Airlines to build a world-leading partnership for all our customers,” Al Baker said.

Qatar’s version of the statement said that both sides would explore “a number of joint commercial and operational initiatives,” without offering further details.

Under the renewed codeshare, American Airlines passengers will be able to book travel on all Qatar flights between the U.S. and Qatar and onward to destinations in the Middle East, East Africa, South Asia, the Indian Ocean and South East Asia.

The agreement will allow Qatar Airways’ passengers to travel on AA domestic flights departing Boston, Dallas, Chicago, Los Angeles, Miami, New York (JFK) and Philadelphia, as well as on AA international flights to and from Europe, the Caribbean, Central and South America.

All are subject to regulatory approval.

The talks between the two airlines are understood to have begun at some point in 2019 and few details are currently available as to who approached whom. However, a Qatar Airways source told Aviation Daily that “the language is significant” in the announcement. “We call it a strategic partnership. We didn’t just call it a partnership. It’s much more than a codeshare.”

In an internal memo to employees reviewed by Aviation Daily Parker said, “We can’t announce today’s news ... without acknowledging there have been differences between our airlines. However, during the past several months the dialogue has been good, and we have agreed to move forward and begin a new chapter.”

Noting that January marked the two-year anniversary of the understandings reached between the U.S. and Qatari governments to preserve their Open Skies agreements, Parker added, “While work remains, the issues that existed between American Airlines and Qatar Airways have now been addressed.”

The agreement is the latest in a flurry of moves by American to leapfrog rivals by building out its international capabilities and forging new airline alliances. 

On Feb. 14, American announced it had reached a deal to form a West Coast international alliance with Alaska Airlines that will enable it to establish an international gateway in the latter’s hometown of Seattle. And on Feb. 4, American and Brazil’s GOL announced a codeshare agreement between the U.S. and South American carriers that was understood by industry-watchers to be a reaction to Delta Air Lines’ acquisition of a 20% stake in Chile’s LATAM Airlines Group.

The timing of the American-Qatar agreement is also notable because it comes on the heels of Air Italy’s decision to immediately suspend operations after its owners moved to liquidate the loss-making company. The carrier, which was 49% owned by Qatar Airways, had been a major source of conflict between U.S. airlines and Qatar, with the former accusing the latter of using the Italian airline as a vehicle to subsidize long-haul fifth-freedom flights from Europe to the U.S. 

Qatar, for its part, always insisted that fifth-freedom flights were permissible under the understandings reached in 2018 and accused U.S. carriers of engaging in unfair protectionism.

“American’s agreement with Qatar resembles its recently announced entry to Seattle-Bangalore, in that both leapfrog over the industry status quo,” said Craig Jenks, head of the New York-based Airline/Aircraft Projects Inc. consultancy. “Its SEA-BLR entry leapfrogs over Delta’s recognized long-haul hub leadership in Seattle, while the new agreement with Qatar leapfrogs over the U.S. ‘Big 3’ campaign against the Gulf carriers. In both cases, American has taken a surprising leap forward.”