American Airlines announced on Wednesday that it will be ending codeshare agreements with Qatar Airways and Etihad Airways.
At first glance, one may think this move by American is unusual, especially since Qatar Airways is one of American’s partners in the Oneworld alliance.
However, this announcement is not entirely surprising since American Airlines has a history of disputes with the “Middle East 3” (ME3) of Emirates, Etihad Airways, and Qatar Airways over alleged government subsidies.
Along with Delta and United, American has accused the ME3 of receiving unfair financial backing from their governments. Conversely, many in the travel industry (including JetBlue and Hawaiian Airlines) have spoken out against the Big 3 U.S. carriers’ efforts to prevent the ME3 from flying to the U.S.
Emirates, Etihad, and Qatar have all denied receiving unfair subsidies.
In response to this decision by American, Etihad Airways has said that they are disappointed and accused American Airlines of being anti-consumer.
The move by American Airlines comes just 1 week after American revealed that Qatar Airways is looking to purchase up to 10% of American Airlines’ stock, something that CEO Doug Parker has said American is “not particularly excited about.”
Although disappointed by American’s decision, Qatar Airways CEO Akbar Al Baker has said that the cancellation of codeshares will not change their plan to buy a significant stake in American Airlines.
Further, Al Baker stated that the end of codesharing is “not in the spirit of the Oneworld alliance,” and that there are other airlines in the U.S. that would be willing to work with Qatar Airways.
Forbes was first to report this decision, which American said they notified Qatar and Etihad of on June 29.
Here is the full statement from American:
In light of our ongoing dispute over the Open Skies agreements, American Airlines notified Etihad Airways and Qatar Airways on June 29 of our decision to terminate our codeshare relationships. Given the extremely strong public stance that American has taken on the ME3 issue, we have reached the conclusion that the codesharing relationships between American and these carriers no longer make sense for us. This decision has no material financial impact on American and is an extension of our stance against the illegal subsidies that these carriers receive from their governments. We are committed to doing everything we can to continue to support our team members and ensure that there is fair competition between American and the Gulf carriers.
Codeshare agreements, which allow an individual airline to book passengers on another airline’s flights, extend an airline’s reach to parts of the world they do not serve.
Although American Airlines has said that the end of these agreements will not have a “material financial impact” on the airline itself, it will have an impact on passengers flying to destinations served by Qatar and Etihad, though not destinations served by any of American’s other partners.
At this time, no announcements have been made regarding changes to the earning or redeeming of frequent flyer miles between the 3 airlines. That being said, we wouldn’t be surprised by changes to this in the future. Etihad’s relationship with American seems to be the most at risk as they are not part of the Oneworld alliance.
The end of codesharing will go into effect on March 25, 2018. Beginning today, American reservations agents are already working to rebook passengers who have ticketed itineraries that take place after that date.