Global Airlines.

There are many airlines that are subsidized by their government in one way or another, but the airlines of the Gulf states are more so than the others by a wide margin. Airlines like Qatar Airlines, Emirates and Etihad Airlines are very heavily subsidized by their home countries. This is a direct violation of the Open Skies agreement between the United States and these countries.(Laing, 2015)

The idea behind the Open Sky agreement, that has now been signed by over 100 countries, was that the airlines of each country that signed the agreement would enjoy free and open access to each other's airspace without having to be at the mercy of governments demands on routes, or fares. Another key component of this agreement was that the airlines that were benefiting from the Open Skies agreement would not be heavily subsidised by their respective governments, the idea being that the airlines would have to make it in the market on their own. (State Department, 2011)

All of the legacy airlines started as completely government subsidised, as they were flying the mail, but with the loss of the mail contracts and the deregulation of the 1970s, many of the domestic carriers became almost completely dependant on the free market to survive. There are some exeptions that are written into our laws, and while not as heavily subsidised as the Gulf States, the domestic carriers do depend on programs like the Essential Air service that the government pays the airlines to provide service to smaller more remote airlines. Another program is the Fly America Act that tells government employees that they have to fly on US owned airlines for official business. There is also a lot of rules and laws that help protect the airlines if they get in trouble, things like bankruptcy protection and the government pays millions every year to repair and improve airports for the airlines. 

Another unfair advantage that the foreign carriers have is that they are able to use the United States' own government to their advantage over US carriers, in that they can purchase the aircraft at a lower interest rate because of the Government run Export-Import Bank. This Export-Import bank guarantees loans to foreign companies that are buying American made products that would not be able to get private funding to purchase. While this is a great thing for US based Boeing, it is not a great thing for US based airlines that are having to but the same aircraft at higher interest rates. (Weisman, Lipton, 2015)

I believe that the airlines that are very heavily subsidized by their countries create a very unfair playing field in putting out a service that doesn't have to make enough to pay the basic bills and can just focus on the extras, that is why the Emirates and Qatar airlines are so much more luxurious. This will end in them getting more market share that they would have been able to do if they weren't so heavily subsidised.

Laing, K. (2015, March 12). airlines: foreign subsidies are destroying flight competition. Retrieved from http://thehill.com/policy/transportation/235543-airlines-foreign-subsidies-destroying-flight-competition

State Department. (2011, March 29). open skies partnerships: expanding the benefits of freer commercial aviation. Retrieved from http://www.state.gov/r/pa/pl/159347.htm

Weisman, J., & Lipton, E. (2015, April 6). Boeing and Delta spend millions in fight Over export-import bank existence - The New York Times. Retrieved from http://www.nytimes.com/2015/04/07/business/boeing-delta-air-lines-export-import-bank.html?_r=0