Friday, November 18, 2016

Qatar Airways CEO Akbar Al-Baker's Cozy Relationship With Donald Trump Adds Interesting Twist to Gulf Carrier Dispute

Qatar Airways CEO Akbar Al-Baker seen with Donald and Melania Trump at an event celebrating Qatar Airways' new service from Doha to New York City in 2007
 The three major U.S. legacy carriersDelta, United, and American—have spent the past few years lobbying the White House to halt the growth of the Persian Gulf carriers (Emirates, Qatar Airways, and Etihad) in the U.S. by ending the open-skies agreements between the U.S. and various Gulf nations. The American legacy carriers allege that the Gulf carriers are receiving billions of dollars in government subsidies enabling them to expand at will in the U.S. without fear of losses, while stealing market share away from the legacies.  

While the lobbying efforts have so far produced zero action from the Obama Administration, the election of Donald Trump, who has spent the past year and a half campaigning for protectionist economic measures, provides an opportunity for the American legacy carriers to see actions taken by the White House against the expansion of the Gulf carriers 

Donald Trump, whose electoral success can be attributed to his populist message focused on providing more protections for American companies and workers, seems like the ideal leader to rip up the open-skies agreements. 

However, the dynamic is not so straightforward. The CEO of Qatar Airways, Akbar Al-Baker, is apparently friends with Donald Trump. 

According to Doha News, in December of 2015, when asked about Donald Trump's plan to ban all Muslims from entering the U.S., Al-Baker said “Look, Donald is my friend, and we have been friends for a long time. I think it is an exercise only to gain political mileage. Nothing more. This is the opportune time to excite more extremist people so that they could give him their votes.”  

In another interview in May of 2016, Al-Baker continued to defend Trump's statements by saying that he didn't think Trump meant what he said. Al-Baker also added that Trump "does not realize that he has a lot of investment in Muslim countries and at the same time there is a very huge Muslim population in the United States."  

"Like all politicians, he says everything but once he gets elected, he will change his mind," Baker added. 

Baker's defense of Trump's comments reflects his belief that Trump will not alienate corporations in the Middle East due to the number of investments Trump has in the region.   

While the airline industry is not currently on President-elect Trump's immediate radar, lobbying efforts from the U.S. airline industry for protectionist policies aimed at stalling the growth of Gulf carriers will place pressure on him to act. 

Would Trump abandon his apparent friendship with Qatar Airways CEO Akbar Al-Baker by ending the open-skies agreement with the Gulf nations therefore fulfilling his campaign promise of protecting American carriers and their employees from what he perceives as unfair foreign competition? Or will Trump act in the interest in of his friend Al-Baker, who defended and supported Trump during the heat of the backlash against the current President-elect's statements on Muslims, and spare Qatar Airways and the rest of the Gulf carriers 

The election of Trump has breathed new life into the Gulf carrier dispute in the U.S. However, any firm actions or decisions by the new Trump Administration are far from certain, especially when the President-elect's personal and business relationships in the dispute are taken into account.

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