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Row between U.S. and Persian Gulf carriers set to intensify

The years long spat between United States and Persian Gulf carriers – Emirates, Qatar Airways and Etihad Airways PJSC – is about to reach fever pitch.

This after Etihad said that a measure that make part of the Senate’s tax-reform bill contains “language that is inappropriate under U.S. law and runs contrary to several international agreements.”

The remarks are about an addition to the bill that calls for foreign airlines from nations lacking income-tax treaties with the U.S. to pay corporate duties where American carriers operate fewer than two services a week to those countries, the Financial Times reported.

The move looms to spark anew a row over the quick expansion of Gulf carriers, which U.S. rivals including Delta Air Lines Inc., American Airlines Group Inc. say is made possible through illegal state aid. While operators from countries such as Suriname and Fiji would also suffer the bill’s effects, the wording of the measure means it wouldn’t affect European companies.

Etihad said it’s collaborating with “a broad coalition of industry representatives” to get lawmakers to act on the issue, adding that it “appears to be the result of continued anticompetitive efforts by one or more of the ‘big three’ U.S. legacy carriers.”

Dubai-based Emirates, the Middle East’s top airline and the world’s biggest long-haul carrier, has indicated that it is aware of the proposal, and did not offer up any more information.

The measure was presented by Johnny Isakson, a Republican senator for Georgia, the home state of Atlanta-based Delta.

An initial push for action against Gulf growth from U.S. carriers included a huge campaign for the suspension of the country’s bilateral air services arrangements with Qatar and the United Arab Emirates. The administration of former U.S. President Barack Obama did not move the bid forward.

Etihad reported losses amounting to $1.87 billion last year as it wrapped its head around a disastrous investment approach, a slump in oil-related travel and pressures from the U.S., which acted to limit travel to America by people from a number of Muslim-majority nations and later slapped on restrictions on using electronic devices in U.S.-bound planes departing Mideast hubs.

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