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Gulf Airlines: If you can't beat 'em, join 'em


While U.S. airlines, and especially Delta, have complained about unfair competition from the big 3 Gulf-based airlines, some European airlines have taken a different tack, coming to agreements and even ownership shares with them.

The latest is a deal between Qatar Airways and British Airways to form a joint venture that will see the two airlines planning and scheduling together and sharing revenues on services between London and Doha, as well as code-sharing many of each other's flights to other European destinations. The deal goes into effect Oct. 30.

That's similar to the type of agreement that British Air and American Airlines share on trans-Atlantic routes, or the similar one involving Virgin Atlantic, Delta and KLM/AirFrance. Many other similar agreements exist, including several others involving Qatar. It's pretty much the closest two companies can get without issues of foreign ownership.

The big issue for U.S. and some European carriers has been whether Emirates, Qatar and Etihad, all of which are largely or completely government-owned, have unfair advantages, such as worrying less about profits, not paying costs others face, not having to go into capital markets to finance growth, etc. 

Joint agreements are not the only strategy the Gulf carriers have used in making closer ties with other carriers. Direct investment has also been growing, and in fact, Qatar just raised its ownership share in British Air's parent company (which also owns Iberia, Aer Lingus and Vueling) to 20%.

Etihad has a 49% stake in Alitalia and Air Serbia, 30% in Air Berlin, and sizable shares in several others. It has also provided funding for new planes to some of those. Qatar has a 49% stake in Italy's Meridiana and shares in several others.

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