To understand why leading U.S. airlines are mounting a political campaign against growing competition in their markets from Persian Gulf rivals, look at the experiences of flagship airlines in Canada, Germany and Australia.

Canada has so far contained the Gulf trio’s growth, to the benefit of Air Canada though its efforts have strained diplomatic ties. German carrier Deutsche Lufthansa AG, which has lost significant traffic to Gulf rivals, is asking the European Union for help in leveling the playing field. Australia’s Qantas Airways Ltd. chose to cooperate rather than fight, forging an alliance with Emirates Airline in 2013.

The U.S. government is considering a new request for help from American Airlines GroupInc.,United Continental Holdings Inc. and Delta Air Lines Inc. The U.S. carriers want Washington to limit expansion by Emirates, Etihad Airways and Qatar Airways, alleging the growth is unfairly fueled by subsidies from the Gulf airlines’ state owners.

Etihad, Emirates and Qatar insist that they are profitable companies that aren’t subsidized and that they offer Americans access to cities around the globe that U.S. airlines ignore. The chiefs of Emirates and Etihad are expected to address the dispute in separate speeches in Washington on Tuesday.

Supporters say the Gulf airlines are simply emulating a strategy pioneered decades ago by other carriers with small home markets, including Singapore Airlines and KLM Royal Dutch Airlines: Build a big home airport and scoop up international traffic between other countries’ airports via that hub.

ENLARGE

The Gulf three have accomplished this in record time, developing hubs that easily connect travelers between Asia Pacific and Europe or North America. They recently began adding U.S. flights—they now collectively serve 10 U.S. airports—and their available seats have more than doubled since 2009. By choice, Delta and United each operate just one daily round trip to Dubai.

Air Canada is “aligned on most if not all of the points” the U.S. carriers are making about the Gulf trio, said Benjamin Smith, the Canadian flagship’s president of passenger airlines. “It’s a very serious issue.”

Canada’s air treaties with Qatar and the U.A.E. are more restrictive than the U.S.’s “open skies” accords. They have enabled Canada to limit the Gulf carriers to three round-trip passenger flights a week each. Some in Ottawa believe that number already far exceeds actual demand for travel to the Middle East and includes Canadians traveling beyond the Gulf. Air Canada doesn’t fly to the region, but it intends to start thrice-weekly service from Toronto to Dubai in November.

The U.A.E. showed displeasure with the lack of expansion in 2010. Its then-ambassador to Ottawa said it was “frustrating” that five years of negotiations hadn’t increased flights. “The fact that this has not come about undoubtedly affects the bilateral relationship,” the envoy said.

Within days, Canada’s then-defense minister said his nation would abide by the U.A.E.’s wishes and withdraw from a military base near Dubai that Canada was using as a staging area for the war in Afghanistan. Canadian officials decline to say whether the air talks were linked to the base closure. Soon after, the U.A.E. began requiring Canadian travelers to apply for pricey visas when they visited, a rule later rescinded.

Source: http://www.wsj.com/articles/u-s-airlines-battling-gulf-carriers-can-cite-experience-of-others-1426543971