US, Qatar reach agreement on subsidy spat with airlines

The US and Qatar have reached a deal to resolve a years-old quarrel over alleged airline subsidies, seven individuals familiar with the deal said Monday, as Qatar's government works to defuse tensions with the Trump administration. The agreement will see state-owned Qatar Airways agree voluntarily to open up its accounting books, the individuals said. U.S. airlines say the company receives billions of dollars in government payments that leave them at a competitive disadvantage. Qatar will also make a loose commitment that the flag carrier won't launch flights to the United States from Europe or other non-Qatari cities, creating yet more competition for the US airlines. The individuals briefed on the agreement demanded anonymity because they weren't authorized to discuss it ahead of a formal announcement, expected Tuesday when Secretary of State Rex Tillerson and Defense Secretary Jim Mattis meet with the visiting Qatari foreign and defense ministers. Both sides of the dispute can claim the agreement as a victory — for very different reasons. The US airline industry can claim the increased transparency will create a powerful disincentive to unfair subsidies, as Qatar will no longer be able to mask such payments through creative accounting. "Everybody gets to claim victory in this," said Helane Becker, an airline analyst for Cowen and Co. Indeed, even before any announcement, American praised the deal as a way to "thoughtfully address" Qatari subsidies. CEO Doug Parker called it a "landmark action" that would "help create a level and fair playing field for American Airlines and other US carriers."<br/>