BEFORE THE 

DEPARTMENTS OF TRANSPORTATION, STATE AND COMMERCE 

WASHINGTON, D.C. 

Information on Claims Raised About StateOwned Airlines in Qatar and the U AE 

) 

) 

) 

) 

Dockets: 

DOT-OST-2015-0082 

DOS-2015-0016 

DOC-2015-0001 

________________________________ ) 

COMMENTS OF ATLAS AIR WORLDWIDE HOLDINGS, INC. 

Communications with respect to this document should be served on: 

William J. Flynn 

President & Chief Executive Officer 

ATLAS AIR WORLWIDE 

HOLDINGS, INC. 

2000 Westchester A venue 

Purchase, NY 10577-2543 

(914) 701-8527- Telephone 

(914) 701-8081 -Fax 

adam.kokas@atlasair.com 

Adam R. Kokas 

Executive Vice President, General Counsel, 

Chief Human Resources Officer & Secretary 

ATLAS AIR WORLDWIDE 

HOLDINGS, INC. 

2000 Westchester A venue 

Purchase, NY 10577-2543 

(914) 701-8576- Telephone 

(914) 701-8333- Fax 

adam.kokas@atlasair .com 

May 29,2015 

Russell E. Pommer 

Associate General Counsel 

ATLAS AIR WORLDWIDE 

HOLDINGS, INC. 

801 1 th Street, NW, Suite 410 

Washington, D.C. 20006 

(202) 822-9121 -Telephone 

(202) 822-9152- Fax 

rpommer@atlasair .com 
BEFORE THE 

DEPARTMENTS OF TRANSPORTATION, STATE AND COMMERCE 

WASHINGTON, D.C. 

Information on Claims Raised About StateOwned Airlines in Qatar and the UAE 

) 

) 

) 

) 

________________________________ ) 

Dockets: 

DOT-OST-2015-0082 

DOS-2015-0016 

DOC-20 15-0001 

COMMENTS OF ATLAS AIR WORLDWIDE HOLDINGS, INC. 

By Notice published at 80 Fed. Reg. 25671 (May 5, 2015), the Departments of 

Transportation, State and Commerce have jointly requested views "on claims that three 

foreign airlines- Emirates Airline, Etihad Airways, and Qatar Airways- have received 

and are benefitting from subsidies from their homeland governments that are distorting 

the global aviation market." Related to those claims are recent calls for the unilateral 

U.S. imposition of a freeze on new services by Emirates, Etihad and Qatar and 

suggestions that certain "open skies" agreements ought to be cut back. 

Atlas Air Worldwide Holdings, Inc. ("AAWW") wishes to address those three 

points on behalf of its two U.S. air carrier subsidiaries, Atlas Air, Inc. ("Atlas") and Polar 

Air Cargo Worldwide, Inc. ("Polar"). 1 In brief, if after careful review the U.S. 

government finds that the subsidization claims have merit, it should pursue them through 

normal intergovernmental channels as it would any "doing business" issue in accordance 

with the applicable air services agreement. That the air services agreements in question 

follow the open skies model is irrelevant. Unilateral U.S. action would be ill-chosen and 

1 AA WW wholly owns Atlas and holds a 75% voting/49% total equity interest in Polar. 
received poorly by important strategic allies. Furthermore, arguments that the U.S. open 

skies policy (as opposed to alleged government subsidization) has placed U.S. passenger 

carriers at an unfair competitive disadvantage lack foundation and ought to be rejected. 

I. Notwithstanding Implied Attacks, the U.S. Open Skies Policy Greatly 

Benefits U.S. Carriers and Continues To Be Right for the Nation 

To put the extraneous arguments to rest at the outset, the U.S. open skies policy 

has been pursued vigorously for almost 25 years by Republican and Democratic 

Administrations alike. The policy was adopted, in part, to recognize the need for the U.S. 

government to pursue benefits for more constituencies than the U.S. airline industry. 

According to the US. International Air Transportation Policy Statement adopted by DOT 

in April1995, objectives include "[i]ncreas[ing] the variety ofprice and service options 

available to consumers" and "[e]nhanc[ing] the access ofU.S. cities to the international 

air transportation system" (emphasis added). 

With open skies agreements now in place with 115 countries, the policy has more 

than proven itself. As the State Department website states, "[ o ]pen skies agreements have 

vastly expanded international passenger and cargo flights to and from the United States, 

promoting increased travel and trade, enhancing productivity, and spurring high-quality 

job opportunities and economic growth. Public benefits include: 

• More passenger flight options and fare competition, benefitting passengers. 

• More air freight options and rate competition, benefitting shippers. 

• Enhanced facilitation of international trade. 

• Economic benefits to U.S. communities receiving increased air service due to 

increased local expenditures and employment. 

-2-
• Indirect economic benefits to those communities and the broader U.S. economy 

through the multiplier effect. 

Although recent critics sometimes have suggested otherwise, U.S. air carriers 

have benefitted greatly from the open skies agreements that have been negotiated. 

Energetic U.S. government pursuit of the policy has produced substantial additional 

traffic rights for passenger (as well as all-cargo) carriers over the years, in agreements 

with countries such as Canada, Colombia, Ecuador, Japan and the United Kingdom. U.S. 

all-cargo operators like Atlas and Polar benefit substantially from the 51

h and 71

h freedom 

traffic rights provided in open skies agreements. Because air freight moves on a one-way 

basis and cargo markets are both seasonal and directional, those rights are essential to the 

successful operation of global air cargo networks. In 2014, Atlas and Polar operated to 

123 countries; and local traffic in intermediate and beyond markets played an important 

part in supporting those flights. 

It is unclear where those criticizing Gulf carrier expansion stand with respect to 

the U.S. open skies policy. Initially, according to press reports, they were quite critical of 

it. Consistent with those reports, their January 28, 2015 study, Restoring Open Skies: the 

Need to Address Subsidized Competition from State-Owned Airlines in Qatar and the 

UAE, at 3, states as follows: "[t]he Open Skies agreements have conferred enormous 

benefits on Qatar and the UAE by opening the most lucrative market in the world to their 

airlines, ven though they provide essentially no benefits to the U.S. carriers in return" 

(emphasis added). 

More recently, those criticizing Gulf carrier expansion have tempered their 

rhetoric, asserting that they strongly support open skies and are targeting their disapproval 

-3-
solely on the expansion funding mechanism. That may be so. But in a recent letter to 

Secretaries Kerry, Foxx and Pritzker, the CEO's of American, Delta and United focused 

attention on the fact that the Gulf carriers continue to expand their U.S. services 

notwithstanding the alleged failure to stimulate additional traffic, which "will exacerbate 

the existing harm to U.S. airlines by diverting even more passengers away from U.S. 

airlines' services." 2 Although alleged subsidization is mentioned in the same sentence, 

the rhetoric sounds remarkably similar to arguments advanced by some in the 1990's in 

opposition to open skies agreements. That debate was concluded long ago with the 

determination that competition through open skies agreements advances the overall U.S. 

public interest even though certain carriers may experience traffic diversion and revenue 

losses. 

II. The U.S. Government Should Critically Evaluate the Government 

Subsidization Claims 

AA WW expresses no position on whether the Gulf carriers are being unfairly 

subsidized by their governments. The U.S. government should take seriously the 

subsidization claims, as it would any concerns raised by U.S. air carriers about foreign 

competitive constraints. If, after investigation, the U.S. government finds that the claims 

have merit, it should pursue them on an intergovernmental basis, just like it has pursued 

similar matters raised by U.S. carriers doing business in Italy, Venezuela, China and 

Japan. The applicable air services agreements prohibit denying air carriers of the other 

country a fair opportunity to compete, and they establish consultation procedures to 

2 Letter to Secretaries Kerry, Foxx and Pritzker from Doug Parker, Richard Anderson and Jeff Smisek, 

April17,2015at2. 

-4-
address problems that have been identified. If the U.S. government believes that foreign 

governmental subsidization is denying U.S. passenger carriers a fair opportunity to 

compete, it should address the matter through the consultation process. The U.S. 

government should not take unilateral action before it has let the intergovernmental 

process follow its course. 

We also caution the U.S. government not to rush to judgment on the basis of the 

information provided to date. The questions of what constitutes subsidization, and what 

degree of subsidization results in denial of a fair opportunity to compete, are complex 

ones. Many foreign air carriers have government ownership and receive governmental 

support; and many governments (including the U.S.) take actions to promote civil 

aviation in order to advance their national economic and security interests. What the U.S. 

government decides with respect to the Gulf carriers undoubtedly will have precedential 

consequences when similar claims are made in the future about other carriers and 

government-approved carrier arrangements. 

May 29,2015 

Jr:::t??~ Russell E. Pommer 

Associate General Counsel 

ATLAS AIR WORLDWIDE HOLDINGS, INC. 

801 17th Street, NW, Suite 410 

Washington, DC 20006 

-5-