BOB GOOOLATIE, Virginia 

CHAIRMAN 

F. JAMES SENSENBRENNER, JR, Wisconsin 

LAMAR S. SMITH, Texas 

STEVE CHABOT, Oh;o 

DARRELLE ISSA. California 

J RANDY FORBES, Virginia 

ONE HUNDRED FOURTEENTH CONGRESS 

JOHN CONYERS, JR, Michigan 

RANKING MEMBER 

JERROLD NADLER, New York 

ZOE LOFGREN, California 

SHEILA JACKSON LEE, Texas 

STEVE COHEN, Tennessee 

STEVE KING, Iowa 

TRENT FRANKS, Arizona 

LOUIE GOHMERT, Texas 

JIM JORDAN, Oh;o 

TEO POE. Texas 

JASON CHAFFETZ, Utah 

TOM MARINO, Pennsylvania 

TREY GOWDY, South Carolina 

RAUL R. LABRADOR, Idaho 

BLAKE FARENTHOLD, Texas 

DOUG COLLINS, Georgia 

Q:ongrcss of the tinitcd ~tetcs 

iR.ousc of 1\.cprcscntatiocs 

HENRY C HHANKH JOHNSON, JR , Georgia 

PEDRO A PIERLUISI, Puerto Rico 

JUDY CHU, California 

TED DEUTCH, Florida 

LUIS V GUTIERREZ, Illinois 

KAREN BASS, California 

CEDRIC l RICHMOND, Louisiana 

SUZAN K DELBENE, Washington 

HAKEEM S JEFFRIES, New York 

DAVID CICILLINE, Rhode Island 

SCOTT PETERS, California 

RON DeSANTIS, Florida 

MIMI WALTERS, California 

KEN BUCK, Colorado 

JOHN RATCLIFFE, Texas 

DAVE TAOTI, Michigan 

MIKE BISHOP, Michigan 

The Honorable John Kerry 

Secretary of State 

U.S. Department of State 

2201 C Street, NW 

Washington, D.C. 20520 

COMMITTEE ON THE JUDICIARY 

2138 RAYBURN HOUSE OFFICE BUILDING 

WASHINGTON, DC 20515-6216 

(202) 225-3951 

http://www.house.gov/judiciary 

May 13,2015 

The Honorable Anthony Foxx 

Secretary of Transportation 

U.S. Department of Transportation 

1200 New Jersey Avenue SE 

Washington, D.C. 20590 

Dear Secretary Kerry and Secretary Foxx: 

The House Judiciary Committee recently received allegations that the state-sponsored 

airlines of Qatar Airways, Etihad Airways, and Emirates Airlines (collectively, the "Foreign 

Airlines") are receiving subsidies from Qatar and the United Arab Emirates ("UAE"). If these 

allegations prove true, the state subsidies to Foreign Airlines likely are improper in light of 

existing "Open Skies Agreements" with Qatar and UAE. Furthermore, the alleged foreign 

subsidies may be distorting market-based competition and placing domestic, privately-owned 

airlines at a competitive disadvantage. 

When negotiating and implementing Open Skies Agreements, the State Department and 

the Department of Transportation are required by law to "emphasiz[ e] the greatest degree of 

competition," "strengthen[] the competitive position of air carriers to ensure at least equality with 

foreign air carriers," and "eliminate[ e] discrimination and unfair competitive practices faced by 

United States airlines in foreign air transportation." 1 These statutory requirements are further 

implemented in the Department of Transportation's policy statement, which states in relevant 

part that the objectives of our national aviation strategy include "[e]nsur[ing] that competition is 

fair and the playing field is level by eliminating marketplace distortions, such as government 

subsidies .. .. "

2 As you know, Qatar and the UAE are counterparties to Open Skies Agreements 

with the United States.3 

To the extent that the Foreign Airlines are in receipt of inappropriate subsidies, these 

airlines likely are expanding at a rate that is inconsistent with market demand. Accordingly, the 

1 49 U.S.C. § 40101(e). 2 60 Fed. Reg. at 21844 (emphasis added). 3 The U.S.-Qatar Open Skies Agreement was signed on October 3, 2001. The U.S.-UAE Open Skies Agreement 

was signed on March 11, 2002. 

s 1 0-150514-007 
expansion likely is at the expense of privately-owned airline carriers, which must rely on 

revenues derived from profits rather than sovereign funds to continue their operations. These 

market distortions may have a particularly problematic impact on airline routes to rural areas. 

Rural routes are economically viable, in part, due to a portion of the passengers on these routes 

ultimately traveling to international destinations.4 Accordingly, a non-market based diversion of 

international travel routes from privately-owned domestic carriers to the foreign-subsidized 

Foreign Airlines may endanger the viability of domestic, rural routes. 

Furthermore, foreign subsidies may distort the market in a fashion that could produce 

significant long-term harms to consumers. Although foreign subsidies may cause consumer 

prices to be discounted in the short-term, these artificially low prices may cause rivals to exit the 

relevant markets, thereby increasing the market's reliance on foreign carriers and their subsidies. 

This, in turn, creates a more volatile market. Should the foreign subsidies ever abate or 

disappear, prices may dramatically correct themselves and may be unchecked by rivals, who 

could have already exited the market. Accordingly, in the long-term, this could leave consumers 

with higher prices and fewer choices. 

The Committee on the Judiciary historically has exercised vigilant oversight of issues 

related to competition, foreign and domestic. In that regard, the Committee takes very seriously 

allegations of market distortion that may negatively impact American consumers. 

In order for the Committee to better evaluate the allegations and the Administration's 

response to potential market distortions, please answer the following questions by May 20, 2015. 

1. Are you aware of any foreign subsidies to the Foreign Airlines? 

a. If not, have you determined the absence of any foreign subsidies, and how did 

you determine that? 

b. If so, what will be the response to these subsidies, consistent with the 

departments' relevant statutory authority and stated policies? 

Thank you for your attention to this potentially serious issue facing competition in the 

aviation marketplace. We look forward to your response. 

Bob Goodlatte 

Chairman 

House Committee on the Judiciary 

- Sincerely, 

John Conyers, Jr. 

Ranking Member 

' 

House Committee on the Judiciary 

4 See RESTORING OPEN SKIES: THE NEED TO ADDRESS SUBSIDIZED COMPETITION FROM STATE-OWNED AIRLINES IN 

QATAR AND THE UAE (Jan. 28, 20 15), available at http://skift.com/wp-content/uploads/20 15/03/White.Paper-2.pdf. 

2 

s 10-150514-007 
Jo-vnz:t~ Tom Marino 

Chairman 

Subcommittee on Regulatory Reform, 

Commercial and Antitrust Law 

House Committee on the Judiciary 

;?~~v Blake Farenthold 

Vice-Chairman 

Subcommittee on Regulatory Reform, 

Commercial and Antitrust Law 

House Committee on the Judiciary 

James ensenbrenner, Jr. 

hairman 

H nry . ' Ian 

Ranking Member 

Subcommittee on Regulatory Reform, 

Commercial and Antitrust Law 

House Committee on the Judiciary 

Jerr d Nadler 

R king Member 

Subcommittee on Courts, Intellectual Property, 

and the Internet 

House Committee on the Judiciary 

~~ 

-;. Pierluisi 

Member 

ubcommittee on Crime, Terron 

Security, and Investigations 

House Committee on the Judiciary 

, Homeland House Committee on the Judiciary 

Subcommittee on the Constitution and Civil 

Justice 

House Committee on the Judiciary 

~ CJJUvv 

Vice-Chairman 

Dou~ Subcommittee on Courts, Intellectual Property, 

and the Internet 

House Committee on the Judiciary 

s 10-150514-007 

3 

Member 

~ ~ House Committee on the Judiciary 

tds Gutienez 

M mber 

House Committee on the Judiciary 
Lamar 

~~U Smith 

Member 

House Committee on the Judiciary 

Steve Chabot 

Member 

House Committee on the Judiciary 

Member 

House Committee on the Judiciary 

John 

~~~ Ratcliffe 

Member 

House Committee on the Judiciary 

~~ veTrottf Member 

House Committee on the Judiciary 

Mike Bishop 

Member 

House Committee on the Judiciary 

s 10-150514-007 

4 

David N. Cicilline 

Member 

House Committee on the Judiciary