Subsidy battle takes odd turn

The battle over government subsidies to airlines has taken an odd turn. US and European carriers have accused Gulf carriers of getting unfair airline subsidies from their governments, as well as paying less in landing and parking fees at their home airports. Now a new report has come out that gives this battle a strange twist.

The government of Qatar has recently signed a deal with France for 24 French built Rafale fighters, with an option for 12 more. Apparently as part of that deal, the government of France has given Qatar Airways the rights to expand flights to France. The currently operate both A340 and A380 aircraft to Paris on three daily flights. Now they have secured rights to fly three times a week into Nice-Cote d'Azur, and Lyon-Saint Exupery.

The French President denies that the rights were part of any deal, but hasn't denied that Qatar has received them.

The debate about the Gulf airlines’ European expansion is taking a new turn, following a report that Qatar Airways secured additional traffic rights into France as part of a €6.3 billion ($7.03 billion) deal between Paris and Doha for the sale of 24 French-built Rafale fighter jets and an option for 12 more.

The Qatari national airline already operates three daily services to Paris Charles de Gaulle (CDG) with Airbus A340 and A380 aircraft, and now appears to have secured traffic rights to fly three times a week each to Nice-Côte d’Azur and Lyon-Saint Exupéry, respectively, which are France’s third- and fourth-largest airports in terms of passenger throughput after CDG and Paris-Orly. Last month, the French senate approved the privatization of Nice and Lyon airports (Aviation Daily, April 23).

French President François Hollande did not outright deny the Qatar Airways’ new traffic right, but stressed the arrangement with the airline was separate from the Rafale deal. Hollande and Qatari Emir Sheikh Tamim bin Hamad al-Thani signed the Rafale contract on May 4 in Doha.

aviationweek.com...

Awesome, then he should have no trouble showing the deal that did give them the rights, and that it was a good deal for France.

International deals are full of offsets like this. The deal is probably a good one for the French actually, but probably not great for the bottom line of AirFrance.