In the worst clash so far among European airlines over how to deal with the Persian Gulf carriers, Iberia and British Airways (BA) left industry-lobby group Association of European Airlines (AEA) at the end of March.

International Airlines Group (IAG), the parent of BA and Iberia, told Aviation Daily that “our position on some important policy issues is not aligned with many other AEA airlines.” IAG in particular believes “that global liberalization of our industry is fundamental to our future growth and we are not willing to compromise on it.”

The conflict centers on demands put forth by Air France-KLM and Lufthansa Group to limit access to Europe for Gulf carriers, and to investigate and limit what they perceive as state subsidies to Qatar Airways, Etihad Airways and Emirates Airline. IAG has taken a completely different approach. IAG CEO Willie Walsh has said numerous times that he has “no issues” with the growth of the Gulf airlines and that he admires them.

However, IAG’s own interests are at work. After years of moving into a closer relationship, Qatar Airways has become IAG’s largest shareholder, with a stake of almost 10% as of this year, and has indicated that it would like to own a larger stake (Aviation Daily, Jan. 30).  

European initiatives to counter Gulf airlines come at the same time as a U.S.-based lobbying campaign against the big three Gulf carriers led by Delta Air Lines, United Airlines and American Airlines, which have claimed the Gulf carriers received more than $40 billion in subsidies from their governments.

But it is unlikely that the drama in Europe will play out with AEA’s analog in the U.S., Airlines for America (A4A), people familiar with the matter have told Aviation Daily. The issue has sown some dissension, however. Key A4A members Delta, United and America are leading the charge against the Gulf carriers, but others are opposed to tinkering with open skies agreements. JetBlue Airways has been very vocal in its support of open skies, and this camp is thought to include Alaska Airlines, sources said. But the difference in opinion is not thought to be enough of an issue to tear the association asunder, these sources said. 

AEA has more or less followed the Air France-KLM and Lufthansa approach, but vehemently opposed the notion that it was protectionist. IAG has pulled back on its AEA involvement for some time. Walsh did not attend the last AEA summit in Istanbul late last year.

The association is understood to have desperately tried to keep the two IAG airlines on board. According to industry sources, Walsh has refused to take phone calls from AEA Chairman Temel Kotil, who is also the CEO of Turkish Airlines, an airline Air France-KLM and Lufthansa also see as a massive threat.

 Kotil eventually traveled to London to meet Walsh, but was told in a meeting lasting only minutes that the decision is irreversible, according to the sources.

The move could ring the death knell for AEA, an association that has been operating in crisis mode for some time, and raises the question of whether it still has a future. It could give rise to renewed effort for a bigger association of European airlines that could combine what is left of AEA and IACA, the association representing charter airlines. 

According to one source, IAG is considering joining the European Low-Fare Airline Association (ELFAA) which represents carriers such as Ryanair or Easyjet. With Vueling, ELFAA does have low-fare operator in the group.

Walsh has once-before played an instrumental role in turning another association, the International Air Transport Association (IATA), upside down. At the 2011 annual general meeting in Singapore, he supported calls by Gulf carriers for a stronger representation on the board of governors and criticized then-IATA CEO Giovanni Bisignani for his management of the association.