LAS VEGAS—The U.S. carriers and allied groups that have alleged the Gulf airlines are subsidized and are opposed to their expansion in the country are toning down their rhetoric, subtly changing the message from one of direct opposition to one that merely seeks compromise.

Lee Moak—whose Americans for Fair Skies organization has been among the most emphatic in its opposition to U.S. expansion by Emirates Airline, Etihad Airways and Qatar Airways—now says his organization just wants the U.S. government to discuss a “trade dispute” with the governments of the United Arab Emirates (UAE) and Qatar. “We’d like that in a simple way,” he said, speaking at the CAPA Americas Summit here. “They [the Gulf carriers] are lobbying against us having that conversation.”

This line was echoed by Will Ris, American Airlines’ senior vice president-government affairs, and Ben Hirst, Delta Air Lines’ chief legal officer.

But despite the rhetoric of “returning to the negotiating table,” the issue is not that simple, people with knowledge of the matter said. In order for the U.S. to begin consultations provided for under the open skies treaties, merely proving subsidies is not enough. Instead, airlines have to prove damage from those subsidies, Jim Callaghan, Etihad general counsel, said. And freezing capacity at the Jan. 28 level before consultations begin—as the CEOs of American, Delta and United Airlines have urged—would abrogate the open skies treaties (Aviation Daily, April 13).

Etihad’s Callaghan maintained that the Abu Dhabi-based airline is “not subsidized.” Instead, its only shareholder, Abu Dhabi, has provided the financial support. “One man’s subsidy is another’s equity,” he said. But he reiterated that the U.S. carriers have not been able to demonstrate that the entry of the three Gulf airlines has harmed their businesses.

This obscures the issue, which is that the three Gulf airlines are the “arms of the state,” Delta’s Hirst said.

“The [UAE and Qatar governments’] policy is to flow traffic over the hub to points beyond to stimulate trade and tourism,” he said. “This is a legitimate government policy but when airlines are subsidized, it distorts the marketplace.”

“We are not opposed to government ownership,” Ris said. “But we are opposed when those airlines have unfettered access to the U.S.,” he said. “The government is the source of the competitive advantage,” Ris added, and the U.S. airlines cannot compete with the deep pockets of the UAE and Qatar governments.

The U.S. carriers are presenting a united front, along with their unions and outside groups, such as the Americans for Fair Skies and the Partnership for Fair & Open Skies. But this is not the approach the Gulf carriers are taking, Callaghan said, who underscored that he spoke only for Etihad. “This is now a government issue,” he said, referring to the U.S. in considering whether to begin consultations. However, Etihad is preparing a study in response to that from the U.S. carriers, he said.

However, Callaghan noted the united front presented by the three U.S. airlines. Callaghan said the white paper the U.S. carriers circulated among government agencies, the press and lawmakers earlier this year has now been taken as “gospel” by the French and German transport ministries to freeze capacity. “This is a coordinated effort.”

The travel, tourism and air cargo industries are vehemently opposed to any tinkering with open skies. “It creates a slippery slope,” U.S. Travel Association President Roger Dow said. “This potentially could start a trade war of epic proportions,” and could encourage other countries to revisit their own open skies treaties with the U.S., which ultimately will harm the U.S. economy, he added.