American Airlines has ended codeshare agreements with Qatar and Etihad Airways amid a dispute over alleged illegal subsidies for the Gulf carriers.

The cancelled deals mean American will no longer sell tickets on aircraft operated by Qatar and Etihad.

Passengers were able to buy a ticket that included legs on American and one of the Middle Eastern carriers on a single itinerary.

US and the big three Gulf airlines have been involved in a bitter dispute for a number of years around protectionism and the issue of state subsidies. US carriers complain their competitors from the gulf region have received more than $40 billion in government subsidies since 2004 causing unfair competition and threaten the Open Skies agreement. But Qatar, Etihad and Emirates state the American carriers’ stance restricts choice and harms business.

“We have reached the conclusion that the codesharing relationships between American and these carriers no longer make sense for us,” American said in a statement. “This decision has no material financial impact on American and is an extension of our stance against the illegal subsidies that these carriers receive from their governments.” 

Qatar CEO Akbar Al Baker said on Wednesday that he was disappointed by the decision but it would not affect plans to buy up to a 10 per cent stake in American Airlines.

“Our stock purchase request and filing is going ahead as normal. We had to clarify certain questions of the regulator, which we compiled with,” Al-Baker told reporters in Doha.

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