British Airways and Iberia have quit a European airline trade group amid the on-going row over the threat posed by fast-expanding Gulf carriers.

Parent company IAG said its airlines had withdrawn from the Association of European Airlines because of a difference of opinion with other members towards competition in the skies.

“We believe global liberalisation of our industry is fundamental to our future growth and we are not willing to compromise on this fundamental matter,” IAG said.

In January, Qatar Airways purchased a 9.99 per cent stake in IAG and the UK-based airline group has always emphasised a ‘pro-competition’ stance.

US and European carriers have long-complained that the Open Skies agreements have led to unfair competition in the aviation industry.

The three US airlines jointly complained that Gulf carriers Etihad, Emirates and Qatar Airways have received $42 billion in subsidies from their governments since 2004, making a level playing field impossible.

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