US cargo airlines up in arms over Saudia flying rights request

The three largest U.S. all-cargo airlines are opposing a request by Saudi Arabian Airlines for permission to operate cargo flights from Liege, Belgium, to New York and Chicago because the Kingdom of Saudi Arabia doesn’t grant similar flexibility to U.S. carriers to fly there from third countries.

FedEx Express (NYSE: FDX), UPS (NYSE: UPS) and Atlas Air said in separate responses to the Department of Transportation on Tuesday that they support expansive air traffic rights but that the Saudi government restricts them from flying the most commercially efficient routes. The country’s flag carrier shouldn’t get a privilege that isn’t reciprocated, they argued, because it would put them at a competitive disadvantage.

The dispute centers on so-called “seventh freedom” flying privileges, which don’t require an air service to connect to the home country. The right means an airline can essentially operate a foreign hub, which is especially helpful for all-cargo carriers that often get booked for ad hoc charters to irregular destinations. A first freedom, for example, provides overflight rights. A third freedom allows a carrier from one country to land in the country granting the right to deliver passengers and/or cargo. Freedoms of the air are usually conferred through bilateral negotiations between countries. 

Saudi Arabian Airlines applied for an exemption from the existing bilateral rules governing air transport by U.S. and Saudi carriers so it can commence all-cargo service early this year between Belgium and the U.S. Saudia said the grant of seventh-freedom rights will expand airlift options during a period of heavy volumes as many companies shift to moving goods by air to avoid backlogs at U.S. seaports. The airline said it has received numerous requests from customers to provide trans-Atlantic service due the limited availability of cargo flights.