Antitrust officials at the US Justice Department have warned of potential major repercussions if the government gives in to demands made by the US’ Big Three airlines to limit Gulf airlines’ flights to US cities.

The move could result in fewer choices and higher fares for consumers, UK-based news agency Reuters reported, citing sources with the agency.

It is the first time that the US Justice Department expressed its concerns over the issue.

The Big Three – United, Delta and American Airlines – and their unions have been pushing Washington to open consultative talks with the Gulf airlines to renegotiate certain terms of the Open Skies agreement and, while doing so, freeze the Gulf carriers’ access to American markets at current levels.

The Big Three have alleged that the state-backed Gulf carriers have received $42bn in subsidies from their home governments over a 10-year period.

The subsidies, they claim, underpinned the rapid expansion of UAE’s Emirates Airline and Etihad Airways and Qatar Airways, effectively violating the Open Skies agreement.

The three Gulf airlines denied they are subsidised and have submitted their counter arguments on the case to the US Transport Department (DoT), which is now reviewing the case.

Even US-based cargo and smaller irlines such as FedEx and JetBlue have also expressed opposition to the Big Three’s demands. They have voiced concerns over potential retaliatory measures from the Gulf countries and carriers if the US government acts unilaterally to freeze Gulf airlines’ access to more US cities. The Gulf countries have been a source of major business through cargo shipments for FedEx and through the supply of passengers originating from international destinations for US domestic carriers.

The DoT has not specified when its review of the case and decision might be finalised.