Latest skirmish in war to control international travel: Has the Fly America Act been violated?

U.S. airlines, which already see themselves at war with subsidized Persian Gulf competition, now are aggrieved with their own government after a pair of choice routes to Europe and the Middle East were effectively awarded to the Emirates airline.

“We view it as a violation of the Fly America Act,” said Jill Zuckman, spokeswoman for a coalition of U.S. carriers. “It’s a ‘screw you’ to Congress.”

Congress decided in 1981 that federal employees, their families, and federal consultants and contractors had to travel aboard U.S. carriers when on official business paid for by the government. Selecting routes for approved federal travel was left to the General Services Administration, which manages the inner workings of government.

It’s all a ruse, Delta Air Lines said in a letter to the GSA’s general counsel this month, because JetBlue does not have any planes that can fly that far. Instead, Delta said, the passengers will fly on JetBlue’s partner airline, Emirates, the United Arab Emirates airline that bases its operations in Dubai.

The GSA counters that JetBlue was a legitimate bidder for the routes — regardless of its connection with Emirates — and got the nod because it offered cheaper fares than the three larger U.S. airlines.

JetBlue said in a statement that “GSA awards contracts that deliver the best value to the U.S. taxpayer and JetBlue is honored to have this traffic with our codeshare partner.” GSA said that opting for JetBlue was “in compliance with the Fly America Act.”

All of this would be inside-baseball intrigue — bickering over routes to Milan and Dubai — were not far larger stakes in play.

The big U.S. airlines that ply long international routes — Delta, United and American — are in the midst of a protracted fight to limit the rapid expansion of Persian Gulf carriers that appear determined to one day dominate global air travel.

Eager to diversify from an oil-only economy, the UAE and Qatar governments have given generous help to develop three muscular airlines: Emirates in Dubai, Etihad Airways in the UAE capital of Abu Dhabi, and Qatar Airways in Doha.

From a Western perspective, the clannish interlocking relationships and secrecy of their tribal culture are the antithesis of the corporate world. The U.S. airlines have asked federal officials to intercede on their behalf by renegotiating Open Skies agreements that govern international air travel.

 The U.S. Transportation Department has yet to show any serious inclination to wade into a sticky situation that could lead other nations revisit their pacts with the United States.

Open Skies agreements with more than 100 nations allow airlines from different countries equal access to one another’s airports without interference from the respective national governments. There have been informal talks with the two gulf nations, but they have not been kicked up to the level of formal renegotiations.

“We find it frustrating that while we’re trying to find a resolution and a path forward to level the playing field [with the gulf carriers], the GSA is awarding additional services on Emirates,” said American Airlines Vice President Howard Kass.

Airline observers say the U.S. carriers probably would be assuaged if the three gulf airlines unilaterally agreed to pull back their horns, particularly in the U.S. market for transatlantic and transpacific flights.

But the gulf airlines show no signs of backing off. By one of many measures — purchases of the Airbus 380, the world’s largest passenger jet — their global intentions are clear. Emirates is the single largest operator of the massive planes, with 76 on order. Qatar has six, and four more on the way. Etihad owns eight, with two on order and options to buy 15 more.

When United Airlines announced in December that it no longer could afford to compete with Emirates in flying to Dubai, the airline issued a statement that said: “It is unfortunate that the GSA awarded this route to an airline that . . . will rely entirely on a subsidized foreign carrier to transport U.S. government employees, military personnel and contractors. JetBlue merely serves as a booking agent for Emirates.”

Two weeks ago, Delta’s general counsel, Peter W. Carter, sent a letter of protest to the GSA after JetBlue was approved for the Milan flight.

“As you are well aware, this award is for JetBlue in name only, as 100 percent of the flights on the contracted route will be operated by Emirates Airline,” Carter wrote.

Orignally Published on The Washington Post.