Big Fibs and Flawed Logic from the U.S. Travel Association

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americans4fairskies2015Big Fibs and Flawed Logic from the U.S. Travel Association
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Airline Employees Rally for Fair Competition

U.S. airline workers today rallied at Newark-Liberty International Airport to protest as Emirates Airlines’ first flight between Athens, Greece and Newark-Liberty International Airport was scheduled to land Sunday night in New Jersey.

United Airlines employees, labor leaders and elected officials rallied at Newark’s Terminal C.

The new route has been the latest issue between the big three U.S.-based airlines – American, Delta and United – and their counterparts in the Middle East Gulf of Emirates, Etihad and Qatar.

The big three U.S. carriers have alleged that the Gulf carriers have received more than $50 billion from their respective governments, altering the international travel marketplace.

This new route, they say, is a prime example of that, calling it a “gross violation” of the Open Skies agreement.

“It’s crystal clear that the U.S airlines and their employees are looking to President Trump to enforce our international agreements with the trade cheaters of the UAE and Qatar,” said Jill Zuckman, chief spokesperson for the Partnership for Open & Fair Skies, the trade group for the big three U.S. airlines and dozens of aviation unions. “We have 1.2 million quality American jobs that are being threatened by foreign government subsidies and we need President Trump’s help to protect these jobs.”

The Partnership says that with the government subsidies, Gulf airlines are able to offer as many international routes to the U.S. as they want in a fare war with American carriers – even if the routes aren’t profitable.

According to the group, U.S. carriers have offered as many as three non-stop flights per day on the Newark-Athens route at times of the year when demand can support non-stop service. The market to Athens is highly seasonal and in the winter months only about 100 passengers per day on average fly between the two cities each way – far too few to make a nonstop flight viable for a market-based airline. This indicates that a flight year-round is not viable for a profit-driven airline.

When a Gulf carrier enters a new U.S. market, the Partnership said, passenger bookings for international itineraries on U.S. carriers and their joint venture partners declined an average of 21.4 percent in Seattle, 14.3 percent in Washington, D.C., 13.3 percent in Orlando, 13.1 percent in San Francisco, 8.8 percent in Chicago, 10.8 percent in Boston and 7.6 percent in Dallas-Fort Worth.

Originally Published on Travel Pulse.

americans4fairskies2015Airline Employees Rally for Fair Competition
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United Airlines President Says Emirates Tests U.S. With Money-Losing Athens-Newark Flight

United President Scott Kirby says Emirates will lose an estimated $25 million to $30 million annually on its Athens-Newark route, where service begins Sunday.

Nevertheless, Emirates opened the route “to see what the U.S  government will do,” Kirby said, in an interview. “It feels like a test of the political will of the United States.”

The route was announced on Jan. 23, three days after Donald Trump took office as president. Newark is a United hub.

While the big three U.S. carriers – American, Delta, and United – have battled rapid U.S. expansion by subsidized Middle East carriers Emirates, Etihad and Qatar, they are particularly troubled by Emirates’ two fifth freedom flights: Athens-Newark and Milan-Kennedy.

Under aviation law, fifth freedom flights serve two foreign countries.

Emirates. the United Arab Emirates airline owned by the government of Dubai, began Milan-JFK in 2012. “That one route was in place for a long time, then the election happened and Emirates started {Athens-Newark},” Kirby said.

 For United, he said, “This isn’t just about Newark-Athens, it’s about our entire international franchise. If Emirates can come in and lose significant amounts of money, and the {Dubai} government will make up their losses, it’s not fair competition. {And} if they’re allowed to fly this route, there will be more to come.

“We can compete on a level playing field with any airline in the world, but we can’t compete with subsidized airlines,” Kirby said. “It’s no different than dumping steel or dumping tires. You’re selling below costs.”

Such competition typically results in lost U.S. jobs. “You see what happens to jobs around the country, when { U.S.} companies compete with subsidized competition,” Kirby said. “We don’t want that to happen in the airline industry.”

United serves Newark-Athens seasonally, operating this year between May 24 and early October.

Kirby said United makes money on the route in the summer, but in the winter, demand is limited to about 100 passengers a day. Yet Emirates will operate a Boeing 777 seating 354 passengers.

“If they got 100% of the market, which of course they won’t, that’s less than a third of the seats on the airplane,” Kirby said. “That’s evidence that they are not focused on profitability. They are just focused on flying the airplane somewhere and having the government subsidize it.”

Emirates could fill the airplane if it lowers fares sufficiently, but “If you’re doing that, you are still losing money,” Kirby said.

A report by the Partnership for Fair and Open Skies, which represents the big three U.S. carriers and most of their unions, says government subsidies to the three Mideast carriers has totaled about $50 billion.

Subsidies violate the Open Skies treaties that allow foreign airlines to serve the United States.

As for Emirates, the most successful of the Gulf carriers, it has received at least $5 billion in subsidies since 2004, the report said. In 2015, Emirates President Tim Clark said the charge that subsidies support Emirates is “tosh.” Tosh is a British word for nonsense.

Kirby said it is laughable to say that Emirates is not subsidized – so laughable, he said, that “I cannot respond.”
Originally Published on Forbes.
americans4fairskies2015United Airlines President Says Emirates Tests U.S. With Money-Losing Athens-Newark Flight
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Delta CEO: Airlines Should All Fly Fair

Delta Air Lines’ CEO is hopeful the Trump administration will assist major U.S. airlines in their dispute with Gulf carriers over alleged government subsidies and unfair access to U.S. air routes.

U.S. airlines maintain that Emirates, Etihad Airways and Qatar Airways — which all fly out of Boston — have received billions in government subsidies from Qatar and the United Arab Emirates in violation of the U.S. Open Skies agreement governing airlines’ rights to offer international passenger and cargo services.

“We’re very hopeful,” Delta CEO Ed Bastian said at a Boston College Chief Executives Club lunch in Boston yesterday.

“We are up against governments that are flying against us, rather than airlines,” he said.

The Open Skies agreements are based on airlines playing by the same rules, Bastian said.

“They’re subsidized, we’re not,” he said, noting he’d like Gulf carriers to be more transparent and held accountable, and the U.S. to suspend their growth until new agreements are reached. Bastian’s optimism about the Trump administration follows a Feb. 9 White House meeting between Trump and U.S. airline executives.

“His opening comments … were on that topic, and he acknowledged the challenges that these foreign governments are (posing) and the lack of a level playing field,” Bastian said. “He ran on a platform of protecting American jobs and enforcing U.S. trade agreements. We think we’re one of the industries that’s been most impacted.”

In January, Delta reported its highest annual profit ever: $6.1 billion in adjusted pretax income that allowed for $1.1 billion in employee profit-sharing. But Bastian said the Open Skies issue also speaks to the future economic climate for U.S. airlines.

European carriers Lufthansa, Air France and KLM, and Asian carriers Singapore Airlines and Cathay Pacific, are struggling because the Gulf airlines have taken their traffic pools, Bastian said.

“Qantas is no longer the national airline of Australia, it’s Emirates,” he said. “Do we want that to be this country in 10 years from now?”

Bastian also spoke about Trump’s new travel ban that barring another legal setback, will take effect Thursday and temporarily prohibit refugees and others from certain Muslim-majority countries from entering the United States.

“We appreciate that this most recent executive order came out to give us some lead time in terms of how to implement it,” Bastian said.

Originally Published on Aviation Pros.

americans4fairskies2015Delta CEO: Airlines Should All Fly Fair
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Lawmakers urge Trump to ground Emirates flights

Lawmakers are urging President Trump to put the brakes on an Emirates flight route that will soon begin flying between the U.S. and Greece, raising concern about an air carrier that receives billions of dollars in state subsidies.

In a letter to the White House this week, bipartisan members representing New Jersey and New York said it’s unfair for U.S. airlines to compete with Emirates and other Gulf carriers that get massive foreign subsidies.

They accused state-owned airlines of undermining the international Open Skies agreement and called on Trump to delay the new roundtrip Emirates flight route between Newark, N.J., and Athens, Greece — which is scheduled to begin Sunday — in order to renegotiate a “meaningful resolution.”

“Foreign governments that violate their agreements with the United States need to be held accountable,” the letter said. “Like you, we believe that our trade agreements must be enforced so that foreign governments understand that they can’t break the rules.”

The U.S. aviation industry has long expressed frustration that state-owned airlines are posing a threat to U.S. jobs. United Airlines employees and unions are planning a rally at Newark Liberty International Airport on Sunday to shine a further spotlight on the issue.

Critics say that more than $50 billion in subsidies have been funneled to Emirates, Etihad Airways and Qatar Airways to rapidly expand their services and outpace their industry rivals.

During a meeting with airline executives at the White House last month, Trump acknowledged that U.S. airlines are “under pressure from foreign elements and foreign carriers.”

But “at the same time, we want to make life good for them also,” Trump said. “They come with big investments.”

americans4fairskies2015Lawmakers urge Trump to ground Emirates flights
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