Let Your Voice Be Heard: End Gulf Subsidies

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At a time when the policy and political battles are full of intensity and frenzy, it’s easy to get distracted by all that is coming at us. At Americans for Fair Skies, however, we aren’t taking our eye off the ball when it comes to Open Skies subsidy violations because we know what is at stake – the long-term viability of our international trade agreements, the future of the U.S. aviation industry, and the livelihoods of the millions of workers employed either directly, or indirectly, by this industry.

americans4fairskies2015Let Your Voice Be Heard: End Gulf Subsidies
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And… He’s at it again: Kevin Mitchell’s misinformation campaign on Open Skies continues

It appears that Kevin Mitchell, the Gulf carriers’ most vocal advocate/unregistered lobbyist, has once again deliberately misrepresented the facts surrounding the Open Skies subsidy fight to strengthen his fundamentally flawed argument against America’s three largest airlines. In a recent Aviation Week opinion piece, Mitchell pushes the same false and tired narrative he’s become known for, and adds in a new attack on the Canadian government’s proactive Blue Skies policy. The piece is intentionally misleading, and Americans for Fair Skies would like to set the record straight.

To start, Open Skies Agreements have created more jobs and opportunities for American workers and consumers than any other aviation agreement or innovation, and both the US3 and Americans for Fair Skies have made it clear that these agreements are wholeheartedly supported. Mitchell continues to peddle the alternative fact that American, Delta, and United are against Open Skies. They aren’t. Kevin Mitchell is lying.

Unlike Mr. Mitchell, however, we do not believe our Open Skies Agreements should be abused. Our trade partners operating under a liberalized air transport agreement should not be allowed to intentionally harm competition and threaten the livelihoods of American workers. The Gulf carriers Emirates, Etihad and Qatar Airways and their state-supporters – the UAE and State of Qatar – have weaponized an innovative idea, and it is not “anti-Open Skies” to want to see the spirit of that idea enforced against the predatory behavior of Mr. Mitchell’s clients. For every route lost to the illegally subsidized Gulf carriers, the futures of 1,500 American aviation workers are dimmed.

So we ask Mr. Mitchell- How can you possibly think that continuing to allow this exploitation can possibly be good for the U.S. economy, American aviation industry, the millions employed either directly or indirectly by that industry, or for the American consumers who face decreasing connectivity and higher long term fares?

Subsidized Gulf capacity growth does not lead to increased traffic nor does it stimulate growth, it only allows for artificially low prices to be offered that aim specifically to force U.S. carriers to abandon once-profitable routes.

Furthermore, Mr. Mitchell has once again tried to equate Gulf subsidization with Delta’s investment in a Chinese airline. Perhaps Mr. Mitchell is unaware that there is a significant difference between how Chinese carriers and Gulf carriers access U.S. airspace. Or more likely he is aware, he just once again sees an opportunity to skew the facts to support his false narrative. Gulf carriers are bound to operate under the terms and conditions, including a fair competition clause, of the Open Skies agreements their state-owners hold with the United States. These Open Skies Agreements mean they do not need U.S. government approval to establish new routes into the U.S. and therefore, despite lack of demand, they have dumped significant new capacity into the U.S., flooding markets with excess seats. China, on the other hand, has no such agreement with the United States. Why? Because their airlines are subsidized, China holds a bilateral agreement with United States- not an Open Skies Agreement, which means the U.S. government has the discretion to approve or deny any/all Chinese carrier expansion into the United States.

Finally, Mitchell’s newest tactic is to attack Canada’s “Blue Skies” policy. Mitchell references (but does not link) to a kiwi.com airfare analysis and claims that Canada’s aviation policies have hurt consumers. We found that study and, unsurprisingly, found that Mr. Mitchell misrepresented the data. Not only did he cherry pick Canada’s worst statistic, but that same analysis also ranks Qatar or the United Arab Emirates as the most expensive aviation markets in 3/4 categories, and 2nd in the last.

Kevin Mitchell and the for-profit Business Travel Coalition continue to spread false information about the Open Skies debate in an attempt to aid the illegally subsidized Gulf carriers.  It’s American workers and consumers will feel the impact of his dishonesty while he lines his pockets with the same money that is being used to perpetuate the largest trade violation in history.

Shame on you, Mr. Mitchell. And shame on whatever group (or groups) is out there funneling you money to keep up your façade to benefit their dishonest lobbying campaign.

americans4fairskies2015And… He’s at it again: Kevin Mitchell’s misinformation campaign on Open Skies continues
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He may love points, but Ben Schlappig doesn’t get the point of the Gulf carrier subsidy fight

We hope you’ve had a chance to see Delta Air Lines’ new short documentary film on the impact of the Gulf carrier subsidies on American aviation and its workers, “Our Future Our Flight.” It provides a clear picture of exactly how the subsidy violations of the state-owned airlines of Qatar and the United Arab Emirates are causing harm to the aviation industry and the hard-working Americans that it employs.

Some folks, however, have taken the opportunity to try and bend the narrative. Recently, a blog post was published on One Mile at a Time by Ben “Lucky” Schlappig taking aim at the new film and, in turn, at American workers. The author fails to understand the importance of the video and the underlying campaign against Gulf subsidies; this is about people’s livelihoods and ultimately the future of U.S. aviation.

First and foremost, the hit piece completely fails to recognize the specific harms that Gulf carrier subsidies are inflicting on American workers and the aviation industry as a whole. For every route lost to Gulf carriers, 1,500 good-paying American jobs are also lost. While it may seem easy to some to take cheap shots and label Delta’s video as propaganda, it does a disservice to the people whose lives depend on these jobs and depend on the success of U.S. airlines. These are peoples’ lives. These employees have invested a lot in this industry, and using these circumstances as an opportunity to take a cheap shot at Delta is particularly troubling. If we, as a nation, don’t take action to stop these subsidies, airline jobs will go the way of the maritime industry and rapidly disappear, (and let’s not forget that the aviation industry alone contributes over 5% of US GDP.)

Not only do these continued Gulf subsidies result in a loss of American job opportunities, but the consumer takes a hit as well. The flooding of existing aircraft routes creates a loss of expansion opportunity for U.S. carriers. It creates an environment where U.S. carriers begin to lose long-haul routes, and thereby puts vital short-haul routes in jeopardy (which are dependent on long-haul feed and revenue), leaving the consumer with far fewer options when buying tickets. The U.S. carriers want to provide more options, more routes, more access to countries like India, which Delta has had to forgo. It’s their job, it’s their passion, and this video displays Delta’s steadfast determination in the face of illegal trade violations. Once the playing field is level, as Delta CEO Ed Bastian said, “We’re going to go back to India…We’re going to be able to add jobs, lots of jobs. We are going to be able to add new longhaul airplanes to support that growth. And that’s just the start.”

So while this video from Delta intended to speak directly to employees about a pressing issue facing the industry has yielded some cheap shots, they’re being taken with no regard whatsoever as to what’s actually on the line here: American jobs and American consumers’ interests. U.S. airlines welcome competition, they want consumers to have a choice, and they want to continue creating good-paying American jobs that bolster our economy. This video addresses an issue that is deeply personal for employees. These massive subsidies that fuel the artificial growth of Emirates, Qatar, and Etihad continue to threaten and limit future opportunities in an industry that is vital to the American economy.

Those who wish to disparage a video detailing a core issue for a company’s employees should look deeper into an issue as complex as Open Skies violations, and have a care for those affected so deeply by the issue before jumping in and attempting to muddy the waters.


americans4fairskies2015He may love points, but Ben Schlappig doesn’t get the point of the Gulf carrier subsidy fight
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Let’s Not Throw A Wrench In An Economic Engine

It’s interesting how you can look at the same thing in different ways, just take airplanes: Many people will look at a commercial aircraft and focus on the jet engines. I look at airplanes and see economic engines. Together, American Airlines, Delta Airlines and United Airlines support over 1.2 million American jobs. Steady skilled work at airlines are the type of jobs that nearly every politician claims they want to support and promote—jobs that, at this very moment, are under attack.

For over a decade, two Gulf nations, the United Arab Emirates and Qatar, have funneled over $50 billion to their state-owned airlines, Emirates, Etihad Airways and Qatar Airways. These massive subsidies violate “Open Skies” agreements—the trade deals that allow international aviation to freely and fairly operate without red tape and government interference. But rule-breaking subsidies provided by these nations are the very definition of government interference in the marketplace. These subsidies are a thumb on the scale that unfairly shifts the balance of what should be fair competition. Allowing Gulf carriers to expand where they want, without any regard for the economic realities under which real American businesses must function, is a complete disregard for the impact on American workers and their families.

Aviation is a resilient industry, but it is not without risks. We’ve made it past hurdles including great economic downturns and the post-9/11 disastrous slump in travel, but it’s simply not possible for a fair-playing American business to compete when faced with this vast trade cheating, financed by foreign government subsidies. If it continues, American carriers will be unable to compete and will be forced to cut routes and reduce service. If this happens, it will be aviation workers and the communities where they live that will suffer.

Economists estimate that each daily round-trip international flight cut due to Gulf airline cheating costs 1,500 American jobs. And it’s not just international flights that are at risk. Our aviation industry operates in a hub-and-spoke system that gives passengers in small, medium and large communities across the country access to a multitude of destinations. This system relies on the passengers that fly to hub cities from smaller airports to take a longer flight outside of the country. If these international flights are lost to foreign carriers, U.S. airlines could be forced to cut services to their smaller local communities, resulting in further loss of jobs for American workers.

Aviation economics is a complicated topic, and there are scores of documents proving the Gulf carrier subsidies and outlining the threat of this kind of rule breaking. But at its heart, this issue is simple: Foreign businesses are breaking trade deals with the United States with violations that force out American businesses and threaten 1.2 million American jobs. That is unacceptable, and if elected leaders are truly committed to putting “America First,” valuing middle-class jobs and ensuring American businesses have the opportunity to compete and succeed, they will put a stop to it.

 President Trump has made clear that stopping trade cheaters and standing up for American workers and their families are his top priorities. Flight attendants and other American aviation workers look forward to seeing him keep his word.
Originally Published on Forbes.
americans4fairskies2015Let’s Not Throw A Wrench In An Economic Engine
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A4FS Responds to Mark Perry

Well, this is awkward.

This morning, a blog was published by Mark Perry, an Economics Scholar at the American Enterprise Institute, in which he used his platform to seemingly argue on behalf of the largest trade violation in U.S. history. Which seems a little odd, because the issue at hand is an economic one, and Mr. Perry, (an economist), doesn’t seem to understand what’s behind it, or what is at stake, at all.

Mr. Perry’s blog makes a rather lazy argument that fails to provide any context for his reader on the issue at hand, which would be the $50 billion in subsidies provided to three Middle Eastern airlines by their governments over the past 10 years in direct violation of the aviation trade agreements they hold with the United States. He ignores, or simply doesn’t bother to understand, the harm these trade violations are causing to U.S. workers and American companies that are playing by the rules.

One would think that as an economist, Mr. Perry would have a better grasp of this issue; but since he doesn’t seem to, we’re going to provide the context and facts that Mr. Perry did not.

Our nation currently has two types of international aviation trade agreements. One is called a bilateral agreement- this means the government plays a role in every new route established. And given that our nation has the world’s largest airspace, that’s a whole lot of government involved in industry. The second type of agreement is called an Open Skies agreement. The U.S. started signing these agreements with foreign nations 25 years ago with aim of reducing burdensome government oversight by creating an open market in which private companies could compete based on an agreed-to set of rules including language around fair competition. These rules include a ban on subsidies and a ban on artificial or predatory pricing practices. The idea was that open markets would stimulate growth, promote competition, and benefit not just the industry served, but also those served by the industry (the consumers).

And indeed, it worked. Now, 25 years later, the U.S. holds 117 active Open Skies agreements with countries around the globe. There’s just one problem- two of the countries who hold Open Skies agreements with the U.S. are in violation of their agreements and have decided to stack the deck in their favor. They have massively subsidized their airlines (the above mentioned $50 billion in subsidies to three failed Middle Eastern airlines: Emirates, Etihad, and Qatar Airways), which have, in turn, used the subsidies to predatorily expand into new markets with no regard to demand and no expectation for returning a profit. These airlines flood those routes with excess capacity and artificially lower prices of seats to drive competition out of markets. For every international route lost by U.S. carriers to this unfair competition, 1,500 American jobs are lost. This is illegal and it is harmful.

Mr. Perry claims to want to represent the consumer’s interest. He says that a lack of choice or a lack of competition is bad for the traveling public. On that front, he is actually correct. But unfair trade practices don’t benefit consumers in the long run. Predatory practices drive out competition, they don’t promote it. And it’s competition that drives down prices for consumers. Not to mention it’s what’s best for the millions of Americans employed either directly or indirectly by an industry that represents 5% of the U.S. economy and is playing by the rules.

We are happy to provide Mr. Perry this simple economics lesson. A lot more information can be found at our website, fairskies.wpengine.com.

americans4fairskies2015A4FS Responds to Mark Perry
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We Want to Fly to India, Mideast – Enforce Trade Deals and We Will, Delta CEO Says

Delta Air Lines (DAL) would resume flights to India and the Middle East if the U.S. were to successfully restrain the growth of the Middle East carriers, says CEO Ed Bastian.

“When we win this fight, we’re going to go back to India,” Bastian said during a 15-minute movie intended to explain Delta’s involvement in the conflict to employees and posted recently on its website.

“We’re going to go back to be able to fly back to the Middle East,” Bastian said. “We’re going to be able to add jobs, lots of jobs. We are going to be able to add new longhaul airplanes to support that growth. And that’s just the start.”

In February 2016, Delta ended its Atlanta-Dubai flight, saying it could not compete with subsidized service to multiple U.S. hubs by Mideast carriers. In May, Qatar Airways began Doha-Atlanta service.

As for India, Delta ended Amsterdam-Mumbai service in March 2015. Today, United is the only U.S. carrier serving India, with flights from Newark to Mumbai and New Delhi.

A study commissioned by Delta, American and United found that the governments of Qatar and the United Arab Emirates have provided more than $50 billion in subsidies to Emirates, Etihad Airways and Qatar Airways, violating the Open Skies agreements that enable flights between the two countries and the U.S.

In the movie, for the first time, a leader of the coalition opposing the Mideast three’s rapid expansion lays out the case that intrusions by the Mideast carriers have dramatically weakened Europe’s carriers.

“Fifteen years ago, the Europeans were some of the strongest airlines on the globe,” Bastian said. “AirFrance, KLM, Lufthansa – they’ve all been harmed massively.” Today the Gulf carriers fly more than 100 daily flights from their hubs into Europe.

Meanwhile, Australia’s Qantas has been turned into a “feeder” for Emirates, said an unidentified voice on the movie.

By contrast, some major countries including Canada have resisted the Middle East carriers’ intrusions

The Mideast carriers, based in countries that combined are the size of South Carolina, have more than 500 widebody orders, more than twice the combined orders from Chinese and U.S. airlines.

“Where are those wide bodies going to go?” Bastian asked. “There’s only three markets that can sustain them.

“I guarantee you that the Chinese are not going to let them in,” he said. “The Japanese will definitely not let them in. In our market, if we don’t wake up, we are going to wind up being overrun by them.”

Among the experts appearing in the movie are Charlene Barshefsky, former U.S. trade representative, who said, “the scope of the {trade} violation here simply takes one’s breath away:”

Jim Burnley, former U.S. transportation secretary, who said the U.S. has aviation “trade agreements with over 120 countries and we’ve got real problems with {just} two of them,” and Doug Parker, CEO of American Airlines Group (AAL) , said “This is about American jobs and our ability to keep American jobs if we don’t do something about this as a country.”

 Delta spokeswoman Elizabeth Wolf said the movie “is part of Delta’s ongoing efforts to urge government officials in Washington to level the playing field for U.S. airlines and enforce Open Skies agreements with the United Arab Emirates and Qatar.
 “Earlier this year, Delta launched an internal campaign to further raise awareness of this issue among Delta employees and encourage them to ask the U.S. government to take action,” Wolf said. “This movie is part of that campaign.”
 The movie was first shown to employees in Atlanta, then shared internally and then made available on Delta’s website last week, she said.
Delta’s shares were down 0.9% to $54.96 early Monday afternoon.

Original article found at: TheStreet.Com

americans4fairskies2015We Want to Fly to India, Mideast – Enforce Trade Deals and We Will, Delta CEO Says
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