Why are some U.S. airlines fighting to continue exploiting Open Skies?

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We agree with the first half of the letter. As we have repeatedly stated, America’s Open Skies Agreements, and the open/deregulated markets they established, have fostered unprecedented levels of growth for both the US aviation industry and economy at large. We recognize that Open Skies has provided the American aviation industry with a framework for robust growth.

However, what we do not support is the continued abuse of both our Open Skies Agreements and American workers by Qatar and the United Arab Emirates. By providing their airlines with massive and illegal subsidies, those two countries allow Emirates, Qatar Airways and Etihad Airways to rapidly increase capacity at artificially low prices. This strategy is not proving financially sound, however, these airlines are not interested in economics or profit. They only strive to reduce competition and route millions of international passengers through their hubs in Dubai, Doha, and Abu Dhabi. Once they have made enough international routes unprofitable and forced competitors out of markets, Qatar, Emirates, and Etihad can charge the consumer, bereft of other choices, whatever they want.

The author of the letter calls its signers “a diverse group of companies and organizations that benefit from an open and competitive airline system.” (We did notice that the Business Travel Coalition is on the list, so there’s a chance several of those companies do not know they’ve been included.) However, a cursory glance at the list exposes the obvious thread that connects them. From JetBlue to FedEx, the companies and organizations that support the letter benefit from Qatar and the UAE’s illegal subsidization of their airlines.

JetBlue and Alaska, for example, profit tremendously from an increased Gulf carrier presence in America. When Qatar, Emirates, or Etihad establish a new route to the States, smaller American carriers like JetBlue with little or no international capacity of their own (which mean they don’t operate under Open Skies Agreements), are happily waiting to welcome the disembarking passengers onto one of their own planes for domestic short haul travel. So, while these arrangements are great for JetBlue and Alaska’s bottom lines, they do nothing for thousands of hard-working Americans impacted by massively subsidized international competition.

This is where this issue becomes confusing for many. US airlines who directly benefit from the Open Skies exploitation perpetuated by the state-owned carriers of the UAE and Qatar are on the front lines fighting to “Save Open Skies” when what they are actually trying to do is to “Save Subsidized Exploitation of Open Skies”- because for now, it not only benefits their bottom line but also directly and negatively impacts their competition. That’s a two-for-one deal they want to see continue as long as possible.At the end of the letter there is a claim that the US tourism and hospitality industry is threatened by an attempt to actually enforce our trade agreements. This could not be further from the truth. Americans spent about $158.9 billion on international travel in 2016 and 78.6 million visitors are forecast to visit the U.S. in 2017. If Qatar and the United Arab Emirates are forced to stop subsidizing their unprofitable airlines, tourists will still arrive in the United States. America is the world’s largest economy and home to some of the most popular tourist attractions in the world. Millions of foreign visitors and businesspeople visit our great country because they want to, not because they’ve found an artificially low-priced ticket on a subsidized airline. The claim that holding Qatar, Emirates, and Etihad to the same standard as every other Open Skies partner threatens the US hospitality industry is, quite simply, absurd.

The letter delivered to US government officials on Monday is disturbing. The companies and organizations that signed it are actively promoting the Gulf carriers’ anti-competitive and job-killing business practices to benefit their bottom lines. This example of abhorrent self-interest is corporate greed at its worst. Enforcing our Open Skies Agreements may not help these companies pad their Christmas bonuses, but defending well-paid American aviation jobs across the country is far more important.

americans4fairskies2015Why are some U.S. airlines fighting to continue exploiting Open Skies?

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