Enforcement, Not Acronyms, Will Make Open Skies Fair Again

Dear Friend,

Fifty billion dollars is a remarkable amount of money. In fact, scientists believe humans lack the ability to distinguish numerical values that are “large” from those that are “very large.” So basically, fifty billion dollars is so much money, it’s actually impossible for some people to process. What is clear, however, is that evidence has demonstrated that the United Arab Emirates (UAE) and the State of Qatar have subsidized their respective international airlines with more than $50 billion, resulting in a massive distortion of the international marketplace that violates aviation trade law. And while the 50 billion dollar number may be hard to process, the violation of international law is quite clear.
 
Since the evidence of these subsidies was revealed more than two years ago, and as additional evidence of new subsidies has continued to come to light, several individuals and organizations have worked to distort the facts pertaining to the Gulf subsidies and the facts of this case. As a result, supporters of the UAE and Qatar and their air carriers’ illegal trade practices eventually have abandoned the argument that the subsidies don’t exist. It turns out that it’s hard to maintain a lie in the face of overwhelming evidence to the contrary. Instead, they have focused on building a campaign of distortion, distraction, and misleading arguments to avoid the critical discussion necessary on how to resolve the very clear Open Skies policy violations by the UAE and Qatar.
 
To move towards a resolution of the Open Skies violations, it is important to have an understanding of the different types of aviation trade agreements that the U.S. has with other countries. Specifically, Open Skies policies and narrower, heavily regulated bilateral agreements. We’ve explained the differences in the past (you can check it out here). We (the U.S.) hold Open Skies agreements with Qatar and the UAE. It is therefore natural that we would look to these two trade agreements for a path forward when it comes to addressing and resolving any violations. Recently, however, those looking to muddy the Open Skies narrative have claimed that there is different avenue, an IATFCPA (International Air Transportation Fair Competitive Practices Act) proceeding, that should be pursued to address the UAE and Qatar’s illegal trade practices. This is false and is an intentional diversion from the true remedy to this trade violation.
To really make this clear, it’s best to put this issue in context:
  1. Qatar and the UAE are providing massive subsidies to fuel the unwarranted growth, irrespective of market demand, of their state-owned airlines – Qatar Airways, Emirates Airlines, and Etihad Airways – with the specific aim of exploiting the freedoms and deregulated market created by the Open Skies framework and stealing market share from U.S. airlines.
  2. The anti-competitive practices they pursue to undermine competition (including artificially lowering prices and seat dumping) are forbidden by their Open Skies Agreements, specifically Article 11, as they distort the international aviation marketplace and deprive U.S. carriers the ability to compete fairly and equally, as Open Skies policies intend.
  3. The Open Skies agreements already include dispute resolution mechanisms for addressing violations of, or problems with, the Open Skies framework.
  4. As the subsidies provided are being used to violate their Open Skies agreements, and the proof of these subsidies is so overwhelming, the appropriate method for pursuing a resolution to these violations is to use the dispute resolution tools available within our Open Skies agreements.
IATFCPA, however, is a completely different process – one that is as long and as complicated as its acronym. Open Skies agreements are negotiated and oversight is done by the Department of State (DOS). IATFCPA, however, is a Department of Transportation (DOT) process. Regardless of their findings at the conclusion of their, quite possibly lengthy, investigation, it’s more than likely that the DOT would have to hand this back to the DOS for a resolution, as DOT is required to act in accordance with existing international agreements – in this case, Open Skies agreements. It makes no sense to invoke an IATFCPA proceeding when the process to resolve this dispute already exists within the underlying Open Skies agreement that is being violated. The claim that U.S. airlines and their allies are hiding from IATFCPA is therefore not only meant to distract, it is dishonest.
A4FS wants our Open Skies agreements to be enforced. That is what we have fought for from the beginning. Enforcing our international trade agreements makes them stronger and more rewarding for everyone who participates. Proper enforcement sends a message to the international community that no state can take advantage of American workers or companies. So, the question is, why is it that those who also claim they are in favor of Open Skies are so set on arguing against using the very tools that already exist within Open Skies to ensure its effectiveness? The answer is clear: fear. If the Open Skies agreements were enforced to the standard of their intended purpose, the UAE and Qatar would obviously be found in violation of the trade agreements.

The State of Qatar and the United Arab Emirates’ Open Skies violations are the Open Skies framework’s first true test. It is time our government stands up for U.S. workers and enforces the trade agreements, ensuring U.S. jobs are safeguarded from market distortion and unfair competition, and upholding the credibility of each of the more than 120 Open Skies agreements in effect.

To learn more and get involved by taking action, visit us at fairskies.org.

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