Airline CEOs: Subsidized Gulf airlines are violating trade agreements, threatening US jobs

July 12, 2019 , , No comments

For decades, the U.S. aviation industry has served as an economic engine in every state, creating jobs for millions of Americans and building business opportunities across a wide range of industries. We’re proud that the three airlines we lead are an integral part of this story.

But in recent years, two foreign countries have thrown a wrench into this engine. For over a decade, the United Arab Emirates and Qatar have violated trade agreements with the United States by funneling over $50 billion in subsidies into their government-owned airlines — Emirates, Etihad Airways and Qatar Airways. These state subsidies are destabilizing the global airline industry and threatening to undermine our nation’s entire system of trade enforcement. Left unchecked, they send a signal that other countries can ignore our trade deals and trample upon our workers without consequences.

Thankfully, last year President Donald Trump negotiated new agreements designed to end these trade violations, mandate financial transparency and restore fair competition. But before the ink was even dry, these countries that are meant to be our partners were looking for loopholes.

Workers pay price for unfair trade

Qatar is perhaps most blatantly disrespecting its January 2018 agreement. The country pledged that its airline would not launch any flights directly between the United States and Europe. It quickly shrugged off the commitment by investing in a failing regional Italian airline and rebranding it as Air Italy, which is now being used as a proxy for new subsidy-backed routes between the U.S. and Italy.

To be clear, U.S. airlines are not opposed to competition. We compete each day for the business of millions of travelers, whether our rivals are large, small, private or government-owned. But what’s happening with the Qatar and UAE airlines is not fair competition.

Subsidies allow these carriers to fly money-losing flights in a way no rational commercial airline could afford. It is an advantage that no airline — no matter how big — can reasonably overcome. Ultimately, it’s U.S. airline workers who pay the price.

President Trump campaigned on a platform of defending American workers from bad deals and unfair trade practices. By violating their Open Skies agreements, Qatar and the UAE are putting over 1.2 million American jobs in jeopardy. It isn’t just the hard-working pilots, flight attendants and ground crews whose livelihoods are at risk; it is everyone who depends on the economic engine that the aviation industry creates for our country. An economic analysis we submitted to the government shows that for every long-haul international route a U.S. carrier loses or forgoes due to subsidized Gulf carrier expansion,1,500 American jobs are lost.

It also raises questions about how the United States should deal with partners that openly undermine trade agreements. In any business, you wouldn’t stand by and do nothing while the other side refuses to comply.

In light of actions by Qatar and the UAE over the past year, the Trump administration likely now sees that they have no intention of complying with their longstanding Open Skies agreements or last year’s deals.

Don’t reward bad behavior

Aside from Qatar’s blatant actions regarding Air Italy, we’re also seeing obvious inaction on the part of both countries when it comes to financial transparency. In fact, the Gulf carriers are less transparent today than before the UAE and Qatar signed their respective agreements.

Failure to enforce these agreements sends a message to other countries that they can take advantage of the United States without consequences. That can’t be our position. If Qatar and the UAE aren’t willing to uphold their side of the deals, the United States should consider removing itself from these two Open Skies treaties altogether.

This administration knows a trade violation when it sees one. The United States must act decisively to hold Qatar and the UAE accountable. Failure to do so would reward bad behavior and signal to other countries that they too are free to exploit American workers. That is a dangerous precedent that our airline workers and our country cannot afford.

Originally Published on USA Today.

americans4fairskies2015Airline CEOs: Subsidized Gulf airlines are violating trade agreements, threatening US jobs
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For Trump, an Opportunity to Defend American Workers

June 4, 2019 , , No comments

One of the key reasons many workers across the country supported Donald Trump in the 2016 election was his willingness to call out countries that violate U.S. trade agreements. For far too long, the United States has been unwilling to enforce its trade deals — and as a result, the U.S. airline industry is under attack right now from foreign trade-violators who claim to be our partners.

For over a decade, Qatar has subsidized its state-owned carrier Qatar Airways to the tune of more than $25 billion in violation of the country’s Open Skies aviation trade agreement with the United States. To address the subsidies, the Trump administration announced in 2018 that it had obtained a commitment from the Qatari government to end the trade agreement violations and cease launching new flights directly between the United States and countries outside Qatar.

Yet, Qatar was already preparing to break the deal before the ink on its commitment was dry. In 2017, Qatar Airways bought a substantial stake in Meridiana, a struggling Italian carrier, and rebranded it as Air Italy, and announced that Qatar would massively expand Air Italy to make it the dominant carrier between the Italy and the world.

Qatar Airways installed many of its top executives in leadership roles at Air Italy. Two of Air Italy’s five board members have ties to Qatar Airways. Air Italy’s chief operating officer held the same position at Qatar Airways, running the Middle Eastern carrier’s day-to-day operations. Air Italy’s top flight and ground operations executive held a similar position at Qatar Airways. On top of that, Qatar Airways gifted Air Italy 50 new planes and invested heavily in the Italian carrier. The intent was clear: redirect Qatari government subsidies into Air Italy and use the carrier as a proxy for Qatar Airways.

In this role, under Qatar Airways’ backing and direction, Air Italy is launching new routes to the United States. It doesn’t matter if these routes lose money because continued infusions of Qatari subsidies will wipe away any losses. Given the difficulty they face in matching this subsidized competition, U.S. carriers may well be forced out of markets, which could result in my fellow pilots, as well as others in the airline industry, losing their jobs.

Recently, Qatar Airways’ supporters have delivered a half-hearted defense of Qatar’s attempts to break its promises to the Trump administration. In a letter to the Trump administration, Qatar Airways’ few supporters claim the Air Italy transaction was legal and approved by European regulators. But therein lies the problem. What may benefit Qatar can hurt the United States and its workers. The Trump administration’s foremost obligation is to look out for American interests and especially American industries and workers––whether that is the pilot, flight attendant, ground crew, or airport employee. U.S. airline industry jobs are exposed and stand to be affected by Qatar’s continuous violations––and by extension those of Air Italy.

What American workers need –– and what the entire country needs – –is for the Trump administration to enforce its understanding with the government of Qatar that Qatar Airways will be financially transparent and not introduce new nonstop flying between the United States and points outside Qatar.

Trump campaigned on being a strong advocate for U.S. workers. As the leader of a union that represents more than 62,000 pilots across the United States and Canada, that message resonates. We hope the administration will make good on the president’s pledge and call out these trade violators. Ensuring that all carriers follow the same rules is the most important action our government can take in helping the global aviation industry thrive.

Originally Published on Inside Sources.

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After agreement with Middle Eastern rivals, Delta to resume nonstop flights to India in 2019

May 25, 2018 , , No comments

Delta Air Lines will fly nonstop from the U.S. to India for the first time in a decade, a decision the airline said was due to recent agreements over three of its Middle Eastern rivals’ practices.

The flights will begin next year and either depart from New York’s John F. Kennedy International Airport or Delta’s home base at Hartsfield-Jackson Atlanta International Airport, but the airline has not made a final decision.

Delta’s announcement came after agreements this year appeared to put to rest a bitter, years-long dispute with three Persian Gulf airlines — Qatar Airways, Emirates and Etihad — which U.S. airlines said received government subsidies making it impossible for the U.S. carriers to compete in certain markets.

Delta CEO Ed Bastian told CNBC earlier this month the airline intended on returning to markets, including India, where it had been “hurt” by the three carriers.

In January, Qatar agreed to open its books and provide financial statements. Earlier this month, the United Arab Emirates agreed to a similar deal with the Trump administration. Bastian credited the administration for allowing the airline to restart the service to India. The three Persian Gulf carriers involved in the dispute with their U.S. competitors offer frequent service from their hubs to India.

“This move will mark a return to India for Delta, which was forced to exit the market after subsidized state-owned airlines made service economically unviable,” the company said in its announcement

The service requires government approval, Delta said, adding that it plans to also expand its code-sharing agreement with local partner Jet Airways to carry passengers to other destinations in India.

United Airlines is the only U.S. airline that currently flies nonstop to India from the United States.

Published on CNBC.

americans4fairskies2015After agreement with Middle Eastern rivals, Delta to resume nonstop flights to India in 2019
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Trump deal on global airline competition makes the skies more open

May 21, 2018 , No comments

By: Peter Navarro, Assisant to the President for Trade & Manufacturing Policy

This week, President Trump secured another big win for American workers and businesses. At the direction of the White House, Secretary of State Mike Pompeo, working closely with the Department of Transportation, struck a deal that resolved a three-year “Open Skies” disagreement between the U.S. and the United Arab Emirates over the UAE’s unfair subsidization of its two major airlines, Etihad Airways and Emirates Airline.

The U.S. has signed “Open Skies” civil aviation agreements with about 125 countries, including the UAE and Qatar, which are intended to facilitate the growth of an efficient, market-based international aviation system. Worldwide, these agreements have helped protect the interests of American workers and businesses, but in the case of UAE and Qatar, serious concerns were raised about their effectiveness.

According to some U.S. airlines, the oil-rich governments of the UAE and Qatar have provided their air carriers over $50 billion in subsidies since 2004. These American carriers have asserted that the subsidy-enabled dumping of airline capacity by the Gulf carriers into the U.S. market has nearly eliminated U.S. airline service to the Middle East and India.

For every long-haul route forgone by U.S. carriers, more than 1,500 American jobs are lost, they estimate. The result of this unfair competition, these U.S. airlines allege, is that Emirates, Etihad, and Qatar Airways have become among the fastest growing carriers in the world. The UAE’s Dubai airport is now one of the world’s busiest.

What these U.S. carriers have been arguing is simple: Their pilots, flight attendants, machinists, and other working men and women flying our open skies cannot compete with state-owned airlines operating outside the free and fair marketplace envisioned by the Open Skies framework. The pleas of these U.S. carriers, however, fell on deaf ears during the Obama Administration.

In contrast, the Trump White House quickly assembled a task force with representatives from the two key agencies – the State Department and Department of Transportation – along with representatives from the Departments of Commerce and Justice, the U.S. Trade Representative, and the Council of Economic Advisers. Emblematic of Trump’s America First policies, the State Department was directed to secure a new understanding with Qatar, which was consummated in January, and then with the UAE, which was achieved this week.

The contours of these two new understandings are very similar. First, the parties acknowledge that government subsidies adversely affect free and fair competition in the international aviation market. The Gulf carriers should pay their full and fair share of the costs of operating out of their international airports.

Second, the UAE and Qatar governments have committed to financial transparency and to conduct transactions based on commercial terms. Their airlines should not operate behind an opaque accounting wall that shields their government subsidies from public view. Together, these reforms should substantially curtail any unfair subsidization.

Third, both the UAE and Qatar governments have informed the U.S. that their respective carriers have no current plans to begin any new commercial “Fifth Freedom” flights. This is particularly important to the concerned U.S. carriers, as such routes involve the Gulf carriers flying from the U.S. to destinations like Europe without U.S. travelers ever landing in Qatar or the UAE.

By addressing the concerns of these U.S. carriers and standing against unfair trade practices, President Trump is keeping his own campaign promises at a record pace. He has slashed the corporate tax rate, eliminated scores of unnecessary regulations, unleashed our coal and petroleum resources, and withdrawn from bad deals ranging from the Paris Climate Accord and Trans-Pacific Partnership to the Iran nuclear fiasco. He has taken action to address threats to our national security by imposing tariffs on aluminum and steel and negotiating means to address those threats with various countries. He has also taken action to address injurious imports of solar cell and modules and washing machines, thereby stimulating significant new investment on U.S. soil. He has successfully renegotiated the deeply flawed South Korea trade pact.

 

Peter Navarro is the director of the National Trade Council.

Published on The Washington Examiner.

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A voice for the American worker

May 17, 2018 , No comments

By: James H. Burnley IV, former U.S. Secretary of Transportation

Presidents are judged by how they stand up for the American people. Whether it is protecting U.S. jobs or safeguarding our industries and our jobs from foreign trade cheating, we expect our presidents to act in the best interests of Americans.

That was one of the defining principles of President Reagan’s administration, and I was proud to put his agenda into action as his secretary of Transportation. Today, I see that same vision coming from the Trump administration. In less than 18 months, President Trump has shown the world that he will always be a voice for the American worker.

This week, that voice got louder. On Monday, the Trump administration announced a historic agreement with the United Arab Emirates (UAE) over its Open Skies violations. For more than a decade, the UAE subsidized its airlines — Emirates and Etihad Airways — to the tune of more than $25 billion. Those subsidies violate the UAE’s Open Skies agreement with the United States, a bilateral treaty that allowed airlines from the two countries to travel back and forth without restrictions or government interference.

Beyond the blatant trade cheating, the UAE’s subsidies put 1.2 million American jobs in jeopardy. These are workers who rely on a strong U.S. airline industry — an industry that for decades has been a symbol of the strength and vibrancy of the American economy. To allow it to crumble because of foreign trade violations would be unfathomable.

Fortunately, Mr. Trump acted decisively. His administration’s agreement with the UAE requires it to commit to unprecedented transparency measures — from engaging in transactions based on commercial terms to meeting new, tough financial disclosure standards. The UAE also agreed to freeze additional “fifth freedom” flights to the United States — routes that take passengers between two countries without stopping in the carrier’s home country.

Peter Navarro, director of the White House National Trade Council, put it more succinctly: “There will be no additional routes into the United States until further notice.”

Additionally, the UAE acknowledged for the first time that government subsidies hurt competition. After years of denying the dangerous effects of its subsidies, this is without question a historic moment.

It comes just a few short months after the Trump administration negotiated a similar agreement with Qatar over its subsidization of Qatar Airways. Collectively, these agreements represent the most significant progress on this issue in over a decade.

Throughout this fight, U.S. airlines, unions and the hundreds of thousands of workers they represent have been supported by more than 310 members of Congress, more than a dozen governors and hundreds of local officials and business leaders. They are Republicans and Democrats. They come from every corner of the country, rural and urban areas alike.

What they share is a desire to see a strong U.S. airline industry. When that happens, U.S. airline workers can pay off their mortgages, send their children to college and save for retirement. And U.S. travelers get more choices and better options for international travel, which in turn, allows U.S. carriers to service small and mid-sized communities around our great country.

But the work is far from over. Everyone must remain vigilant — from our elected officials to aviation leaders to the men and women whose jobs were threatened. We can expect the Trump administration to make sure the UAE and Qatar uphold the agreements — and take a dim view of any attempt to shirk their commitments. In announcing this deal, Mr. Navarro was clear: “What we expect moving forward is transparency, full accounting, stopping of subsidies and a freeze on routes until further notice.”

After years of inaction by the Obama administration to hold the UAE and Qatar accountable, we are finally seeing real progress from the Trump administration. Just like Mr. Reagan, Mr. Trump has positioned himself as a strong defender of American workers. For that, he deserves our high praise.

Published on The Washington Times.

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Delta Eyes New Flights to India after Gulf Deal

May 14, 2018 , , No comments

Delta Air Lines Inc. Chief Executive Ed Bastian said an agreement between the U.S. and two Persian Gulf states affords new protections to U.S. airlines that make it worth restarting service to foreign destinations that could include India.

“We can now go back into markets that we’ve been run out of,” he said Monday in an interview.

Hours after the U.S. and the United Arab Emirates reached an agreement, a diplomatic spat broke out over its interpretation.

Gulf carriers such as Emirates Airline for years have been taking market share on flights to India and Africa from U.S. and European airlines. U.S. airline executives and some lawmakers have argued that Gulf carriers have illegal government backing to buy jets and set fares at below-market price.

The U.S. and the United Arab Emirates on Monday said they’d resolved the dispute, mirroring a deal struck earlier this year between the U.S. and Qatar.

However, White House adviser Peter Navarro later told airline industry leaders that the U.A.E. had agreed to freeze additional flying between the emirate and the U.S. via Europe.

U.A.E. officials said the issue hadn’t been raised in months of talks.

United Continental Holdings Inc. UAL +0.88% is the only U.S. carrier that flies direct to India, from its hubs in Newark and Chicago. American Airlines Group Inc. AAL +0.54% dropped its Chicago-to-New Delhi service in 2012, three years after Delta ended a flight from New York to Mumbai. Delta also stopped a Mumbai flight operated via Amsterdam in 2015.

Gulf carriers such as Emirates deny they receive illegal subsidies. They say they have expanded consumer choice by offering more flights, lower fares and better service than their U.S. airlines and their European partners such as Deutsche Lufthansa AG and Air France-KLM SA.

European officials are also in discussions with Persian Gulf states over alleged airline subsidies.

The new agreements commit Emirates and Etihad Airways in neighboring Abu Dhabi, as well as Qatar Airways, to improve financial disclosures and avoid doing business at low prices with service companies that are in turn subsidized by Gulf governments.

Gulf government officials said financial transparency was important, but the new agreements left airlines free to operate as before.

“U.A.E. and U.S. airlines will continue to have complete commercial flexibility to add or adjust service to meet travelers needs,” said U.A.E. Foreign Minister Sheikh Abdullah bin Zayed Al Nahyan.

Emirates, the world’s largest carrier by traffic, said it welcomed the U.S.-U.A.E. agreement but that it wouldn’t curb existing flights and retained the right to expand services to the U.S., including flights via Europe.

The U.S. pacts with the U.A.E. and Qatar preserve existing open-skies aviation deals that allow unlimited direct flying between the two nations. The pacts also protect other benefits including rights for U.S. cargo carriers such as FedEx Corp. to operate a hub in Dubai.

The U.S. has such deals with more than 100 countries, with China a notable exception.

The Chinese government still controls the country’s largest airlines, which in recent years have rapidly expanded service to the U.S. and started funneling passengers and cargo from other countries through their own airport hubs.

American CEO Doug Parker has said state subsidies to Chinese carriers are “nothing close” to the level secured by Gulf carriers.

Still, Mr. Bastian said the subsidies stood in the way of open-skies deals.

“That would be a discussion at the table before an agreement was reached,” he said.

Delta has a 3.6% stake in China Eastern Airlines Corp. Ltd. American—which also campaigned against the expansion of Gulf carriers-—is allied with China Southern Airlines Co. Ltd.

“We will see what happens if we ever get to open skies with China,” Mr. Parker said in an interview earlier this year.

The U.S. and China haven’t held talks on liberalizing their aviation deal for several years. However, airline executives said an opportunity may emerge next year when new capacity becomes available at congested airports in Beijing and Shanghai.

Published on The Wall Street Journal.

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President Trump Takes Action Against UAE Open Skies Violations

May 11, 2018 , , , No comments

Friends,


News broke today that as a result of President Trump’s leadership on trade enforcement to safeguard U.S. jobs, the United Arab Emirates (UAE) has agreed to end its market distorting airline subsidies and freeze any additional new 5th Freedom routes into the United States. This is a huge step forward in the fight for fair competition in the international aviation marketplace.

Americans for Fair Skies, and the tens of thousands of aviation workers and hundreds of thousands of Americans who have spoken up in support of our effort, sends its sincere appreciation to President Trump and his Administration for taking meaningful action to end the aviation subsidies by the UAE, and its two state-owned airlines, Emirates Airline and Etihad Airways. President Trump’s leadership and deal-making savvy has now led to successful negotiations for U.S. workers with both the UAE and State of Qatar, which was announced this past January, the two biggest trade cheaters in aviation history. President Trump’s agreements with the UAE and Qatar will ensure that U.S. aviation companies and their workers, consumers, communities, and our country will remain competitive and safe from unfair trade practices.

The recognition that subsidies in aviation are wrong and the increased transparency agreed upon by the UAE will allow the U.S. government to ensure that Emirates and Etihad (and Qatar Airways from the previously announced agreement) all operate free from state subsidization and quickly address the issue if any of the carriers continues to cheat. Like the agreement with Qatar, the UAE agreement also forces the UAE airlines to cover their own airport expenses instead of letting its government pick up the tab.

Most significantly, the Trump Administration successfully received assurances from the UAE and Qatari governments that their will not operate any new 5th Freedom flights into the United States. This is huge, especially for the UAE, as Emirates had been planning a massive, job-killing expansion into the United States, which is now frozen.

The Gulf carriers, Emirates, Qatar Airways, and Etihad Airways, have received over $50 billion dollars in illegal subsidies from the governments of Qatar and the United Arab Emirates. These illegal subsidies have cost over 1,500 American jobs for each discontinued or forgone international flight, hurting U.S. companies and their workers. The subsidies have hurt America’s consumers and connectivity by reducing the number of flight options and destinations, impacting over 8,000 consumers each day. This will now halt, as President Trump has put American workers first, and put a framework in place to end the subsidies from the UAE and Qatar.

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Open-skies enforcement good for Kansas workers

April 20, 2018 , No comments

Kansas has a rich history of aviation that stretches back all the way to the dawn of flight. In fact, Glenn L. Martin grew up in my hometown of Salina, later starting a business with the Wright brothers, and lending his name to current-day Lockheed Martin.

Our great state houses one of the five aerospace clusters in the world, and over 32,000 Kansans are directly employed by the industry. With our central location and deep aviation roots, Kansas has the potential to benefit even more from a healthy American aviation industry through added jobs and increased connectivity.

However, one major international dispute has the potential not only to stall any future growth in the industry, but also to reduce the ability of Kansans to travel around the United States in an easy and affordable manner.

In the past 10 years, the governments of Qatar and the United Arab Emirates have injected their national carriers with over $50 billion in unfair and anti-competitive subsidies. This massive subsidization allows Qatar Airways, Etihad Airways, and Emirates to predatorily expand into America, dumping capacity and distorting the market. These unfair practices force U.S. carriers to abandon once-profitable routes, and every time they do so 1,500 American families lose the stable middle-class income that a career in the aviation industry provides.

While this issue may seem abstract and international, it has a direct effect on communities all across America — Kansas included. American carriers are able to operate smaller and less-profitable domestic routes thanks to the profitability of their long-haul international ones. Gulf trade cheating threatens many of those routes, and therefore directly impacts the availability and cost of routes in and out of Kansas.

 

The people of our state need to be able to get from city to city and state to state to conduct business, visit family, or just spend a few days away on a nice vacation. Gulf trade violations threatens our ability to do so.

President Trump has repeatedly expressed his support for the enforcement of our trade agreements and the removal of any agreement that takes advantage of American workers. The previous administration chose to ignore these job-killing violations in order to push other priorities, but Trump has made it clear that nothing is of higher priority than free and fair trade policies.

Kansas helped send the president to Washington expressly because we expected him to stand up for American workers, not foreign interests. He took a good first step on this issue a few months ago by negotiating an agreement with Qatar, but more enforcement action is necessary from the administration and Congress.

True enforcement of our aviation trade agreements will allow American carriers to build out further domestic and international routes, potentially increasing Kansas’ connectivity and providing more much-needed aviation jobs. However, if the Gulf carriers are allowed to continue their predatory subsidized activities, U.S. carriers will be forced to cut domestic routes to cover lost international revenue.

This will not only affect Kansans’ ability to travel around the United States in an affordable and time-effective manner, but will also cost well-paid and stable middle-class Kansas aviation jobs.

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Why Trump should enforce the Open Skies agreement

March 9, 2018 , , , , No comments

On the heels of the successful passage of President Trump’s tax reform that lowers taxes for tens of millions of America’s working families, the president is making the surprising move of pushing for a tax increase in the form of tariffs.

The president is proposing a 25 percent tariff on steel imports and a 10 percent tariff on aluminum imports – which may very well protect the 140,000 or so American jobs in those industries, but will also simultaneously damage up to 5 million American jobs that depend on steel and aluminum imports. Myopic protectionist schemes rarely help the overall workforce, and they almost always create price hikes for U.S. consumers.

Where tariffs are concerned, the economic costs far outweigh any potential benefit.

President Trump’s instinct here to protect American jobs is unassailable. But his proposed method of implementing protectionist tariffs will (if history is any guide here) backfire and lead to economic disruptions in U.S. manufacturing.

However, as long as the president has started the much-needed conversation about trade deals and protecting American workers, how about an agenda item that would enforce trade agreements in the United States’ favor and protect American workers? The Open Skies trade agreements provide exactly that opportunity.

The enforcement of our Open Skies agreements with the United Arab Emirates would accomplish everything President Trump is seeking to do with the steel tariff proposal, but without the negatives that necessarily result from protectionism.

President Trump has already scored a major victory in this area this year, and should be applauded for the steps he has taken to enforce our Open Skies agreements with other countries. The Open Skies agreements, which are bilateral trade agreements, govern international air travel and stipulate the conditions for fair and free trade in international air travel. The agreements specifically forbid governments from significantly subsidizing airlines because of the market distortions that result from government interference.Two of the most flagrant abusers of that particular provision of the Open Skies agreements have been Qatar and the United Arab Emirates, which have both pumped billions of dollars (upwards of $52 billion since 2004, in fact) into their state-owned airlines in an elaborate scheme to undercut international competition.

In the short term, this type of government-orchestrated market interference tilts the playing field in favor of the grossly subsidized airlines, making it difficult for other international airlines to fly certain routes. In the long term, however, the consequences are much more serious. U.S. airlines, unable to compete with oil-rich governments’ subsidized airlines, will be forced out of major international routes and could even be forced out of business.

The good news is that the Trump administration has been listening to Americans’ opposition to these violations of the Open Skies agreements. And, even more importantly, the Trump administration has taken swift action to enforce the Open Skies agreement.

Back in January, the Trump administration landed a big victory during the U.S.-Qatar Strategic Dialogue, when Qatar agreed to provide detailed and transparent financial records. Those financial records will enable the State Department and other U.S. agencies to evaluate possible violations of the Open Skies agreements.

Moving forward, the Trump administration should insist that the United Arab Emirates submit to the same transparency standards that Qatar recently agreed to implement. That would mean, at a minimum, the full release of its financial records, in accordance with internationally recognized accounting standards.

Fully 10 million U.S. jobs and $1.5 trillion in nationwide economic activity depend on our nation’s airline industry. The enforcement of all of the Open Skies agreements provides a platform for President Trump to protect American workers and consumers, all while creating new economic opportunities.

Ensuring that other nations abide by the both the spirit and the letter of the agreements is critically important for protecting those millions of American jobs. President Trump’s success in January is the model his administration should replicate in its negotiations with the United Arab Emirates.

On the campaign trail, Donald Trump frequently promised to protect the U.S. economy by putting American workers first in policy-making decisions. His campaign message was refreshing for American workers who, all too often, are often overlooked in Washington, D.C.

By enforcing the Open Skies agreements, President Trump is putting into action his America-first campaign promise.

Orignally Posted on the Washington Times.

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Give Trump Credit As U.S. Airlines Gain In Trade Dispute With Mideast Airlines, Delta Exec Says

February 15, 2018 , , , No comments

A top Delta Air Lines executive says the U.S. airline industry is seeing gains in its effort to restrict the U.S. growth of three subsidized Middle East carriers, thanks largely to President Trump’s administration.

“We applaud the Trump administration,” said Peter Carter, Delta’s chief legal officer and executive vice president, in an interview. “It has moved mountains in understanding that these subsidies are contrary to Open Skies agreements and need to be addressed.”

Two weeks ago, the Qatari government agreed to annually provide audited financial information for Qatar Airways, a step that could lead to diminished state subsidies.  Qatar also said the carrier has no current plans to begin “Fifth Freedom” flights between third countries and the U.S.

Carter called the agreement “a major milestone from our perspective.”

“If [the Qataris] live up to what they said they will do, that will solve the issues,” he said. “If they are not using subsidies and have transparent financials, [Qatar Airways] becomes a full-fledged member of the international airline community, playing on a level playing field.”

U.S. government negotiators have moved on to talks with the government of the United Arab Emirates, seeking similar goals in what would appear to be a tougher setting. Dubai-based Emirates airline already serves New York from Athens and Milan, while Abu Dhabi-based Etihad Airways, struggling financially, depends heavily on subsidies.

“I would hope our government has the same kind of relationship with the UAE that it has with Qatar [and] and can do a deal that would require government-owned airlines to operate without benefit of a subsidy,” Carter said.

 

In the case of Emirates, Carter said, U.S. airlines do not envision halting the two fifth freedom flights serving Athens and Milan.

“We don’t anticipate anybody dropping anything,” he said. “Our government is not asking any other government to restrict what already exists. This is much more about the future, and in making sure that [Emirates’] huge order [aircraft] book isn’t used to expand fifth freedom flights, whether from Europe or Asia.”

As for Etihad, “I am not sure whether or not the nation of the UAE can justify two carriers of that size and scope,” Carter said. “It looks like Etihad has really existed solely as a result of the largesse of the UAE. Whether it could retool without those subsidies and try to only fly routes that have appropriate demand, I don’t know.

“When European airlines said no to state aid, a number flourished and a number had to shut down.” he said.

Carter spoke in behalf of the Partnership for Open & Fair Skies, a coalition that includes American, Delta, United and seven major airline labor unions and that lobbies for the U.S. to enforce Open Skies agreements with UAE and Qatar.

On Thursday, the partnership is scheduled to release a letter calling for an end to the Open Skies violation and signed by governors from 10 states, including four – Georgia, Michigan, Minnesota and Utah – that have Delta hubs. The letter, sent to Secretary of State Rex Tillerson and Secretary of Transportation Elaine Chao, notes that the Emirates, Etihad and Qatar have received more than $50 billion in government subsidies, in violation of the Open Skies agreements.

‘There’s a buzz out there that’s growing,” Carter said. “People understand that if these carriers are allowed to grow unfettered, it will have a major impact on U.S. airlines.”

The U.S. airline industry offers 19 daily departures to China, but only two daily United departures to India, a similarly sized country, partially because the Middle East carriers have built sizable market shares between the U.S. and India.

For its part, rather than compete with subsidized carriers, Delta ended Amsterdam-Mumbai service in March 2015 and Atlanta-Dubai service in February 2016, eliminating hundreds of employment opportunities in each case. Amsterdam is a hub for Delta joint venture partner KLM.

Carter said Trump “ran on the idea that we must enforce trade agreements to protect U.S. jobs, and this is a shovel ready violation of trade agreements that are being violated, hurting U.S. jobs.”

The Obama administration “did acknowledge that the subsidies were real, but for whatever reason, they were moving very slowly,” perhaps because the administration “was winding down and it is harder to get things done at the end of an administration,” he said.

Published on Forbes.

americans4fairskies2015Give Trump Credit As U.S. Airlines Gain In Trade Dispute With Mideast Airlines, Delta Exec Says
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Strong enforcement of Open Skies agreement with Qatar is good for the U.S.

February 14, 2018 , , , No comments

A few weeks ago, President Trump announced an agreement with Qatar that would protect 1.2 million American aviation industry jobs. This announcement shows that the new administration is serious about enforcing our Open Skies agreements and protecting Americans from unfair competition with nations like Qatar.

Transport Daily News has the story:

As part of the recent agreement between the U.S. and Qatar, the partnership said Qatar has committed to operate in a transparent manner by using internationally agreed upon accounting and auditing standards and applying commercial terms to all transactions.

“Qatar and the UAE have both engaged in dishonest accounting methods to distort and conceal the truth about the extent to which the governments have kept the three state-owned airlines afloat,” according to Jenny Beth Martin, president and co-founder of the Tea Party Patriots and the chairman of the Tea Party Patriots Citizens Fund, in an opinion piece published Feb. 9 in The Washington Times. “Thanks to President Trump’s persistence, Qatar is now committing for the first time to provide more transparency in its record-keeping.”

Martin also thinks the U.S.-Qatar agreement will benefit American workers, who have seen “their slipping importance and relevance in Washington as politicians have routinely prioritized Silicon Valley, Wall Street and other crony capitalist interests” over them, she wrote.

And in general, the agreement with Qatar is a win for free market supporters who think “winners and losers in the market should be determined through fair competition — not through heavy-handed government programs or massive government subsidies,” Martin wrote.

We are thrilled that President Trump has taken the initiative to enforce our trade agreement with Qatar to put America first and overturn trade deals that prioritize foreign trade cheaters over 1.2 million American jobs.

Published on Tea Party Patriots.
americans4fairskies2015Strong enforcement of Open Skies agreement with Qatar is good for the U.S.
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Open Skies agreement with Qatar foretells strong U.S. enforcement to protect airline industry

February 13, 2018 , , No comments

The Trump administration’s recently announced agreement with the State of Qatar promises marketplace protections for the 1.2 million American jobs that depend on a strong and stable U.S. aviation industry and indicates that the White House is serious about enforcing its Open Skies agreements.

“The Trump administration has demonstrated its commitment to enforcing our trade agreements and protecting American jobs from unfair competition through its recent agreement with Qatar,” James H. Burnley IV, one of the nation’s foremost authorities on transportation law and policy, told Transportation Today.

The agreement, announced Jan. 30 during a U.S. State Department event featuring Secretary of State Rex Tillerson and Secretary of Defense James Mattis as part of the U.S.-Qatar Strategic Dialogue, is “a set of understandings on civil aviation” aimed at ensuring healthy competition exists in the global aviation sector while maintaining the U.S. Open Skies framework, according to the State Department.

Since 1992, the United States has entered bilateral Open Skies trade agreements with 121 countries to foster airline industry growth and enable passengers to fly from the United States to almost anywhere around the globe, explained Burnley, who is chairman of the Eno Center for Transportation and a partner at the Washington, D.C., law offices of Venable LLP.

“The bilateral treaties were put in place to create an open marketplace where airlines could freely and fairly compete for travelers’ business on their products’ merits, free of market distortions,” wrote Burnley, who served as the U.S. Secretary of Transportation from 1987 to 1989, the Deputy Secretary of Transportation during 1983-1987, and as general counsel of the department in 1983, in a recent article for the Eno Center.

But two of the 121 agreements — which get negotiated by the State Department and the U.S. Department of Transportation — haven’t been working as intended, namely those with the United Arab Emirates (UAE) and Qatar.

The Partnership for Open & Fair Skies has documented more than $25 billion in subsidies that the government of Qatar has provided to its state-owned airline in violation of its Open Skies agreement with the United States. The partnership said it has been working with the U.S. government for almost three years to address the more than $50 billion in rule-breaking subsidies it says the Gulf carriers – the state-owned airlines Emirates, Etihad Airways and Qatar Airways – have received since 2004 from the UAE and Qatar.

Such government subsidies create an uneven playing field that U.S. carriers cannot fairly compete on, according to the airlines and industry stakeholders, and they threaten U.S. jobs supported by the aviation industry. If left unchecked, the Gulf carriers will continue to expand into the United States, putting at risk service to small and medium-sized communities around the country, stakeholders say.

“Fair and free trade is a cornerstone of our great country and essential to ensuring American economic strength and growth,” wrote Burnley, who is also a consultant for American Airlines, a member of the Partnership for Open & Fair Skies.

In fact, for every international route where a U.S. carrier cannot compete and is forced to cede the route to a subsidized Gulf carrier, over 1,500 American jobs are lost, according to the partnership, a coalition that along with American Airlines also includes Delta Air Lines and United Airlines, the Air Line Pilots Association, the Allied Pilots Association, the Southwest Airlines Pilots’ Association, the Association of Professional Flight Attendants, the Association of Flight Attendants-CWA, the Communications Workers of America, and the Airline Division of the International Brotherhood of Teamsters.

As part of the recent agreement between the U.S. and Qatar, the partnership said Qatar has committed to operate in a transparent manner by using internationally agreed upon accounting and auditing standards and applying commercial terms to all transactions.

“Qatar and the UAE have both engaged in dishonest accounting methods to distort and conceal the truth about the extent to which the governments have kept the three state-owned airlines afloat,” according to Jenny Beth Martin, president and co-founder of the Tea Party Patriots and the chairman of the Tea Party Patriots Citizens Fund, in an opinion piece published Feb. 9 in The Washington Times. “Thanks to President Trump’s persistence, Qatar is now committing for the first time to provide more transparency in its record-keeping.”

Martin also thinks the U.S.-Qatar agreement will benefit American workers, who have seen “their slipping importance and relevance in Washington as politicians have routinely prioritized Silicon Valley, Wall Street and other crony capitalist interests” over them, she wrote.

And in general, the agreement with Qatar is a win for free market supporters who think “winners and losers in the market should be determined through fair competition — not through heavy-handed government programs or massive government subsidies,” Martin wrote.

Additionally, under the U.S.-Qatar agreement, Qatar has promised not to introduce any “fifth freedom” passenger flights to the United States, which are flights coming from outside Doha carrying passengers to the United States, according to the Partnership for Open & Fair Skies.

This pact will balance competition for all U.S. carriers, said American Airlines Chairman and CEO Doug Parker in a statement, adding that the Trump administration’s actions “thoughtfully address the illegal subsidies received by Qatar Airways, … support American workers and closer to home, American Airlines’ 120,000 team members.”

Now the focus turns to enforcement of the U.S. Open Skies agreement with the UAE.

When Secretary of State Tillerson announced the U.S.-Qatar agreement last month, he said President Donald Trump “has made this matter a priority, and the outcome we achieved will ensure a level playing field in the global aviation market.”

Martin thinks “the UAE should view this announcement as a new era in treaty enforcement — one in which the United States takes seriously trade violations that disrupt the market and unfairly disadvantage U.S. workers.”

Moving forward, the Partnership for Open & Fair Skies said it intends to work with the Trump administration to ensure Qatar upholds its commitments. The coalition also said it looks forward to working with the Trump administration as it negotiates with the UAE to end its government subsidies to Emirates and Etihad Airways.

Burnley remains confident and told Transportation Today, “I am optimistic that the State Department will push hard to persuade the UAE to end its subsidies for Emirates and Etihad Airways in order to restore fair competition in the global airline industry.”

Published on Transportation Today.

americans4fairskies2015Open Skies agreement with Qatar foretells strong U.S. enforcement to protect airline industry
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US Open Skies Qatar Agreement Helps Make America Great Again

February 9, 2018 , , , No comments

From signing tax reform into law, to enforcing our immigration policies to, most recently, enforcing a key international trade agreement, President Trump has already made significant strides with his campaign pledge to “Make America Great Again.”

The slogan “Make America Great Again” was always much more than a catchy phrase for bumper stickers; it was the unifying theme that knit together all of Trump’s policy objectives. And, while making America great again benefits all Americans, there was one primary demographic group with whom the message especially resonated – American workers. American workers have witnessed their slipping importance and relevance in Washington as politicians have routinely prioritized Silicon Valley, Wall Street and other crony capitalist interests over the needs of America’s working families.

But all of that is changing with Mr. Trump in the White House.

Just last week, the president again demonstrated his commitment to America’s workers – this time with the announcement that the White House is requiring Qatar to live up to the terms of the Open Skies agreement.

During the U.S.-Qatar Strategic Dialogue in January, the Trump administration announced that Qatar has agreed to disclose its financials in a more detailed and transparent way than it has previously. Why does this matter? For years, the government of Qatar funneled billions of dollars in the form of subsidies to Qatar Airways in direct violation of the Open Skies agreement with the United States. The Open Skies agreement with Qatar – a bilateral trade deal allowing travel between the two countries – stipulated that neither government could distort the marketplace by providing mass subsidies. But that is exactly what Qatar did for more than a decade, pumping a shocking $25 billion into its state-owned airline.

Qatar has not been alone in its flagrant violation of the Open Skies agreement. The United Arab Emirates has also thumbed its nose at the agreements, choosing to subsidize its two state-owned airlines, Emirates and Etihad Airways.

The effects of this type of government subsidizing are catastrophic. In the short-term, these governments’ interference in the marketplace undercuts U.S. airlines and forces our airlines to compete not with other airlines, but with oil-rich governments – an unequal playing field, if ever there were one. In the long-run, this type of tampering with the marketplace would drive U.S. airlines out of business. American workers were right to be concerned about these violations of the trade agreements, which directly threaten the 1.2 million U.S. jobs that rely on a healthy aviation industry.

Qatar and the UAE have both engaged in dishonest accounting methods to distort and conceal the truth about the extent to which the governments have kept the three state-owned airlines afloat. Thanks to President Trump’s persistence, Qatar is now committing for the first time to provide more transparency in its record-keeping.

The Trump administration’s win with Qatar is a win for everyone who supports the free market and believes winners and losers in the market should be determined through fair competition – not through heavy-handed government programs or massive government subsidies.

The Trump administration’s agreement with Qatar means that one of the most heavily subsidized airline carriers in the world, Qatar Airways, will be forced to play by the rules – a welcome change, indeed.

Perhaps the best part of the new agreement with Qatar is the ripple effect it is likely to have with other countries – most notably the UAE. As Secretary of State Rex Tillerson said in announcing the agreement with Qatar: “The president has made this matter a priority, and the outcome we achieved will ensure a level playing field in the global aviation market.” The UAE should view this announcement as a new era in treaty enforcement – one in which the United States takes seriously trade violations that disrupt the market and unfairly disadvantage U.S. workers.

Previous administrations, especially the Obama administration, treated U.S. workers as mere afterthoughts in policy-making. It is encouraging that the Trump administration has put American workers’ needs front and center in policy decisions. Americans should take note of how Mr. Trump’s Make America Great Again agenda has already transformed U.S. policy-making.

And, for that matter, the United Arab Emirates might want to pay attention to that, too.

Originally found at: The Washington Times

americans4fairskies2015US Open Skies Qatar Agreement Helps Make America Great Again
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Progress with Qatar Sets Stage for UAE Negotiations 

January 31, 2018 , , , No comments

Americans for Fair Skies, and the tens of thousands of aviation workers who have spoken up in support of our effort, sends its sincere appreciation to President Trump and his Administration for taking meaningful action to end the illegal and anti-competitive subsidies provided by the State of Qatar to its state-owned airline, Qatar Airways.

Without government subsidization, Qatar Airways would have been insolvent a long time ago. No private investor would invest in a company with so much red ink on its books. In 2017 alone, Qatar Airways received nearly $500 million in illegal government subsidies from the State of Qatar. This is on top of the more than $26 billion (that’s “billion” with a “b”) in government subsidies that Qatar Airways has received since 2004. These massive subsidies are in direct violation of Qatar’s Open Skies aviation trade agreement with the United States. They allow the airline to engage in predatory seat dumping, distorting the international marketplace and force U.S. airlines that play by the rules to abandon once-profitable routes, costing Americans jobs.

Thankfully, President Trump has stepped up and said no more. As the President said in his State of the Union speech last night, “The era of economic surrender is totally over.”


As we wrote about earlier this week, the Trump Administration announced that it has entered into an agreement with the State of Qatar that cracks down on their aviation trade cheating. The agreement forces Qatar Airways to use internationally agreed upon accounting and auditing standards and apply commercial terms to all transactions. Additionally, the agreement will make sure Qatar Airways pays its share of what it costs to operate out of its international airport instead of allowing that tab to be picked up by its government owners.

This transparency will allow the U.S. government to ensure that Qatar Airways operates free from state-subsidization going forward, or, if they continue to cheat, be held accountable for their distortion of the marketplace. The successful negotiation by the Administration brings us one step closer to the level playing field that must exist in the international aviation industry. The U.S. must now hold Qatar accountable and enforce the terms of this agreement. A4FS will remain vigilant on behalf of American aviation workers and expose any foul play on Qatar’s end.

The Trump Administration has also received an important commitment that Qatar Airways will not introduce any 5th freedom passenger flights to the United States. This tactic, employed by other carriers around the world that are not subsidized, allows airlines to carry passengers between two nations without stopping in the airline’s home country. By ensuring that Qatar Airways will not operate 5th freedom routes into the United States, the Administration precludes the carrier from undercutting U.S. airlines and their employees in the competitive transatlantic market by artificially increasing seat capacity. These same guarantees must also be obtained from the United Arab Emirates.

The UAE’s two largest international carriers, Emirates and Etihad Airways, are also massively subsidized by their state owners. This illegal and unfair reality should be likewise exposed and brought to a close. Emirates, an airline fueled by subsidies from the Dubai government, currently flies subsidized 5th Freedom routes from Europe to the U.S., distorting the marketplace and depriving U.S. airlines and their workers of the right to compete on fair and equal terms. Future negotiations by the Trump Administration should bring transparency to the UAE subsidies and address related party transactions between the airlines and other government owned entities. We anticipate the same leadership that the Trump Administration showed in its negotiations with Qatar to be exercised in its dealings with the UAE.

The UAE’s two largest international carriers, Emirates and Etihad Airways, are also massively subsidized by their state owners. This illegal and unfair reality should be likewise exposed and brought to a close. Emirates, an airline fueled by subsidies from the Dubai government, currently flies subsidized 5th Freedom routes from Europe to the U.S., distorting the marketplace and depriving U.S. airlines and their workers of the right to compete on fair and equal terms. Future negotiations by the Trump Administration should bring transparency to the UAE subsidies and address related party transactions between the airlines and other government owned entities. We anticipate the same leadership that the Trump Administration showed in its negotiations with Qatar to be exercised in its dealings with the UAE.​

Join us in thanking President Trump for his leadership on trade enforcement and for standing up for U.S. workers by putting an end to Qatar’s illegal aviation subsidies.

americans4fairskies2015Progress with Qatar Sets Stage for UAE Negotiations 
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Delta eyes return to Persian Gulf region after US strikes deal with Qatar

January 31, 2018 , No comments

Almost two years after ending flights between Atlanta and Dubai, the CEO of Delta Air Lines says it may be time to return to the Persian Gulf countries.

Ed Bastian told CNBC it’s too soon to predict when resuming flights to parts of the region might happen, but he says it’s a possibility now that the U.S. has negotiated an agreement with the government Qatar that should limit subsidies for Qatar Airways.

“We need to have a presence in the Middle East. We need to have a presence in India and other parts of Southeast Asia, which we have been run out,” Bastian told CNBC. “By shining a light on the scope of the subsidies and providing transparency, it is going to allow us all to make long-term investment decisions to go into markets knowing that our government is standing behind us.”

Delta, along with American Airlines and United Airlines, have complained for years about the expansion of Qatar Airways, Abu Dhabi-based Etihad Airways and Dubai-based Emirates. The U.S. carriers have said the Persian Gulf airlines are able to undercut competitors and offer flights to the Middle East and elsewhere thanks to an estimated $52 billion in government subsidies. It’s an allegation the Gulf airlines vehemently deny.

So what’s changed?

In February of last year, the U.S. airline CEOs met with President Donald Trump at the White House and asked him to push Middle Eastern carriers to comply with Open Skies agreements designed to ensure all airlines compete on a level playing field. Since that meeting, the State Department, which negotiates Open Skies agreements, has been talking with Qatar government leaders.

“The President has made this matter a priority,” said Rex Tillerson, U.S. Secretary of State. “The outcome we achieved will ensure a level playing field in the global aviation market.”

Next up for Tillerson are talks with Etihad Airways and Emirates. If the State Department can reach a similar agreement, Delta may be ready to once again fly to the region. (Delta already offers service to Israel.)

“While we appreciate the work done with the Qataris, there is another big area that needs focus, which is the UAE and specifically Emirates and Etihad,” said Bastian. “I know those negotiations are starting and we hope the consultations reach a similar conclusion.”

Originally found at: CNBC

americans4fairskies2015Delta eyes return to Persian Gulf region after US strikes deal with Qatar
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As Trump Moves Towards Open Skies Enforcement, ME3 Attacks Airline Employees

January 10, 2018 , , No comments

As we’ve explained before, those who are against enforcing Open Skies trade agreements know that they are on the wrong side of the facts. Theharm resulting from the seat dumping by Emirates, Etihad and Qatar Airways (ME3), fueled by more than $52 billion in subsidies from their government owners, is real. The subsidies are proven. And because of the strength of our case, opponents of Open Skies enforcement are desperate to change the story, misdirect, and muddy the narrative around what is really happening as a result of the subsidies undermining Open Skies.

One such desperate tactic has been to attack U.S. airlines and their employees. This approach is not only undignified, it is dishonest. It’s become the go-to approach for  a number of groups opposing Open Skies enforcement on behalf of the ME3, including the ironically named U.S. Travel Association, which represents the United Arab Emirates’ state-owned Emirates and Etihad, but no U.S. airlines, and the so-called Business Travel Coalition, a for-profit entity with a history of misrepresenting its membership and seemingly run by a sole individual.

U.S. international airlines and their employees are investing in improving customer service and customers are seeing the results. Further, U.S. airlines are partnering with President Trump to keep U.S. aviation at the forefront of global aviation. This partnership will result in more American jobs, world-class U.S. airports, and unparalleled global connectivity that will support the economic growth of the United States.

It was recently announced by Flight Global, an aviation technology and data service company, that Delta Airlines was the “world’s most on-time airline.” Remarkably, Delta’s on-time arrival rate was nearly 86%. Impressive by any standard, but particularly for a global airline of Delta’s size. The announcement is a testament to the hard work of Delta’s more than 80,000 employees, who are putting customers and safety first.

American Airlines and United Airlines are similarly disproving the rhetoric of opponents of Open Skies enforcement with continued customer-service investments and enhancements. United has recently launched a number of new domestic routes connecting smaller airports with its larger hubs. These domestic routes are dependent on feed traffic from international routes that flow through the hub airports. Without international traffic, domestic traffic, especially to smaller airports typically in rural areas, falls off. American Airlines recently gave each of its non-executive employees a bonus as a result of the federal tax code overhaul, an investment in its employees that will result in improved customer service.

All three airlines are actively working to improve the entire customer experience through investments in technology, onboard services, food, and amenities, and airport infrastructure.

In another example of Delta’s employee’s superior customer service, in November of last year, over the demanding Thanksgiving travel period, Delta flew the entire month with no mainline cancellations, setting a company record. Gil West, Delta’s Chief Operating Officer stated, “Our employees are steadfastly committed to delivering on Delta’s promise to be a safe and reliable airline and we’re proud of the progress we’ve made to offer our customers an industry-leading global operation.”

Despite the efforts of Open Skies opponents to build a false narrative aimed at distorting the facts to the contrary, U.S. airline employees are delivering for customers like never before, and customers are benefiting from safe and reliable service. As U.S. airlines continue to invest in their customers through innovation and employees investments, raising the standards for air travel, it is a win-win for travelers and airline employees.

All of these gains, however, are at risk by the predatory practices of the UAE and State of Qatar and their government airlines. If we are going to ensure that U.S. and global travelers can continue to count on a reliable air transportation network, it is imperative the rules governing international aviation are enforced.

The Trump Administration has taken initial steps towards  enforcing the Open Skies agreements with the UAE and State of Qatar, and is to be commended for leadership on trade enforcement. In 2018, we are confident that further progress on Open Skies enforcement will be made, which will help restore market balance, safeguard U.S. jobs, and protect the integrity of the 100+ Open Skies agreements with other nations that are not being violated.

americans4fairskies2015As Trump Moves Towards Open Skies Enforcement, ME3 Attacks Airline Employees
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Newt Gingrich: Trump should enforce our free trade agreement on air travel

December 2, 2017 , , , , No comments

Experience shows that letting markets, rather than politics, dictate economic activity creates more value for consumers and frees up capital that ultimately leads to more jobs.

This is why I have actively supported free trade and other agreements that remove government barriers and entanglements to international commerce throughout my career.

For open markets to work as intended, however, all parties need to be operating on the same, level playing field. One of the biggest challenges advocates of free trade must confront in the 21st century is the growing number of countries using nation-state resources – often in violation of trade deals – to give their state-owned companies huge advantages.

In these cases, international competition does not create the greater efficiencies, innovation, and new demand for services that leads to a growing economy for all. Instead, since the unsubsidized competition cannot possibly compete, it leads to a hemorrhaging of jobs and wealth in the countries that do not cheat, as well as fewer options for consumers.

The emergence of this highly aggressive form of state-sponsored capitalism provides a test for the United States and for advocates of unencumbered international economic activity: Are we willing to stand up for American workers? Are we willing to enforce our trade deals?

The United States faces a perfect test case when it comes to our Open Skies agreements with the United Arab Emirates and Qatar.

Open Skies agreements allow airlines, rather than governments, to make decisions about international routes, pricing, and capacity. The goal is to allow market demand rather than politics to drive these decisions, which saves customers money.

The United States has more than 100 of these agreements, and they have been a huge success. Estimates show that Open Skies agreements save passengers approximately $4 billion per year on U.S.-international routes.

However, for these agreements to be mutually beneficial, the airlines in all participating countries must be operating under the same rules. In the case of the United Arab Emirates and Qatar, this is clearly not the case.

A report submitted to the U.S. government by a coalition of the three major U.S. airlines and several airline worker unions shows that between 2004 and 2014, the governments of the UAE and Qatar have provided over $40 billion in subsidies and benefits to their state-owned airlines: Emirates, Etihad Airways, and Qatar Airways. Updated analysis by the coalition shows that since 2014, the total subsidy has passed $50 billion.

U.S. airlines have competed against state-owned airlines for decades, but these massive subsidies are unprecedented. The Gulf carriers are using this almost limitless government funding to open new routes without considering consumer demand, and thanks to the subsidies they receive, can afford to hemorrhage money until their unsubsidized competitors have no choice but to end their service. The coalition’s analysis shows that every route closure leads to a net loss of 1,500 U.S. jobs.

Why would the Gulf governments do this? Because the two nations’ larger economic development strategies depend on making themselves major airline hubs. Therefore, they are willing to let their state-owned airlines lose money to serve their broader, long-term goals.

This is a direct violation of our Open Skies agreements, which require parties to ensure “fair and equal” opportunities to compete. As the report shows, the Gulf carriers are operating hundreds of millions of dollars in the red every year, while at the same time rapidly expanding routes and capacity. They are not creating new demand for routes. They are only driving out the competition who cannot afford to operate at a loss. The Gulf carriers couldn’t do this without the more than $50 billion in subsidies they have received over the past decade. This is the opposite of fair competition.

One might be tempted to dismiss the findings of this study because it was funded by the United States’ three major legacy carriers, but other developed nations such as Canada, Japan, and China – as well as the EU – have come to the same conclusion and have already taken steps to equalize the economic playing field with the Gulf carriers. It is clearly time for the United States to follow suit.

Our Open Skies agreements allow the State Department to request immediate consultations with partner countries to address grievances. We should do so immediately. If we are refused, the Trump administration should announce it is freezing the addition of new routes from the Gulf carriers to the United States until UAE and Qatar come to the table.

Those opposed to enforcing our Open Skies agreements with Qatar and UAE argue that doing so would invite scrutiny of alleged subsidies that U.S. carriers receive, and undermine Open Skies agreements with other countries.

This is a smokescreen. There is no comparison between the tens of billions of dollars in subsidies that the Gulf carriers receive with the small advantages U.S. carriers have, such as relatively liberal bankruptcy laws and the partial reimbursements they received from the government after it decided to ground flights in response to the 9/11 attacks.

If free and fair trade is to continue to expand in the 21st century, those of us who advocate robust international commerce free of government interference must be willing to stand up for U.S. workers when other countries are not playing by the rules.

In short, supporting free trade requires enforcing free trade agreements. All Americans should demand that the U.S. government acts to enforce its Open Skies agreement with UAE and Qatar.

Newt Gingrich is former Republican speaker of the U.S. House and a former candidate for president.

americans4fairskies2015Newt Gingrich: Trump should enforce our free trade agreement on air travel
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