Key US private sector leaders are backing Gulf carriers in an ongoing dispute over the Open Skies international aviation treaties by urging the Obama administration to resist a call from the biggest US airlines to make changes.
CEOs of Alaska Airlines, Hawaiian Airlines and JetBlue Airways are among those who are opposing the stance of industry partners American, Delta and United who are leading the charge to change the agreements amid growing concern about the growth of Gulf carriers in the United States.
Those leaders joined the heads of 21 other major corporations and industry associations on a letter sent by the US Travel Association to Secretaries John Kerry, Penny Pritzker and Anthony Foxx, the chiefs of the three Cabinet agencies hearing an appeal by the Big 3 airlines to break Open Skies agreements with two countries.
The Big Three have petitioned the US government for a “freeze” in air service for carriers hailing from the UAE and Qatar – notoriously strong competitors in terms of service and value – and a reevaluation of those Open Skies agreements.
They accuse Emirates, Etihad Airways and Qatar Airways of receiving more than $40 billion in subsidies and distorting competition, which is strongly denied by the carriers.
The Big Three’s documents also offer a blueprint for government regulation of the routes serviced by those carriers once their Open Skies agreements are terminated.
But US Travel said it has vehemently opposed changes to Open Skies on the grounds that such a move would “gravely harm airline competition, travellers and the overall US economy”.
“I wake up every morning alarmed and sad that the Big Three have staked out this position on Open Skies,” said US Travel president and CEO Roger Dow.
“Even if I tried hard I couldn’t think of a policy change that would be as utterly terrible for the economy, jobs and consumers. We’d rather be working with airlines to enhance the flying experience for travelers and get more people booking trips, but instead we have to spend time and energy opposing them on this self-interested maneuver that just makes no sense at all.
“I’d like to thank my fellow CEOs for speaking out in favour of Open Skies in the face of an incredibly aggressive arm-twisting campaign by the Big Three.”
In response, Jill Zuckman, chief spokesperson for the Partnership for Open & Fair Skies, said: “We agree with the US Travel Association that Open Skies agreements have benefited the United States and we stand behind these valuable policies.
“But when other countries aren’t abiding by their end of the deal, the US needs to stand up for its aviation industry and enforce the rules. In this case, Open Skies is clear – subsidies are a violation of the policy. The more than $42 billion in subsidies and unfair benefits provided by Qatar and the UAE to Qatar Airways, Etihad Airways and Emirates have been well documented, as has the fact that these airlines have created no new demand among passengers.
“US Travel blatantly ignores the Gulf carriers’ unfair tactics that simply shifts passengers away from US airlines thanks to their government subsidies. Unfortunately, it’s not surprising that US Travel is rushing to defend the state-owned Gulf carriers since the US hotel industry relies on Gulf state money for future growth and expansion in the Middle East. But that’s no excuse for distorting our position. Let’s set the record straight: we fully support a competitive and robust airline industry on a level playing field.”
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