U.S. Open Skies deals with UAE and Qatar is good, says business coalition
U.S. Open Skies agreements with the UAE and Qatar have delivered huge benefits to U.S. consumers, aerospace manufacturers, the travel and tourism industry and the economy writ large.
These pacts have proven to be an indispensable engine for U.S. manufacturing and tourism-related job creation. The two agreements have rewarded consumers with much-needed competitive choice while yielding vast increases in connectivity between the U.S. and destinations that U.S. airlines don’t serve.
At the same time they have enabled all-cargo carriers to establish global networks over which flow billions of dollars of exported U.S. products.
Delta Air Lines, United Airlines and American Airlines (Big Three), that are reaping record-setting profits, are seeking to undermine these agreements and are demanding that your Administration protect them from competition.
Importantly, the Big Three have used their considerable newfound financial and political clout from industry consolidation to bully Members of Congress into supporting them by petitioning you.
However, the Big Three do not speak for other U.S. airlines or the many other Open Skies stakeholders including organizations that annually purchase billions of dollars of airline travel.
Destinations that the Gulf Carriers serve from the U.S. over their Middle East hubs to points in Southeast Asia, the Indian subcontinent, Africa and the Middle East itself provide business travelers with more efficient and higher quality alternatives to connecting on Big Three alliance partners at Frankfort, Paris or London.
Given the competitive stranglehold the Big Three have over the transatlantic market, Gulf Carrier growth is not just welcomed, but critically important.
If not the Gulf Carriers, who would provide consumers with a meaningful competitive alternative to the Big Three-led oligopoly alliances?
Indeed, in a white paper regarding antitrust immunized airline alliances just published on March 28, the American Antitrust Institute (AAI) stated, A related issue is entry by non-allied foreign carriers on international routes that serve U.S. destinations.
These include Norwegian Air UK Limited and the Gulf Carriers (Qatar, Emirates, and Etihad). The large U.S. legacy carriers have vigorously opposed entry into U.S. markets by these carriers.
In parallel, domestic airlines are also expanding their stakes in foreign carriers. This is likely motivated by expansion opportunities abroad but also by gaining strategic control over foreign airlines’ decisions regarding expansion into U.S. markets.
In other words, as AAI noted, the Big Threes attack on Open Skies is but one battle in their broader anti-consumer campaign that seeks to eliminate competitive choice and force passengers to take inconveniently routed flights with multiple connections.
The Big Three, with their antitrust immunized alliance partners, are demanding that the Administration protect their enormous transatlantic profits from this sorely needed indirect Gulf Carrier competition.
However, if the U.S. caves to the Big Threes demands it would set a horrible precedent for other countries to follow were they to seek protection for their airlines from competition by U.S. carriers.
Open Skies agreements between countries around the world could easily unravel and the benefits to consumers, communities, cargo/shippers and the travel/tourism industry disappear.
Mr. President, for 25 years Americas pro-competition, pro-consumer, pro-growth Open Skies policy has proven itself to be the Made-in-America Gold Standard for international bilateral trade agreements.
Open Skies is a policy that serves the best interest of our country, and one that should not be jettisoned because the Big Three prefer to seek government protection rather than the more difficult work of improving their products and services and competing in the marketplace.
The best interest of the nation and all aviation stakeholders, not just self-pleading by the Big Three who are not satisfied with already record-setting profits, should guide U.S. international aviation policy." ■