Gulf Carriers’ Billions in Market-Distorting Subsidies Threaten Nearly 50,000 Texas Jobs

WASHINGTON, DC (July 31, 2017) – A bipartisan group of 29 Members of Congress from Texas sent a letter to Secretary of Commerce Wilbur Ross, Secretary of State Rex Tillerson and Secretary of Transportation Elaine Chao urging the U.S. government to enforce the United States’ Open Skies agreements with the United Arab Emirates (UAE) and Qatar. The Gulf nations are pumping over $50 billion in market-skewing subsidies into their state-owned airlines – Emirates, Etihad Airways and Qatar Airways – in violation of their agreements with the U.S. These subsidies pose a significant threat to the jobs of nearly 50,000 airline workers in Texas and to the 1.2 million Americans whose jobs rely on a strong aviation industry.

“The Texas economy is one of the largest in the world, with the aviation industry serving a vital role in the economic success of the state. The U.S. government should not continue to stand by while trade-cheating foreign governments continue to threaten the jobs of tens of thousands of Texans and 1.2 million American workers,” said Jill Zuckman, chief spokesperson for the Partnership for Open & Fair Skies. “We are grateful to the Texas congressional delegation for taking action to protect Texas jobs and for standing up for fair competition. The U.S. government needs to enforce our country’s Open Skies agreements and stop the trade cheating that threatens so many jobs in Texas and the rest of the United States.”

The letter was signed by U.S. Representatives Gene Green, Kenny Marchant, Joe Barton, Lamar Smith, Sam Johnson, Eddie Bernice Johnson, Lloyd Doggett, Sheila Jackson Lee, Mac Thornberry, Kevin Brady, Kay Granger, Pete Sessions, Michael C. Burgess, John Carter, Jeb Hensarling, Henry Cuellar, Al Green, Michael McCaul, Ted Poe, Pete Olson, Bill Flores, Joaquin Castro, Beto O’Rourke, Marc Veasey, Filemon Vela, Jr., Roger Williams, Brian Babin, John Ratcliffe and Vicente González. The letter from the Texas congressional delegation follows a recent letter from Senator Ted Cruz, and joins other bipartisan letters from the delegations of Illinois, Michigan, Georgia and Minnesota calling for the United States to enforce its Open Skies agreements with the UAE and Qatar. In addition, earlier this year 25 Members of Congress from New York and New Jersey, six U.S. Senators and leading political and business figures in Georgia, including Governor Nathan Deal, sent similar letters to Trump administration officials.

A full copy of the letter follows:

Dear Secretaries Tillerson, Chao and Ross:

In our home state of Texas, American Airlines, United Airlines, and Delta Air Lines collectively employ almost 50,000 workers. The positive economic impact of the domestic aviation industry is a key engine for our national economy. These industry-supported jobs are: stable, middle-class, well-paying, and in many instances, follow in the footsteps of other family members with a love for the aviation industry and serving the traveling public.

Many of these cherished jobs are under threat as a result of the anticompetitive practices of three subsidized Gulf air carriers: Etihad Airways, Emirates Airlines, and Qatar Airways.

The Governments of the United Arab Emirates (UAE) and Qatar have provided more than $50 billion in subsidies to their three flag carriers over the past 13 years. These subsidies have allowed their carriers to significantly increase capacity to the U.S. at the expense of our domestic airlines. Without action, this market distortion will only increase given the 500 combined current orders for wide-body aircraft ordered by the three Gulf carriers. Every time a domestic airline is forced off a long-haul route or foregoes launching a new long-haul route as a result of the subsidized Gulf carrier competition, roughly 1,500 American jobs are lost.

In addition to dramatically increasing their capacity to the U.S. from their home country hubs over the past four years, on October 1, 2013, the Gulf carriers launched their inaugural 5th freedom flight to the U.S., service that does not originate in either Qatar or the UAE. Emirates’ service between New York-Kennedy and Milan-Malpensa does not require passengers to purchase an onward ticket to Dubai. Most recently, Emirates has begun flying from Newark-Liberty to Athens, Greece. Without action by your respective agencies, the Gulf carriers are likely to start more U.S. to Europe flights. This is significant because European routes to and from the United States are some of the most important routes for U.S. carriers and are critical to the continued success of domestic hub networks, domestic airline profitability and domestic employment. Unlike the subsidized Gulf carriers, U.S. airlines serve smaller markets in our state, such as Amarillo, Beaumont, Killeen/Ft. Hood, Laredo, Lubbock, McAllen, and Midland/Odessa. Air service and economic development in small communities will be jeopardized if subsidized competition weakens the domestic airlines’ ability to maintain robust hubs in the Lone Star State.

President Donald Trump has repeatedly stated that the United States will not tolerate unfair, subsidized foreign competition. We appreciate your thorough review of the subsidized Gulf carriers, and especially their use of 5th freedom routes to the U.S. We urge you to take swift and resolute action against Gulf subsidies, enforce our trade agreements, and protect American jobs and the domestic economy. Thank you for your attention and assistance on this important matter.

Sincerely,

Hon. Gene Green
Hon. Kenny Marchant
Hon. Joe Barton
Hon. Lamar Smith
Hon. Sam Johnson
Hon. Eddie Bernice Johnson
Hon. Lloyd Doggett
Hon. Sheila Jackson Lee
Hon. Mac Thornberry
Hon. Kevin Brady
Hon. Kay Granger
Hon. Pete Sessions
Hon. Michael C. Burgess
Hon. John Carter
Hon. Jeb Hensarling
Hon. Henry Cuellar
Hon. Al Green
Hon. Michael McCaul
Hon. Ted Poe
Hon. Pete Olson
Hon. Bill Flores
Hon. Joaquin Castro
Hon. Beto O’Rourke
Hon. Marc Veasey
Hon. Filemon Vela, Jr.
Hon. Roger Williams
Hon. Brian Babin
Hon. John Ratcliffe
Hon. Vicente Gonzalez