On the Record
If this subsidized expansion continues, U.S. carriers will be forced off more international routes. As U.S. airlines move out of international skies, service to smaller communities will be impacted as well thousands of jobs. International flights drive significant demand for connecting service, and each long-haul, international flight operated by a U.S. carrier generates more than 800 jobs.
– Doug Parker, chairman and CEO of American Airlines Group; Laura Glading, president of the Association of Professional Flight Attendants; and Captain Keith Wilson, president of the Allied Pilots Association, 7/06/15
Open Skies policy demands a level playing field for U.S. airlines to have a fair and equal opportunity to compete. The massive subsidies that the Gulf carriers receive run directly counter to that goal.
The members of the LGBT business community that we represent support fair competition in the marketplace, as well as the fair treatment of individuals in the workplace. It’s time for the U.S. government to stand up for the American aviation industry and address the Gulf carrier subsidies that are creating an unequal playing field – and propping up airlines that have discriminatory employment practices that are damaging to the LGBT community.
Open Skies is an important part of U.S. transportation policy for all air carriers – passenger and cargo alike. Both Democratic and Republican Administrations have pursued and expanded Open Skies at a global level providing U.S. consumers, carriers, and airports with more choice and access to new international destinations. To that end, it is important to ensure that Open Skies agreements protect and enhance fair and open competition. In fact as a matter of policy, the U.S. government should proactively be working to ensure that where government owned or sponsored entities are operating in the competitive market place, that they act in such a way as to not distort competition.
Every American commercial airline lives and dies by the consumer market – not these three Gulf carriers. Instead, they’re born, sustained, and grown by their governments, enjoying the luxury of doing business in America, not out of economic necessity, but as a means of paralyzing the invisible hand that guides our free market.
If allowed to continue, this will lead to service cuts to both regional and international airports, as many domestic routes serve as feeders for larger, more profitable flights to international destinations, ultimately resulting in substantial job losses throughout the country in a variety of different sectors.
Without a level playing field, U.S. carriers could lose out on valuable international routes. In fact, it has been estimated that for every international round-trip flight lost or foregone by domestic carriers there is an average net loss of more than 800 American jobs. And because more than half of U.S. carriers’ long haul international passengers connect to a domestic flight at a U.S. carrier hub, discontinued or forgone routes have severe impact on domestic services.
While Open Skies promotes and even encourages competition, European markets have seen the devastating impact of this tactic. Now U.S. carriers are at risk, taking passengers from our airlines and threatening a critical industry and thousands of American jobs. If U.S. carriers are forced to cut back on international flights due to the unfair competition, jobs will be lost, service to MSP and airports in Greater Minnesota will be diminished, and much of the vital economic activity provided by the air travel industry will be in jeopardy.
Confronting massive subsidies and other competition-distorting practices by State-Owned Enterprises (SOEs) in other sectors of the U.S. economy has been a major policy priority of the U.S. government for many years. The aviation industry should be no exception. Foreign governments and their state-owned carriers that engage in practices that violate the spirit of liberalization and free competition should not be exempt from that policy.
If we stand by and allow this unfair competition to continue, the service to small and mid-sized communities that we depend on will suffer as our domestic airlines are forced to curtail flights.
But because of the suspect relationships between the government in U.A.E. and Emirates Airlines, this raises serious fair trade issues. If the trend continues, U.S. carriers will have to dump more than international flights. The other spokes in the network will be at risk, too, and places like Marquette or Alpena or Lansing — small communities whose air service operates on the thinnest of margins — would likely be hit hardest.
These government-owned Gulf carriers are not playing by the rules their governments agreed to when they signed Open Skies agreements with the U.S. … The evidence is too overwhelming and the airline industry is too important to our country for the U.S. government not to take action.
The U.S. carriers raise a valid concern. The Obama administration should move quickly to resolve this. If the Gulf States dawdle to avoid deliberations, a freeze of their airlines’ expansion into U.S. markets would get their attention.
Access to our skies must be equitable. Like any international accord, these agreements must be enforced. The Teamsters urge U.S. negotiators to revisit the Open Skies protocols with the countries that are receiving governmental support to ensure fairness. American workers can compete with anyone in the world when the playing field is level, but everyone has to play by the same rules.
Rather than gradually building a system to provide the benefits of a new technology to their citizens, the Mid-East governments in question rapidly spent billions of dollars to build three subsidized airlines and gigantic airports and to fill them with the world’s most expensive aircraft, following business models that involve taking advantage of treaties that never envisioned such a thing in order to siphon passengers from the world’s established airlines, which must make money to survive.
I can see first-hand the effects that an unfair playing field has on the U.S. carriers. The employees that depend on a healthy airline industry are not limited to airline workers; rental car employees, hotel, taxi and restaurant employees also depend on the influx of passengers through our region.
While oil-rich emirs subsidizing global air traffic might seem harmless, or even advantageous, their actions have serious consequences. America’s big three need international passengers to feed their domestic routes. Losses to Emirates, Etihad and Qatar translate to fewer flights and routes at home. This problem will grow as the Gulf carriers add flights on major routes linking American and European cities.
They’re state-owned companies, and they’re getting what we believe are infusions of cash, which is not fair.
– Cong. Bill Shuster, Chairman of the U.S. House Committee on Transportation and Infrastructure, 3/17/15
We will compete with any company, but we can’t compete with states.
– Carsten Spohr, Lufthansa CEO, 3/17/15
The United Arab Emirates and Qatar are ignoring the rules and channeling huge subsidies to carriers based in the Gulf, allowing them to cut fares below market rates and grab a greater share of passengers… The Obama administration can not allow the U.S. airline industry to be undermined by predatory, state-owned competitors.
It should demand that the Gulf states honor the Open Skies Agreements or risk losing access to U.S. airports.
Based on the analysis released last week, I am concerned that state subsidies and other special favors bestowed upon the ME3, combined with those carriers’ blatant disregard of fair labor practices, have created a particularly pernicious anti-competitive situation that adversely affects U.S. air carriers and their stakeholders, including the hundreds of thousands of U.S. airline employees who depend on the industry for stable, longterm employment.
First, the sheer scale of equity apparently being provided to the Gulf carriers dwarfs what any privately owned airline could hope to secure for start-up capital … the Gulf carriers enjoy clear financial advantages over their American and European rivals, affording them a safety net which permits them to operate unprofitable services in order to gain market share.
We believe these Gulf airlines are playing from the higher side of an uneven playing field, posing a serious threat to American jobs and the long-term viability of our nation’s carriers.
– Capt. Keith Wilson, Allied Pilots Association, 3/5/15
Flight attendants have worked hard to put our companies in a position to compete globally. I believe U.S. airlines can go toe-to-toe with any airline in the world but I do not think we can keep up with the governments of oil-rich Gulf nations. Something needs to change to ensure fair competition.
– Laura Glading, Association of Professional Flight Attendants, 3/5/15
When the United States created Open Skies agreements more than 30 years ago, they were built on the principle of fair competition in the marketplace. The economic disadvantages with which U.S. airlines currently do business in certain markets runs counter to the foundational premise of our Open Skies policy.
– Capt. Tim Canoll, Air Line Pilots Association, 3/5/15
These airlines aren’t playing by the rules. The U.S. government needs to take action on behalf of the hundreds of thousands of U.S. airline industry employees whose jobs will be in jeopardy if these unfair practices are allowed to continue.
– Capt. David Bourne, Airline Division Director, International Brotherhood of Teamsters, 3/5/15
Emirates, Etihad, and Qatar airlines aren’t playing fair. It’s one thing to have a government owned airline that’s losing money, but the behavior of the Middle Eastern airlines is destructive. Their long term business model is basically to run competing airlines out of markets as much as possible, and at any cost, even if they lose billions of dollars doing it.