The Truth About U.S. Airline “Subsidies”
Today, a pair of organizations that have closely aligned themselves with government-subsidized airlines from Qatar and the United Arab Emirates (UAE) have seized on a 16-year-old unpublished paper and egregiously misrepresented it in order to distract from the massive evidence that three Middle East carriers are heavily subsidized by their government treasuries.
We think it speaks volumes about the weakness of the Gulf carriers’ defense that their supporters would cite an unpublished paper from 1999. But we wanted to lay out the facts about the report itself and about the groups that are so blatantly mischaracterizing its findings.
The Business Travel Coalition is a paid advocacy group that recently launched the “OpenSkies.travel Resource Center,” whose founding members include the Dubai Travel & Tour Agents Group, the U.S.-UAE Business Council and TRS Consulting, a Dubai-based consulting firm. The U.S. Travel Association purports to represent U.S. travel interests but instead consistently rushes to the defense of state-owned Gulf carriers. The two groups have distributed a paper that examines all aviation-related government spending between 1918 (15 years after the Wright brothers built the first airplane) and 1998, and are claiming, inaccurately, that the study contains new evidence that U.S. airlines are government-subsidized.
The 16-year-old paper actually says that “the federal government has spent $155 billion in support of aviation activities” during an 80-year span. And federal expenditures are not the same thing as airline subsidies.
The vast majority of the support cited in the report is the government’s annual operating budgets for the Federal Aviation Administration (FAA) from 1958-1998, including money that went towards things like air traffic control towers. Calling funding for air traffic control towers a subsidy for commercial airlines is akin to calling paved roads and traffic lights a subsidy for the taxi industry. And, at any rate, taxes paid by the airlines are a major source of funding for FAA operations, a fact conveniently omitted by U.S. Travel and the BTC.
Other government funding documented in the paper includes money for things like Post Office Department airmail service from 1918-1928 and even National Weather Service forecasts.
The fact is, U.S. Travel and the BTC want to distort and distract from the real issue at hand: Qatar and the UAE have brazenly provided $42 billion in direct subsidies and other unfair state support to Qatar Airways, Etihad Airways and Emirates Airline over just the last decade. And that’s a fact that US Travel and the BTC can’t defend.