Letters to Secretaries Tillerson and Chao Ask Administration to Defend Open Skies Policy by Stopping Treaty Violations

WASHINGTON, DC (April 27, 2017) – Today, bipartisan members of Michigan’s congressional delegation sent letters to Secretary of State Rex Tillerson and Secretary of Transportation Elaine Chao urging them to enforce America’s Open Skies agreements currently under attack from the United Arab Emirates (UAE) and Qatar. The letters were signed by Senators Stabenow and Peters, and Representatives Moolenaar, Lawrence, Conyers, Dingell, Upton, Huizenga, Kildee, Bergman, Bishop, Walberg, Levin, Trott and Mitchell.

“We’re thankful that Michigan’s delegation recognizes the serious threat of the Gulf carriers’ rule-breaking subsidies,” said Jill Zuckman, chief spokesperson for the Partnership for Open & Fair Skies. “Emirates, Etihad Airways and Qatar Airways have together received over $50 billion from their government owners, which fuel an expansion scheme that threatens 1.2 million hard-working Americans and the foundation of the international aviation industry. Just like Michigan’s delegation, the U.S. airlines and their workers strongly support Open Skies policy and call on the administration to defend the agreements’ integrity by standing up to trade cheating.”

Full copies of both letters appear below and are online here and here.

Dear Secretary Tillerson and Secretary Chao:

We are writing to share our concerns about unfair competition in the international air transport market that is harming U.S. airlines and American workers and violating U.S. trade agreements. We are particularly concerned about the impact this unfair competition will have on aviation jobs in the State of Michigan.

Since 2004, the Gulf nations of Qatar and the United Arab Emirates (UAE) have provided billions of dollars in subsidies to their state-owned airlines, Qatar Airways, Emirates Airline, and Etihad Airways. The subsidies are inconsistent with the countries’ bilateral Open Skies agreements with the United States and are denying American workers and U.S. airlines a fair and equal opportunity to compete. They are also inconsistent with U.S. open skies policy, which is designed to eliminate government market distortions, including subsidies.

The three Gulf carriers are using their subsidies to introduce excess capacity on international routes and take significant market share from U.S. airlines, at the expense of the U.S. airlines’ international networks and American jobs. For example, as a result of the subsidies, U.S. airlines have been forced to cancel all of their routes to Qatar and the UAE. By contrast, the Gulf carriers operate 35 flights per day to the United States.

In addition, the Gulf carriers are increasingly targeting routes between the United States and cities outside of their home countries. For example, Emirates currently offers a roundtrip flight between New York City and Milan, Italy that has caused major overcapacity between those two cities, at the expense of U.S. and European airlines. If additional subsidized routes continue to be added it will begin to negatively impact air service and employment at the Detroit Metropolitan and other airports in our state.

Open Skies agreements are an important part of U.S. aviation policy that provide consumers, airlines, and airports with more choice and access to international destinations. However, the agreements must be enforced so that the American workers and U.S. airlines who play by the rules have a level playing field to compete. We urge you to take firm action to enforce the Open Skies agreements with Qatar and the UAE and ensure that there is a fair and equal opportunity for U.S. airlines and aviation workers to compete.

Thank you for your consideration. We look forward to working with you on this important matter.

Sincerely,

Senator Debbie Stabenow
Senator Gary C. Peters

Dear Secretary Tillerson and Secretary Chao:

In the State of Michigan, commercial aviation sustains more than 36,000 jobs and drives more than $5.6 billion in economic activity. From Detroit to Grand Rapids to Marquette, our aviation system supports not only jobs in the industry but is the economic driver for communities across the state.

That is why we are deeply concerned about the potential impacts of the subsidies that the Governments of Qatar and the United Arab Emirates (UAE) have provided to their state-owned airlines. These subsidies give three state-owned carriers, Qatar Airways, Emirates Airline, and Etihad Airways – a stark competitive advantage at the expense of the U.S. airlines’ international networks and American jobs. Each long-haul route lost as a result of subsidized Gulf carrier competition costs more than 1,500 American jobs.

Since 2004, the Gulf nations of Qatar and the United Arab Emirates have provided over $50 billion in subsidies to their state-owned airlines, Qatar Airways, Emirates Airline, and Etihad Airways. The subsidies are inconsistent with the countries’ bilateral Open Skies agreements with the United States and are denying U.S. airlines a fair and equal opportunity to compete. They are also inconsistent with U.S. open skies policy, which is designed to eliminate government market distortions, including subsidies.

The Gulf carriers are increasingly targeting routes between the United States and cities outside of their home countries. Emirates recently launched a new nonstop flight between New York City and Athens, Greece that would not be viable without subsidies. If additional subsidized routes continue to be added it will begin to negatively impact air service and employment throughout our state.

We strongly support the U.S. Open Skies program and the negotiation of additional Open Skies agreements. However, the agreements must be enforced so that U.S. aviation workers have a level playing field. U.S. airlines and their employees should have a fair and equal opportunity to compete and we urge your immediate attention to this matter.

Thank you for your consideration of our views.

Sincerely,

Representative John R. Moolenaar
Representative Brenda L. Lawrence
Representative John Conyers Jr.
Representative Debbie Dingell
Representative Fred Upton
Representative Bill Huizenga
Representative Daniel T. Kildee
Representative Jack Bergman
Representative Mike Bishop
Representative Tim Walberg
Representative Sander M. Levin
Representative David A. Trott
Representative Paul Mitchell