The Business Travel Coalition and its sub-committee, OpenSkies.Travel, today sent a scathing letter to Obama administration officials, saying domestic airlines have declared war on the Open Skies Agreement and are looking to modify the 23-year old document.
The CEOs of American Airlines, Delta Air Lines and United Airlines – the three biggest U.S. carriers – met last week with Transportation Secretary Anthony Foxx, Commerce Secretary Penny Pritzker and other government leaders, seeking relief from the Open Skies Agreement.
The airlines are concerned about competition from foreign carriers that they believe either skirt labor laws, such as the allegations against Noregian Air, or are subsidized by their respective governments, such as some Middle East Gulf carriers.
By its own definition, the U.S. State Dept. defines Open Skies agreements between countries as “eliminating government interference in the commercial decisions of air carriers about routes, capacity, and pricing, freeing carriers to provide more affordable, convenient, and efficient air service for consumers.”
Kevin Mitchell, president of BTC, sent a letter to Secretary of State John Kerry, Transportation Secretary Anthony Foxx and Commerce Secretary Penny Pritzker saying that Open Skies is under attack from U.S airline CEOs who want the federal government “to institute draconian measures that would freeze out competition in international air service and undermine the decades-long advances resulting from the successful policy of Open Skies.”
The BTC was backed later in the day by U.S. Travel Association president and CEO Roger Dow.
"The U.S. travel community is alarmed and disappointed that anyone would give serious thought to tampering with 'Open Skies,' which has both made it easier and cheaper for American citizens to travel abroad and helped expand the lucrative inbound international travel market to the U.S.," he said. "No sane person would ever argue that U.S. businesses should not be as healthy and profitable as possible. But we believe any move to abrogate Open Skies would fly in the face of competition and consumer choice, and ultimately harm demand for travel to the U.S. We simply cannot see how that helps any domestic industry or the overall economy."
Mitchell also has support from JetBlue President Robin Hayes, who sent his own letter to the respective secretaries that was obtained by Aviation Week. Hayes said he has “unwavering support” for Open Skies.
“Similar to the domestic aviation landscape after deregulation, international services, traffic and economic activity have correspondingly grown since the United States began pursuing its open skies policy,” Hayes wrote, according to Aviation Week.
In his own letter, Mitchell wrote:
“With the support of the U.S. government, these carriers received antitrust immunity for their global alliances and achieved a radically consolidated domestic airline industry. The U.S. Open Skies policy model anticipated such an evolution of the U.S. competitive structure and was designed to ensure foreign and domestic carrier new entry and robust competition.
"Open Skies was thus carefully designed by policy makers as the needed antidote to replace the competition lost when two carriers that had previously competed against one another head-to-head combined to operate as one under an immunized global alliance. … Now that U.S. airlines have secured antitrust immunity, industry consolidation and concomitantly rising airfares and ancillary fees, and are achieving record unprecedented profits, some carriers shamelessly seek to close off U.S. markets to competition from foreign carriers.
"We appeal to you to reject this proposal, which would harm consumers, local economies and much needed middle-class job growth.”