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In the hot debate among the three major U.S. airlines' opposition to the growth of Middle East carriers, Delta Air Lines CEO Richard Anderson might have said the wrong thing on Monday.
Anderson, along with his counterparts from American and United, wants the U.S. government to amend or repeal the Open Skies Agreement. He was debating the point with CNN's Richard Quest on the show Quest Means Business when he uttered a statement that is being widely interpreted as making a comparison between the Gulf carriers and the terrorists responsible for the Sept. 11, 2001 attacks.
Quest said, "To the allegation that, well, you restructured under Chapter 11 (bankruptcy). The U.S. fleet certainly gains benefits from the civil defense fleet. American has just restructured. The argument is that you, in your own ways, have had your hand in the bailout trough."
Quest was referring to the dramatic financial difficulties domestic airlines endured as a result of 9/11, with all three major legacy carriers going into bankruptcy at some point following the tragedy.
Anderson quickly fired back.
"That is categorically false," the Delta CEO said. "And it's a great irony to have the UAE from the Arabian Peninsula talk about that, given the fact that our industry was really shocked by the terrorism of 9/11, which came from terrorists from the Arabian Peninsula. That caused us to go through a massive restructuring. And in the United States our restructuring process is transparent and there is no government subsidy. And in fact there were billions of dollars of equity and unsecured debt that were wiped out through that process."
Whoa.
If the argument wasn't red-hot before, it is now. Anderson and his two colleagues met two weeks ago 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 Middle East Gulf airlines Emirates, Etihad and Qatar.
Many in the travel industry have found the request by the U.S. airlines to be alarming, as U.S. Travel Association president and CEO Roger Dow called it.
"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."
Delta, American and United argue that they are no longer competing against the airlines themselves because the government subsidizes so much of the Gulf carriers.
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