Supporters Of Current Open Skies Agreements Rebut Big Three
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In a sharply worded editorial, David Bronczek, Mark Dunkerley, William Flynn and Robin Hayes – the CEOs, respectively, of FedEx Express, Hawaiian Airlines Inc., Atlas Air Worldwide; and JetBlue Airways – called out the Big Three U.S. airlines’ stance on Open Skies.
Writing for The Hill, the politically focused Capitol Hill paper, the four CEOs said American, Delta and United airlines are being disingenuous in calling on the Obama administration to re-open Open Skies consultations with the governments of the United Arab Emirates and Qatar.
The Big Three submitted a 55-page white paper to the administration in January alleging that their Middle East counterparts – Emirates, Etihad and Qatar airlines – have received $42 billion in subsidies from their respective governments over a 14-year period.
American, Delta and United say that distorts the marketplace and are asking for the government to freeze new routes and open negotiations.
That’s not entirely true, the Little Four say.
“Ultimately, the Big 3 are not asking the U.S. government to enforce the rules as outlined in our agreements, they’re asking it to break the rules to limit competition,” the CEOs wrote. “If the Big 3 are successful, not only will they have cut off a major flow of foreign tourists, but they will have opened the United States up for retaliation in a way that could put at risk the savings and efficiencies that benefit U.S. travelers.”
The CEOs noted that the U.S. has more than 100 Open Skies agreements, including countries such as Germany, Japan, India, Colombia, and Ethiopia, which, they say, has resulted in more efficient and affordable air travel, which has spurred economic growth and job creation here in America.
The foursome wrote that Open Skies agreements generate $4 billion in annual savings for passengers on U.S.-international routes, according to Brookings Institution research, and could be even more.
“That same research estimates that another $4 billion in savings could be realized if the United States entered into more Open Skies agreements. Likewise, these agreements increase economic activity in local communities across the country,” the group wrote. “Not only do they help expand international air service to mid-sized U.S. cities, such as Las Vegas, Portland, and Memphis, but they also enable smaller airlines, such as JetBlue, to initiate new domestic routes, as the airline recently did between Boston and Detroit.”
The four CEOs said that asking the government to renege on its commitment to Open Skies violates the spirit and letter of these agreements by freezing the Gulf carriers' access to the U.S. market. However, they have failed to show that their allegations, even if assumed to be true, violate these agreements.
“If the Big 3 were more confident about their claims, they would have utilized the procedure established by the International Air Transportation Fair Competitive Practices Act (IATFCPA),” they wrote. “This procedure allows U.S. airlines to file complaints regarding unfair practices by foreign governments and airlines, which the Department of Transportation then investigates. The Big 3 likely were hoping that their demands would be decided in a political context rather than a thorough, evidence-based proceeding.”
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