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Trump Presidency Could Alter Open Skies and Change Global Travel Marketplace
Photo courtesy Thinkstock
Did the shocking election of Donald Trump as the 45th President of the United States suddenly change the fortune of the debate over Open Skies Agreements?
If anything, expect Trump – who has railed against the international trade agreements entered into by the United States – to take a deeper dive into this than the Obama administration has.
Aside from airport infrastructure problems, Open Skies remains the biggest issue in aviation right now. For those of you unfamiliar, here’s the Reader’s Digest refresher course.
In January of 2015 the big three U.S. airlines – American, Delta and United – presented the government with a compelling 55-page white paper alleging that Middle East Gulf carriers Emirates, Etihad and Qatar have accepted $42 billion in subsidies from the governments of the United Arab Emirates and Qatar over a 14-year period.
These subsidies, the U.S. airlines say, go against the Open Skies agreements between the respective countries that allows for landing rights between two countries without government interference, and dramatically alters the landscape of international travel, disrupting fair competition for those lucrative routes and often costing American jobs, they claim. The Gulf airlines have refuted these claims.
The three U.S. airlines, as well as several aviation-related labor unions, are represented by the Partnership for Open and Fair Skies, which, today, regardless of political affiliation, must be breathing a sigh of relief. Where the Obama administration has made it clear in the last two months that its inaction on the issue means it has no intention of re-opening negotiations with the UAE and Qatar (even though it hosted a mini-summit with the two nations over the summer).
Trump, though, is different.
The Gulf airlines have made U.S. destinations their entire focus, adding more than two dozen new routes to America combined over the last two years. In some of those markets, passenger volume doesn’t support adding another flight – or two, or three. At worst, Trump’s suggestion that he would vet more closely the number of Muslims entering the U.S. certainly has raised the attention of Emirates, Etihad and Qatar airlines. At best, his views on trade would indicate that he would not be happy about the loss of American jobs at airports due to the influx of Gulf airline routes.
“In a future administration, candidly, this argument sells even stronger,” Delta Air Lines CEO Ed Bastian told Bloomberg News prior to the election. “With the rhetoric that’s going on about trade and the U.S. having been taken advantage of, I think there is a much bigger ear there than ever before. And we’re not going to stop. It’s clear that both campaigns, both (Bernie) Sanders’s campaign and the Trump campaign, has sparked a dialogue, a national dialogue that wasn’t happening a couple years ago.”
Proponents of the current Open Skies Agreements say any changes to freeze or limit foreign airlines from operating international travel into the U.S. would do the same thing that U.S. airlines are complaining about – distort the marketplace and changing the pricing structure. American, Delta and United feel they are being undercut now; opponents say without fair trade and the presence of the Gulf airlines, fares for global travel would skyrocket with no competition.
You can bet the Trump administration will take a long look at this and, most certainly, how the government awards its contracts. A highly disputed government employee travel contract between New York and Milan was awarded to JetBlue earlier this year, even though JetBlue doesn’t fly that route. Instead, its codeshare partner, Emirates, does, and all government employees doing business between the two cities must fly Emirates.
Bastian said in the Bloomberg story that he was confident that no matter who won, Clinton or Trump, that they would be receptive to the concerns of the Big Three.
Trump might be more than just receptive.
He might alter the landscape of international travel to and from the U.S.
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