U.S. Airlines Urge Government to Reform 'Open Skies' Treaties with Persian Gulf Nations
U.S. airlines remain up in arms surrounding claims that their rivals in the Persian Gulf are unfairly subsidized.
These companies allege the carriers benefit from unfair advantages like interest-free government loans, cheaper airport access and services including fuel and ground handling.
Last month, airline executives outlined the subsidies to officials at the Transportation, State and Commerce departments in hopes of reforming treaties known as "open skies" agreements with the Persian Gulf countries including the United Arab Emirates and Qatar.
According to Bart Jansen of USA Today, on Thursday, representatives of three major U.S. carriers, American, Delta and United held a press conference at the National Press Club in Washington, D.C. to detail how Gulf-based carriers Emirates, Etihad and Qatar have received as much as $42 billion in subsidies over the past decade.
The airlines and accompanying pilot and flight attendant unions added that the subsidies make it impossible for U.S. companies to compete for lucrative international travelers.
"The subsidies are obvious and they are massive," claims David Ross, counsel at WilmerHale formerly of the Senate Finance Committee and the U.S. Trade Representative. "We really are in the crosshairs."
"If this situation is allowed to continue, it will threaten our entire industry," said Capt. Rick Dominguez, executive administrator for the Air Line Pilots Association. "Nothing less than our careers are at stake."
Just how threatening is it?
Airlines representatives said that 800 jobs are lost for every route canceled because of unfair competition. "In the long term, this is going to be disastrous," said American's senior vice president for government affairs Will Ris.
Meanwhile, Andrea Newman, who holds the same title at Delta, says the airline is "confident they [U.S. Government] will do something."
Unfortunately for the major U.S. airlines, not everyone is buying into their argument, and some on the otherside have even fired back.
"Before claiming government support for international competitors, the Big 3 [US carriers] may first want to check their own balance sheets," said US-UAE Business Council president Danny Sebright via ATWOnline.com's Karen Walker.
"Since 2006, the Big 3 transferred billions of dollars of pension liabilities directly to Uncle Sam while leaving creditors holding the bag for billions more through multiple bankruptcies. They received billions in cash payments and guaranteed loans in a direct government bailout while enjoying the advantages of antitrust immunity to fix transatlantic fares with their European partners."
Sebright added that the U.S. airlines should "stop complaining and start competing."
The accused Gulf carriers have denied that they are subsidized on multiple ocassions, with Etihad issuing a statement this week saying it would comment after reviewing the U.S. airlines' report and subsequent claims.
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