Rich Thomaselli | June 30, 2016 5:08 PM ET
There’s Still No Clear-Cut Winner In Open Skies Dilemma
Congratulations, U.S. State Dept.!
You just made a murky, multi-billion dollar dilemma …. even murkier.
After more than 18 months, the Obama administration finally weighed in on The Great Debate between the three largest U.S.-based airlines – American, Delta and United – and their allegations that the governments of the United Arab Emirates and Qatar are financially backing Middle-East based Emirates, Etihad and Qatar airlines.
That kind of monetary support has distorted the international travel marketplace, the big three U.S. carriers say, circumventing the original intent and spirit of the Open Skies Agreements, which was to allow airlines the breadth and freedom to fly from city to city without government interference.
The State Dept. said last week … we’ll talk about it. Informally.
That’s a very benign answer to a complex problem.
American, Delta and United last year outlined a 55-page report of allegations for the U.S. government that they say proved the UAE and Qatar gave government subsidies to Emirates, Etihad and Qatar. The Gulf airlines have labeled the financial support as "loans" (likely stretching the truth a bit) and saying the real argument is that U.S. airlines can’t match them for quality and service (likely being spot on and touching a nerve with the legacy carriers).
What the U.S. big three wanted was official talks with the UAE and Qatar and for the administration to freeze any new routes into the United States by the Gulf airlines.
Some pundits have called the State Dept.’s decision a win for the U.S. carriers – they finally get their coveted "discussion" about Open Skies. Others have noted it is a win for the Gulf airlines – these upcoming talks do not appear to be official and there is no freeze on Emirates, Etihad and Qatar adding new U.S. routes.
I don’t think anybody won, and I don’t think we’re any further along today than we were last week, last month or last year.
Frankly, I wonder if the State Dept. is just going to let this play out even longer until it can dump the situation into the lap of the next administration, be it Democrat or Republican. To be fair, the government is walking a fine line here, careful not to run afoul of American labor and unions while still trying to encourage free and fair trade.
But this isn’t the answer, or at least not a definitive answer.
As I had written more than a year ago, this is about choice. This is about the big three U.S. carriers wanting to limit your choices and selections on international travel, much as the big three automakers would have loved to continue to limit choices to American-made car purchases only.
At some point, somebody is going to have to make a hard decision here. Somebody in authority is going to have to tell the U.S. carriers that they’re right, that the marketplace for international flights has been skewed, and that there will be serious repercussions for the Gulf airlines. Or, somebody in authority is going to have tell the big three that the counterparts from the Middle East can continue on, business as usual.
I’m just not sure you arrive at either of those conclusions with informal talks.
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