U.S. Travel Association Again Takes Side of Gulf Carriers in Open Skies Debate

Citing competition and economic concerns, the U.S. Travel Association, which isn’t renowned for picking a fight, came out strongly against the efforts of Delta, United and American airlines and their unions to the restrict activities of the Gulf carriers in the U.S.

In his “Response to Airline Unions on Open Skies,” U.S. Travel Association CEO Roger Dow stated: “We wish we did not have to stand apart from our friends in the airline industry on this or any other issue. But with their efforts to reduce competition in the aviation marketplace having become so aggressive — and the negative impact of these policies upon consumers so abundantly clear — we simply cannot sit idly by.”

Dow’s comments grew out of a meeting that the U.S. Travel Association conducted March 19 on the Open Skies issue, which has the three U.S. airlines and their unions pointing to allegedly unfair competition from Emirates, Etihad, and Qatar airlines because of $42 billion in governmental or quasi-governmental subsidies.

This is the second time USTA has spoken out in opposition of the U.S. airlines’ Open Skies moves. In February, Roger Dow said, “to abrogate Open Skies would fly in the face of competition and consumer choice, and ultimately harm demand for travel to the U.S.”

Today Dow said, “We are heartened and relieved to hear that airline unions share our priorities: U.S. economic growth and job creation. We wish that choice and comfort for travelers were as much a part of their equation, but alas.”

“Unfortunately, having carefully scrutinized the Big Three airlines’ and their unions’ recent position on Open Skies, we arrive at a diametrically opposite conclusion: contravening these open and transparent agreements that were negotiated in good faith holds dire consequences for sustaining the U.S. economic recovery and recent encouraging job growth. I say this on behalf of the industry that has restored jobs 33 percent faster than the rest of the economy since the ’07-’08 downturn, and is now responsible for 10 percent of all U.S. exports — partially thanks to Open Skies.”

Rather than hurting the U.S. economy, the U.S. Travel Association argues that increased flights and seat capacity generated by Open Skies has contributed to the growth of U.S. inbound tourism, which saw 74 million international visitors coming to the U.S. in 2014.

Prior to the meeting, a statement from the Air Line Pilots Association, the airline division of the International Brotherhood of Teamsters, the Association of Flight Attendants, the Association of Professional Flight Attendants and the Communications Workers of America urged the U.S. Travel Association to reconsider its “shortsighted view of the Gulf carriers issue.”

Contrary to the benefits that the U.S. Travel Association points to as resulting from Open Skies, the unions cited job and economic losses triggered by unfair competition from the three Gulf carriers.

“The Gulf carriers claim that their subsidized expansion into the U.S. market is delivering economic benefits to the U.S. but the truth is that every roundtrip international flight that is lost to the Gulf airlines results in a net loss of more than 800 U.S. jobs. Furthermore, if U.S. carriers are pushed off of international routes, they’ll be forced to cut back on domestic routes to small and mid-sized communities too, cutting off millions of businesses and leisure travelers from the networks that connect them to destinations across the world. The Gulf nations’ subsidies are threatening a legacy and a service that our members are proud to provide the American public.”

The Statement of U.S. Travel Association CEO Roger Dow

“We are heartened and relieved to hear that airline unions share our priorities: U.S. economic growth and job creation. We wish that choice and comfort for travelers were as much a part of their equation, but alas.

“Unfortunately, having carefully scrutinized the Big Three airlines’ and their unions’ recent position on Open Skies, we arrive at a diametrically opposite conclusion: contravening these open and transparent agreements that were negotiated in good faith holds dire consequences for sustaining the U.S. economic recovery and recent encouraging job growth. I say this on behalf of the industry that has restored jobs 33 percent faster than the rest of the economy since the ’07-’08 downturn, and is now responsible for 10 percent of all U.S. exports — partially thanks to Open Skies.

“We wish we did not have to stand apart from our friends in the airline industry on this or any other issue. But with their efforts to reduce competition in the aviation marketplace having become so aggressive — and the negative impact of these policies upon consumers so abundantly clear—we simply cannot sit idly by.”

Airline Unions’ Joint Statement

“As the CEOs of major American companies take part in a U.S. Travel Association roundtable today, we urge them to consider the very serious economic threat that heavily subsidized competition by government-owned airlines from Qatar and the United Arab Emirates poses to the U.S. and we call on Roger Dow, President and CEO of the U.S. Travel Association, to recognize the thousands of U.S. jobs he is putting at risk with a shortsighted view of the Gulf carriers issue.

“We joined the Partnership for Open & Fair Skies because we know that the unfair competition by the Gulf carriers is jeopardizing American jobs and the U.S. economy. And it’s not just airline employees who will pay the price if the unfair competition is allowed to continue: The U.S. airline industry drives more than $1.4 trillion in U.S. economic activity and more than 11 million U.S. jobs.

“The Gulf carriers claim that their subsidized expansion into the U.S. market is delivering economic benefits to the U.S. but the truth is that every roundtrip international flight that is lost to the Gulf airlines results in a net loss of more than 800 U.S. jobs. Furthermore, if U.S. carriers are pushed off of international routes, they’ll be forced to cut back on domestic routes to small and mid-sized communities too, cutting off millions of businesses and leisure travelers from the networks that connect them to destinations across the world. The Gulf nations’ subsidies are threatening a legacy and a service that our members are proud to provide the American public.

“Open Skies agreements only work if the parties play by the rules. Two of the more than one hundred countries that have signed Open Skies agreements, however, are not playing by the rules. That is why we are asking the U.S. government to open consultations with Qatar and UAE and to seek a freeze on new Gulf carrier capacity while those talks take place. Failure to address the massive, multi-billion dollar subsidies that Qatar and the UAE are providing to their state-owned airlines would irreparably harm U.S. consumers and businesses alike in the long run.

“This week, Etihad CEO James Hogan said that this issue is best left to our governments. We agree, and urge the U.S. government to open consultations swiftly. It is too important to our economy, our jobs and families, and the future of our aviation industry.”