It isn't often that you see the U.S. Travel Association calling out anyone, let alone the largest airlines in the U.S., but the Gulf carriers' subsidy issue has exposed deep differences about competition and the global travel industry.
Who is subsidizing the various coalitions lining up on either side of the debate over Open Skies agreements and the alleged $42 billion in governmental subsidies handed out to three Gulf carriers, Emirates, Etihad and Qatar?
Although U.S.-based coalitions on both sides of the argument talk a lot about fair or Open Skies, there isn’t an excess of candor on the ground about their financial backers.
Here’s a look at the coalitions and where things are headed:
In the case of OpenSkies.travel, founded by veteran business travel advocate Kevin Mitchell and his for-profit organization, the Business Travel Coalition of Radnor, Pennsylvania, there can sometimes be less than meets the eye.
OpenSkies.travel strenuously opposes the efforts by Delta, American, United and seven labor unions to get the U.S. government to intervene and rewrite Open Skies agreements, and thereby to stall the expansion of the Gulf carriers into the U.S.
Mitchell’s coalition seemingly hosts an impressive array of 56 founding members, ranging from FedEx and Lockheed Martin to large travel management companies, tourism boards and airports.
But of five entities listed as founding members that responded to inquiries from Skift, three indicated that they had no idea they had supposedly joined the coalition.
“Everyone I’ve been able to talk with about this is familiar with the coalition, but not with Purdue’s designation as a founding member,” says Brian Zink, associate director of editorial at Purdue University News. “As far as we are aware, we also have not received any communication from the coalition.”
Carmine Carpanzano, co-founder and CEO of nuTravel Technology Solutions, which is listed as founding member of OpenSkies.travel, likewise was surprised about the company’s inclusion. “We never really got involved, sorry,” Carpanzano says, adding that he never had a conversation with Mitchell about the coalition. “I have no idea why we would be listed as a founding member.”
Mitchell, though, says the university and technology company indeed are founding members. “Due to privacy considerations I cannot tell you the names of the executives who signed up but you can have the head of Human Resources of those organizations call me and I will tell them who the executives are. Then they can verify for you that their organizations signed on to be members of OpenSkies.travel.”
Likewise, a representative of a large travel management company, which is listed as a founding member of the coalition, says the company attended a coalition meeting to see what was going on but never joined.
One organization that did acknowledge being part of the OpenSkies.travel coalition is the Washington, D.C.-based U.S.-U.A.E. Business Council, which has a roster of its own founding members, including Emirates, Etihad, Boeing, other multinational corporations and Abu Dhabi governmental organizations, among others.
Danny Sebright, president of the U.S.-U.A.E. Business Council, says OpenSkies.travel asked the organization to become a founding member, and it did, although the council has not provided any money to the coalition. “Not a dime,” Sebright says.
Jill Zuckman, spokesperson for the Partnership for Open & Fair Skies, which is the Delta, American, United and union coalition that’s trying to see the U.S. government crack down on Gulf carrier subsidies, makes vague and unproven accusations that Mitchell’s Business Travel Coaltion and the U.S. Travel Association “are acting at the behest of funders friendly to the Middle East carriers and their governments, rather than in the best interests of American jobs, consumers and companies.”
If that were indeed true of the Business Travel Coalition’s OpenSkies.travel, the funding certainly wouldn’t be coming from the U.S.-U.A.E. Business Council, according to Sebright.
Mitchell says the coaltion’s funding comes from BTC revenue streams. “Revenue streams for BTC come from publishing, consulting, public speaking and membership dues,”: Mitchell says. “With regard to OpenSkies.travel there is no cost to join as a member. There are benefits and obligations associated with membership that are outlined on the BTC website. OpenSkies.travel members can sign up for one of several BTC memberships with financial obligations if they so choose, and some have.”
Sebright calls the U.S. airlines’ campaign against Gulf carrier subsidies “very disengenuous and short-sighted,” especially in light of the subsidies that U.S. carriers have received spanning decades.
“The airlines are trying to go to the heartland, to go to the base of America, and use these Arab-baiting and other tactics to get someone to freeze in place access to our market,” Sebright says.
U.S. Travel Association
Like the Business Travel Coaltion’s OpenSkies.travel, the U.S. Travel Association, a national non-profit membership organization of more than 2,000 corporations, tourism boards, and educational institutions, broke with the Big Three U.S. network airlines over the Open Skies debate. The U.S. Travel Association argues that Delta, American and United are trying to stifle competition to the detriment of U.S. travelers, jobs and economic growth.
Erik Hansen, senior director of domestic travel for the U.S. Travel Association, says he’s been in contact with the Business Travel Coalition for several things but the two organizations are not coordinating over the Open Skies issue.
The BTC hasn’t sought any funding on the Open Skies issue from the Open Travel Alliance, he says.
Hansen hinted that something may be in the works about establishing a larger and broader coalition of stakeholders “who care about this issue,” meaning Open Skies.
“We are just seeing three U.S. companies on the other side of it,” Hansen says, adding that a wide swath of U.S. stakeholders have an interest in backing the economic growth and job creation that Gulf carriers’ expansion stimulates.
Some critics of the Delta, American and United argue that they brought seven unions into their coalition as a way of lining up the Obama administration and congressional Democrats to oppose Gulf carrier subsidies and rewrite Open Skies agreements.
“it’s interesting to have the union voice brought intp this debate when the unions and airlines were hit the hardest when we saw all this consolidation, airline mergers and bankruptcies,” Hansen says.
Partnership for Open & Fair Skies
By all accounts, Delta spearheaded the formation of the Partnership for Open & Fair Skies and brought American and United into the fold, with the seven unions joining later.
The question of funding isn’t really a central issue for the Partnership for Open & Fair Skies as the three airlines all have lobbyists wandering around Capitol Hill anyway. The coalition has succeeded in getting the Obama administration to review the Gulf carriers’ subsidies in a public comment period that runs through May.
Some observers argue that the big three U.S. network airlines are winning the skirmish, and that this issue appears to be following the track of Norwegian Air’s stuck-in-limbo U.S. Department of Transportation application for a foreign air carrier license.
That, too, triggered vehement opposition from U.S. airlines and the U.S. Airline Pilots Association.
After calling out the Gulf carriers in March for allegedly receiving $42 billion in governmental or quasi-governmental subsidies, the coalition this week released a cache of documents that it says details the Gulf carriers’ financial dealings.
“What you see is what you get,”says the coalition’s Zuckman. “Our coalition is made up of three airlines and seven unions. There is no hidden agenda or money from foreign governments supporting our request to open consultations and freeze Gulf carrier flights at current levels until this issue is resolved.”
Americans For Fair Skies
While the Business Travel Coalition’s OpenSkies.travel and the U.S. Travel Association share a lot of views in their opposition to the Delta-United-American position on Open Skies and Gulf carrier subsidies, so, too, are the Partnership for Open & Fair Skies and Americans For Fair Skies making their own harmonious arguments.
Americans For Fair Skies is registered as a not-for-profit 501(c)(4) organization and is a project of the Moak Group, a public affairs advocacy group that’s headed by Captain Lee Moak. He is a former Delta pilot who served as president of the Airline Pilots Association through last year.
The Americans For Fair Skies website describes the organization as “a grassroots coalition established to restore fairness to our Open Skies policies. We are asking the U.S. government to take action on what has been established as the largest trade violation in history. We’re registered as a 501c(4), which means we’re overseen by a Board of Directors and funded by concerned contributors who believe that the Gulf subsidies are unfairly distorting the marketand costing American aviation workers their jobs.”
There are rumors that Delta, other airlines or ALPA could be providing funding to Americans For Fair Skies or might be Moak Group clients.
Asked on Twitter about Americans For Fair Skies’ funding, @fairskies tweeted: “@fairskies is financially supported by thousands of concerned citizens. We collect funds through our website!”
— Fair Skies (@fairskies) April 16, 2015
When @Skift asked @fairskies to break down what percentage of its funding comes from concerned citizens versus airlines and labor unions, the coalition did not reply.
Photo credit: A Delta Air Lines plane at JFK. Andrés Nieto Porras / flickr.com