Here's a prediction. The Trump administration may do little on the Open Skies debate. Yes, U.S. airlines probably suffer because of the agreements with Qatar and the United Arab Emirates. But plenty of other U.S. interests take advantage of the same agreements to make money.
In a bid to reach President Trump through his favored medium, a trade group representing four influential travel and transportation brands is buying cable TV ads asking the president to retain U.S. Open Skies agreements with all countries, including Qatar and the United Arab Emirates, telling him he must protect American jobs.
The new advertisement, running this week on Fox News and MSNBC, comes from the U.S. Airlines For Open Skies coalition, a group funded by Hawaiian Airlines, JetBlue Airways, Federal Express and Atlas Air Worldwide Holdings. All four companies benefit from Open Skies agreements in the Middle East and elsewhere— and they claim their employees do, too.
“American Airlines, United and Delta want President Trump to limit competition, jeopardizing Open Skies agreements and millions of American jobs they help support ” the ad’s narrator says. “Mr. President, reject these demands. Protect our jobs. Protect our small business exporters. And protect America’s Open Skies agreements.”
American, Delta and United support most of the more than 120 Open Skies agreements the U.S. has signed with other governments. But they object to deals with Qatar and the United Arab Emirates, arguing their national airlines — Qatar Airways in Qatar and Etihad Airways and Emirates Airline in the UAE — take massive government subsidies. The three U.S. airlines say Gulf airlines must be stopped from future U.S. expansion, or jobs someday will disappear as American carriers retrench.
Open Skies agreements have been around since 1992 and permit all airlines to start any route between the two countries covered by them — no special approval required. That has allowed Emirates, Etihad and Qatar Airways to grow quickly in the United States, and American, United and Delta say that’s hurting their businesses.
One major problem, they say, is how Gulf airlines undercut them by offering cheap fares on one-stop itineraries from the United States to India. Among the three U.S. airlines, only United still flies to India.
But the four U.S. companies paying for the new cable commericial benefit from the same agreements with Qatar and the United Arab Emirates that United, Delta and American criticize.
Fedex and Atlas rely on them to move freight seamlessly through the Middle East — Fedex even has a hub in Dubai — and JetBlue has significant commericial partnerships with Gulf airlines. Every day, many Emirates passengers land in New York and Boston and hop on a JetBlue flight to another U.S. city.
Hawaiian has fewer commericial relationships with the Middle East carriers, but it relies on Open Skies agreements elsewhere — similar ones allow Hawaiian to fly anywhere in Japan and Australia — and it does not want the U.S. government renegotiating them.
Delta’s Video for Employees
The new ad is yet another chapter in the public spat between the two sides in the Open Skies debate. It comes two weeks after Delta released a slick 15-minute video for its employees criticizing the Gulf carriers.
The Delta-produced video accused the governments of Qatar and the United Arab Emirates — “two countries the size of South Carolina” — for giving their airlines roughly $50 billion in subsidies over the past decade, allowing them to lower ticket prices to unnatural levels. The carriers, a narrator said, “are unfairly crushing competition.”
The Delta video also makes an attempt to influence the Trump administration, reminding viewers Trump promised to protect American jobs during the campaign.
“President Trump came into office saying he was going to enforce our trade agreements in a vigorous way using every aspect of leverage at his disposal,” Charlene Barshefsky, the U.S. Trade Representative from 1997 to 2001 said in the Delta video. “This is the test case.”
Photo credit: Fedex relies on Open Skies agreements with the United Arab Emirates to operate a logistics hub in Dubai. Pictured is a Fedex Boeing 777. FedEx / Federal Express