US travel group defends Gulf airlines in Open Skies dispute

The US Travel Association and a number of key passenger and cargo airlines have argued changes to Open Skies agreements with the UAE and Qatar could cost US jobs and damage tourism in a meeting with secretary of state Rex Tillerson.

The meeting, which reportedly included FedEx president David Bronczek, JetBlue Airways CEO Robin Hayes and Airports Council International – North America CEO Kevin Burke, comes amid rising tensions between the Gulf airlines Emirates, Etihad and Qatar Airways and their US rivals.

American, Delta and United are actively lobbying the US government to end Open Skies deals with the UAE and Qatar through the Partnership for Open and Fair Skies, claiming the Gulf airlines have distorted competition and cost jobs by receiving more than $50bn in state subsidies.

The Gulf carriers deny the claims and say they support thousands of US jobs through new routes and vast orders from plane maker Boeing.

Read: Dubai’s Emirates supports over 100,000 jobs in the US – study

In a statement released following the meeting with Tillerson yesterday, US Travel president and CEO Roger Dow said the coalition of American businesses representing “millions of workers” stressed the importance of the country’s Open Skies deals.

“The US government’s Open Skies agreements — particularly those with the UAE and Qatar — create jobs across industry sectors and provide actual jobs for workers in real places,” he said.

“American jobs are created when new service is added and new visitors arrive, not hypothetical losses based in hype. To date, there’s been no demonstration of actual harm to US employment related to these new routes. Quite the opposite.”

Dow argued new connections to America from underserved regions “where practically no competition exists” should grow the market share of inbound travel “from those willing to provide it”.

He then went on to urge US airlines American, Delta and United to raise their concerns through the International Air Transportation Fair and Competitive Practices Act (IATFCPA), allowing a Department of Transportation investigation, rather than directly lobbying the government of Donald Trump.

“Breaking global treaties can’t be done without meeting a high bar that has stalled before actual damage has been demonstrated,” he said.

“There are simply too many jobs and stakeholders, let alone retaliatory risk, that could be jeopardised by reopening Open Skies. We urge the Administration to maintain the agreements that have brought jobs and revenue to America.”

In its own announcement yesterday, the Partnership for Open and Fair Skies said seven US senators had asked the Trump administration to stand up for American workers by enforcing its current trade deals with the UAE and Qatar.

“The Gulf carriers’ massive subsidies put the livelihoods of too many hard-working Americans in danger. We are grateful that our elected officials have heard the concerns of their constituents and are demanding the government enforce its international agreements to stop this market-distorting behaviour,” said chief spokesperson Jill Zuckman.

She later told Bloomberg that the three airlines had an “unqualified right” to ask the government to enter into Open Skies discussions without filing a formal complaint under the IATFCPA.

“The idea to the contrary is a fiction that the Gulf carriers and their allies have invented because it suits their objective of throwing a wrench in the process and avoiding the US government taking action,” Zuckman was quoted as saying.

Atlas Air Worldwide CEO Flynn, who was also present at yesterday’s meeting, said the Trump administration did not indicate when it might take action on the dispute but would meet representatives from the US airlines as soon as their schedules permit, according to the publication.

The Open Skies row, which began in 2015, had been out of the spotlight for most of 2017 until a number of recent moves by carriers on both sides of the debate.

Last month, Delta Airlines released a video to educate employees on the alleged harm the Gulf carriers were causing to the US aviation industry.

In response, Dubai airline Emirates published a study by consulting firm Campbell-Hill Aviation Group, which claimed it supported more than 100,000 jobs in the US and contributed $21.3bn in revenue to the economy in 2015.

Qatar Airways also drew the ire of American Airlines in July after comments from CEO Akbar Al Baker regarding the age of flight attendants in the US were picked up in the media.

Read: American accuses Qatar Airways CEO of being “sexist and ageist” after comments

Al Baker, who in June was revealed to be pursuing a 10 per cent stake in American, later apologised.

It was later revealed American had ended codeshare deals with Qatar Airways and the UAE’s Etihad at the end of June.

Read: American Airlines cancels codeshare deals with Qatar, Etihad after crew controversy