Open-Skies-Agreements Experiencing Turbulence

May 28, 2015
By Marc Bussanich

New York, NY—Most times business and labor leaders don’t see eye-to-eye, but they’re standing in unison on the issue of Middle Eastern governments subsidizing their airlines to expand in the U.S. market at the expense of domestic airlines’ market share.

In February, the New York Times reported that for more than two decades domestic airlines and successive administrations reached broad international agreements—open-skies-agreements—to increase air travel to more worldwide destinations. But now these agreements are becoming unglued, according to the Times story, as more nimble foreign competitors are benefitting from their governments’ subsidies.

That’s why six union representatives representing about 31,000 employees in the New York airline market are calling on federal officials to open direct negotiations with the governments of Qatar and United Arab Emirates concerning the over $40 billion in subsidies they’ve given to their respective airlines—Qatar, Etihad and Emirates.

The union leaders say that the $42 billion the two Middle Eastern governments have provided represents a direct violation of the U.S. Open Skies policy.

“For Open Skies to work it has to be fair. The United States needs to make sure that the United Arab Emirates and Qatar are not continuing to offer tens of billions of dollars in unfair subsidies, which could devastate an important part of the New York economy. We urge you to open consultations with Qatar and the UAE [and] request a freeze on all new routes by Qatar Airways, Etihad Airways and Emirates Airline to U.S. markets,” the union leaders wrote in a statement on Wednesday.

The unions claim that each daily international airline trip that is lost or foregone results in more than 800 net job lost, and they warn that the foreign airlines are racing against the clock to dump more subsidized capacity in the market when they recently announced expanding service to Orlando, Los Angeles, Boston, Atlanta and in New York. 

The union signatories—Captain Thomas Brielmann, Captain Brian Rosenstein and Captain Glenn Johnson of the Air Line Pilots Association; Captain Keith Wilson, president of the Allied Pilots Association; Laura Glading, president of the Association of Professional Flight Attendants; Captain Paul Jackson, president of the Southwest Airlines Pilots’ Association; George Miranda, president of Teamsters Joint Council 16; and Sara Nelson, president of the Association of Flight Attendants—sent a letter to the U.S. Secretary of Transportation Anthony Foxx, U.S. Secretary of State John Kerry and U.S. Secretary of Commerce Penny Pritzker asking them to open negotiations as soon as possible.

The full text of the letter is below:

Dear Secretaries Foxx, Kerry and Pritzker,

We are deeply concerned that Qatar Airways, Etihad Airways and Emirates Airline are receiving subsidies and other unfair benefits from the United Arab Emirates and Qatar, which puts U.S. carriers at risk and threatens employment prospects for many hard-working New Yorkers. As leaders of local chapters representing many of the 31,000 men and women American Airlines, Delta Air Lines and United Airlines employ in the New York region, we ask you to take action to address these subsidies that threaten the livelihood of workers and their families.

The $42 billion in subsidies and other unfair benefits that the Gulf carriers have received over the last ten years, as outlined in Restoring Open Skies: The Need to Address Subsidized Competition from State-Owned Airlines in Qatar and the UAE, have already allowed them to divert passengers from the U.S. carriers. This in turn reduced their ability to add routes and is now threatening existing ones. Every international flight that is lost ends up costing the U.S. an average of 821 net jobs.

This unfair competition will eventually have a negative impact on the New York economy –and hardworking New Yorkers and their families. It’s the employees who live and work here in New York – from maintenance workers to seasoned pilots – that will see their jobs put at risk because of these unfair subsidies. 

On behalf of our members, we urge you to open consultations with Qatar and the UAE as soon as possible. Furthermore, we ask that you request a freeze on all new routes by Qatar Airways, Etihad Airways and Emirates Airline to U.S. markets while consultations are going forward. Open Skies agreements only work if the parties play by the same rules.

May 27, 2015

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