Open Skies rifts roil airline industry

A pair of rifts over Open Skies agreements between the U.S. and foreign nations has roiled the nation’s airline and travel industries. 

A coalition of groups that represent parts of the American aviation industry are calling for a federal review of subsidies received by a trio of Middle Eastern airlines, which they say violate the spirit of Open Skies agreements. 

The airline industry also has taken issue with a bid by Norwegian Air Shuttle for inclusion in the Open Skies agreement between the U.S. and Ireland for service based in the latter nation that the company says would dramatically lower the costs of intercontinental flights.  

{mosads}The groups say Norwegian Air is trying to skirt labor and tax laws in Norway and they argue that Qatar Airways, Etihad Airways and Emirates Airlines, which are owned by the governments of Qatar and the United Arab Emirates, have received more than $42 billion in subsidies since 2004. 

U.S. Travel Association President Roger Dow said Thursday the airlines are being too “aggressive” in their opposition to competition from foreign competitors. 

“We are heartened and relieved to hear that airline unions share our priorities: U.S. economic growth and job creation,” Dow said in a statement. “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.” 

A coalition of airline groups known as the Partnership For Open and Fair Skies said Thursday that it was travel groups that were misguided. The coalition said subsidies threaten U.S. jobs by making it harder for U.S. airlines to compete with the foreign carriers. 

“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,” the coalition said in a statement about a Travel Association meeting being held on Thursday. 

“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,” the airline groups continued. “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.” 

The State Department says the purpose of Open Skies agreements is to eliminate “government interference in the commercial decisions of air carriers about routes, capacity, and pricing, freeing carriers to provide more affordable, convenient, and efficient air service for consumers.”

The coalition that is calling for a review of the agreements includes American, Delta and United airlines, as well as the Air Line Pilots Association, International; the Allied Pilots Association; the Association of Professional Flight Attendants; and the Airline Division of the International Brotherhood of Teamsters.

The groups are calling on the Obama administration to launch a review of the Middle Eastern airlines’ subsidies, which they say is allowed under the existing Open Skies agreements between the nations. 

The Travel Association’s Dow said airlines should be focused on delivering better service to passengers. 

“We wish we did not have to stand apart from our friends in the airline industry on this or any other issue,” he said. “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.”