Smaller airlines fight back in Open Skies debate

A coalition of small U.S. airlines and cargo companies has formed to counter the major U.S. carriers in a turbulent battle over foreign airline subsidies that has roiled the nation’s aviation industry.  

JetBlue Airways, Hawaiian Airlines, FedEx and Atlas Air Worldwide have formed a new group called U.S. Airlines for Open Skies to counter claims of major airlines, known as the Big 3, that Gulf carriers have received billions of dollars in subsidies since 2004.  The Big 3, which consists of Delta, United and American, want a federal review of their claims.

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The new group wrote in a letter to the departments of State, Commerce and Transportation that the major carriers “do not speak for all, or even most, U.S. airlines” in the Open Skies debate.

“The Big 3 claim to support Open Skies but their demands, if implemented, would endanger this network of more than 100 U.S. aviation agreements,” the group said in remarks submitted on the final day of a comment period established by the agencies about the Open Skies debate.

“Acceding to those demands would not only breach the United States’ obligations to the UAE and Qatar but also raise serious questions about its commitment to Open Skies generally,” the letter continued. “If the network is endangered, then so too are the significant economic and national security benefits it provides.”

The major U.S. airlines say the payments to Middle Eastern competitors like Emirates Airlines and Qatar and Etihad airways violate the spirit of the Open Skies agreements between the U.S. and the governments of Qatar and the United Arab Emirates, which own the Gulf airlines. They want the Obama administration to launch a review of the claims with the Middle Eastern governments, which would involve a delicate set of negotiations that critics have said would upset other areas of foreign relations.

The Gulf carriers have denied violating the Open Skies agreements, and they have argued that U.S. airlines have historically received subsidized from the federal government at times of distress, such as the period after the Sept. 11, 2001 terrorist attacks. 

Unions that represent major U.S. airline workers, meanwhile, have formed campaigns to pressure the Obama administration to question the Persian Gulf carrier subsidies.

One such coalition, the Partnership for Open and Fair Skies, has expressed confidence that it will be able to convince the Obama administration to back its position on the Open Skies debate.  

“We are overwhelmed by the strong chorus of voices calling on the Obama Administration to address the more than $42 billion in unprecedented subsidies that are keeping the Gulf airlines afloat and harming American aviation jobs,” Partnership spokeswoman Jill Zuckman said in a statement as the docket was closing on Monday.  

“Now that the docket is officially closed, it is time for the administration to take immediate action and stand up for our workers being harmed by the Gulf carriers,” she continued. 

Travel industry and consumer groups have accused the airlines of trying to reduce competition for international flights. 

They cheered the arrival of an airline coalition to counter the main airline’s push for federal intervention in the Open Skies debate. 

“We welcome the U.S. Airlines for Open Skies Coalition to the fight to preserve an institution that has enormously benefited U.S. consumers, job creation, and the economy,” U.S. Travel Association President Roger Dow said in a statement. “It sends a potent message that not only does the business community overwhelmingly oppose what the Big Three and their unions are trying to do to Open Skies—but even major elements of their own industry disagree with them as well.”

The fight over the Open Skies agreements has exposed a rift between airlines and travel and consumer groups that has taken a personal tone at times. 

The largest U.S. airlines have tried to present a unified front to Congress in opposition to the Gulf carriers, but the new U.S. Airlines for Open Skies group said this week that its membership “collectively transports approximately 42 million passengers annually, ships nearly 8 million tons of cargo, and employs approximately 350,000 people, 40 percent more people than the Big 3 combined.”

–This report was updated at 2:58 p.m.