U.S. Travel Calls for Preservation of Open Skies Agreements
U.S. Travel Association president and CEO Roger Dow is urging the Trump administration to preserve the Open Skies agreements currently in place. The aviation deals align well with President Trump's stated priorities of supporting domestic jobs, correcting the U.S. trade imbalance and reducing government regulatory intervention, Dow pointed out.
The association's pleas come in the wake of renewed attacks on the agreements by the large U.S. carriers, American, Delta and United, the executives of which met with Trump yesterday. Since early 2015, those airlines have sought to break Open Skies agreements with Qatar and the United Arab Emirates in order to curb competition from Etihad, Emirates and Qatar Airways, claiming that, in part due to Middle East government subsidies, U.S. airlines are not competing on a level playing field.
"While their arguments are couched in compelling terms," Dow wrote this week in a letter to new Secretary of State Rex Tillerson, "the Big Three airlines are not seeking a level playing field to compete. Instead, they are lobbying for government intrusion that would benefit themselves, but hurt American manufacturing jobs, threaten U.S. economic growth and undermine U.S. national security interests."
The State Department itself praises the Open Skies agreements, which have been reached with more than 100 countries, from every region of the world. "Open Skies agreements have vastly expanded international passenger and cargo flights to and from the United States, promoting increased travel and trade, enhancing productivity and spurring high-quality job opportunities and economic growth," reads the State Department's website. "Open Skies agreements do this by eliminating 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."
By most accounts, the agreements have benefitted U.S. airlines. "By allowing U.S. air carriers unlimited market access to our partners' markets and the right to fly to all intermediate and beyond points, Open Skies agreements provide maximum operational flexibility for airline alliances," reads the State Department's website.
According to Dow, the addition of just one new Emirates flight to Orlando in 2015 created 1,400 jobs in that region. As for the U.S. airlines, he added, employment in the industry rose 4.3 percent between September 2015 and September. 2016.
With respect to U.S. manufacturing, Dow added in his letter to Tillerson, the Gulf carriers have committed to purchasing American products: Of the 306 firm orders for the Boeing 777X, 235 are from the three Gulf carriers.
Open Skies agreements could also be instrumental in addressing the trade deficit. As Dow pointed out, every dollar spent by an overseas visitor in the U.S. is considered an export. Undermining these agreements, however, could significantly reduce travel to the U.S., as backed up by an economic impact study of air-service liberalization, linked to from the State Department site.
That study, conducted by InterVISTAS-ga with support from 11 global airline and travel organizations and manufacturers, found "extensive and significant evidence" supporting the idea that the liberalization of air service between countries "generates significant additional opportunities for consumers, shippers, and the numerous direct and indirect entities and individuals affected by such liberalization. Conversely," the study concludes, "it is also evident that restrictive bilateral air services agreements between countries stifle air travel, tourism and business, and, consequently, economic growth and job creation."
Open Skies agreements would appear to be in line with President Trump's proposed deregulatory agenda, Dow added. Based on preliminary reports of the president's meeting with the airline executives, he gave the airlines no indication he would break with the agreements.