It’s open season on the Open Skies talks in Washington.
Emirates Airlines is now putting together a team from its legal, strategic and financial departments to hit back at allegations from US airlines that it used unfair business methods to become one of the leading forces in global aviation.
Tim Clark, the Emirates president, is also planning to fly to Washington to meet officials from the Department of Transportation to head off any new restrictions to the current open skies policy. Detailed allegations
were contained in a briefing last week.
The dispute is about more than Delta, United and American Airlines vs. Emirates Airline, Qatar Airways and Etihad Airways. It also is a battle between the U.S. carriers and consumer groups, and it’s likely to draw in such aviation industry heavyweights as Boeing and FedEx, writes the St. Louis Post-Dispatch
The U.S. airlines are accusing their Persian Gulf rivals of receiving over $40 billion in improper subsidies since 2004 from the governments of Qatar and the United Arab Emirates.
The Gulf carriers deny receiving subsidies and Qatar Airways Chief Executive says the US airlines had themselves received backdoor subsidies via Chapter 11 bankruptcy protection.
The US big three airlines can’t deny this. A GAO
report says US airlines have shed over $23 billion worth of liabilities, dumped leases they agreed to and reneged on employee contracts.
The US airlines like to say they’re concerned about their employees but factoring in pensions liabilities offloaded on taxpayers, (some websites think it may be as high as $30 billion) and the payments made to airlines after 9/11, it adds up to benefits similar level to that the US airlines claim to have been taken by the Gulf carriers.
The US Airlines also enjoy anti-trust immunity protection with their airline alliances, which could be seen as a subsidy not only for US airlines but their European partners as well.
In sum, this has nothing to do with the fairness of the market or US jobs, it’s about protecting profits.
The US airlines are dressing this up as some noble crusade for the US people but it is a selfish act.
Perhaps we know better what protectionism does. Usually it does not save the corporation it protects, but makes them lazy, less competitive and leaves a wrecked industry.