Four U.S. airlines have banded together to counter efforts from the “Big 3” U.S. carriers to derail the “Open Skies” agreement the U.S. has with three Middle Eastern airlines.
JetBlue, Hawaiian Airlines, Atlas Air and FedEx on Monday urged the U.S. government to keep the current Open Skies agreement in place despite claims from the “Big 3” carriers – American Airlines, Delta Air Lines and United Airlines – that subsidies paid to Middle Eastern carriers should prompt a review of the agreement.
The four smaller U.S. carriers have formed an alliance called U.S. Airlines for Open Skies. In a letter submitted to the U.S. government, the group said repercussions would be significant.
“The unilateral actions demanded by the Big 3 likely would provoke retaliation by the [United Arab Emirates] and Qatar, encourage other Open Skies partners to take restrictive actions, deter countries from entering into Open Skies agreements with the United States, and raise questions about the United States’ commitment to the Open Skies regime,” USAOS reportedly wrote in the letter.
USAOS also claimed that increased competition in the airline industry through Open Skies agreements will “generate approximately $4 billion in annual savings for passengers on U.S.-international routes.”
The Big 3, along with seven airline unions, have their own coalition known as the Partnership for Open and Fair Skies. The group has called upon the Obama administration to initiate talks with governments of Qatar and the United Arab Emirates to address alleged subsidies paid to three airlines: Emirates, Etihad Airways and Qatar Airways. The three Middle Eastern carriers have denied that they have received subsidies.
Despite the high-profile support of the Open Skies agreements from USAOS, the Partnership for Open and Fair Skies claims that roughly two-thirds of an initial tally of comments to the government, numbering 3,000 in total, were in favor of revisiting the agreements in light of the subsidy claims.
The four smaller U.S. carriers have individually supported the Open Skies agreements under scrutiny, but Monday’s letter and announcement marks the first time the four have publicly banded together to support the cause.
James Hnat, JetBlue’s general counsel, told reporters Monday that the group thinks it important to convey to the U.S. government that “there are many different voices in this choir.”
The smaller U.S. carriers involved, along with major portions of the broader U.S. travel industry, have long urged the U.S. government to abide by the current agreements despite opposition from the Big 3. They say the Big 3 are looking to thwart competition.
U.S. Travel Association President and CEO Roger Dow said in a statement that the latest move from the four airlines “represents a stepped-up commitment against the war on competition inherent in the Big Three’s agenda.”
In an earlier letter to government officials, signed by each of the four smaller U.S. carrier individually, U.S. Travel noted the current competitive landscape.
“At present, Delta, United and American Airlines and their global alliance partners control three of every four transatlantic flights to and from the U.S.,” the letter said. “In several gateway cities, all three Gulf carriers – Emirates, Etihad and Qatar Airlines – already compete against each other as well as against U.S. carriers and their European partners. Rather than taking away flights from legacy U.S. carriers, they have added competition. Already the Gulf carriers are developing code-sharing and marketing relationships with U.S. carriers to bring visitors not just to gateway cities but to ancillary markets around the country.”
USAOS filed its letter on Monday, the deadline the U.S. government had issued for comment on the Open Skies debate.
