Competition from the global exchange of goods and services benefits consumers and countries, while unfair competition penalizes those who play by the rules and erodes confidence in the rules themselves. That’s why it’s essential that international agreements governing free trade are upheld.
Accordingly, Secretary of State Rex Tillerson and Secretary of Transportation Elaine Chao should read and heed the letter sent from the eight members of Minnesota’s delegation to the U.S. House — as well as a letter from Minnesota Sen. Amy Klobuchar and five Senate colleagues from both parties — urging the U.S. government to enforce the Open Skies agreement with Qatar and the United Arab Emirates.
This bipartisan congressional consensus alleges that three airlines from those nations — Qatar Airways, Etihad Airways and Emirates — benefit from government subsidies worth more than $50 billion, which the congressional members and U.S.-based carriers such as Delta Air Lines believe give the airlines an unquestioned and unfair advantage that threatens the global aviation system and with it good-paying jobs here in the U.S.
In fact, according to an analysis from the Partnership for Open and Fair Skies, which includes Delta, American and United as well as several key airline-sector unions, every daily long-haul, round-trip flight lost to a Gulf carrier due to subsidized competition results in a net loss of 1,500 U.S. jobs.
The stakes are high here at home, according to the Minnesota representatives, who write: “If additional subsidized routes continue to be added it will negatively impact air service and employment in Minnesota. Subsidized flights into hubs like Minneapolis/St. Paul International Airport and other regional domestic hubs will shift passengers away from U.S. carriers and hurt service to U.S. hubs as well as the small and medium sized communities they serve.”
According to the partnership, from 2011-2016 the Gulf carriers grew capacity at a rate more than six times the global GDP growth rate, suggesting that the subsidies are taking passengers from airlines based in nations working within the Open Skies framework. And the danger of overreliance on these Gulf carriers was clear when Monday’s Mideast diplomatic spat between Qatar and five nations disrupted air travel.
Some U.S.-based carriers and air cargo lines that are not part of the partnership disagree with many of its claims, and the Gulf carriers deny the level of subsidies. And some consumers contend that the subsidies lower fares. But the best way to lower prices is global competition operating on a level playing field.
Support for free-trade pacts will decline even further if the public doesn’t have the confidence that they will be enforced. It’s critical for the airline sector and the economy at large for the U.S. to take the steps necessary to ensure a free — and fair — environment for airlines.