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 heed members of Congress urging the U.S. 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 over $50 billion, which the lawmakers and U.S.-based carriers like 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. According to the partnership, from 2011 to 2016 the Gulf carriers grew capacity at more than six times the global GDP growth rate, suggesting that the subsidies are taking passengers from airlines based in nations honoring Open Skies’ terms.
Some U.S. carriers and cargo lines that aren’t in 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 there’s no 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.
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