On March 13, Emirates Airlines launched a new route from Newark, to Athens, to Dubai. The new route received vehement opposition from America’s three largest legacy airlines, American, Delta and United.
The U.S. airlines claim that because Emirates, as well as Etihad and Qatar airlines, receive government subsidies, they are violating Open Skies agreements. These pacts between countries promote travel and trade by minimizing government interference and supporting free markets for the airline industry.
{mosads}Under the guise of protecting U.S. workers, the airlines are lobbying President Trump to freeze the route with the critical counter-terrorism ally until the United Arab Emirates stops subsidizing the airlines.
According to this preposterous lobbying effort, attacking Emirates squares with Trump’s “America First” campaign agenda. But grounding the new Emirates route and taking punitive measures against other government-subsidized Persian Gulf-based airlines will only harm America.
In 2014, Emirates, Etihad and Qatar – airlines collectively known as the Gulf carriers due to their headquarters in the Persian Gulf states of Qatar and the UAE – brought 1.1 million international visitors to the United States. These visitors funneled more than $4.1 billion to the nation’s GDP and generated more than $1.1 billion in federal, state and local tax revenue.
Gulf carriers stimulate America’s economy, not just by bringing tourists and business travelers to the States, but by purchasing American-made planes.
Boeing, for example, employs more than 148,000 people across the United States. Their revolutionary 777X model is manufactured in Washington, where the company is the state’s largest employer, and directly and indirectly supports more than 157,000 jobs. Nearly 80 percent of the 777Xs produced are sold to Etihad, Emirates or Qatar. In fact, Emirates owns the largest fleet of Boeing 777s in the world, valued at $45 billion.
These manufacturing jobs support the very same American workers Trump pledged to protect on the campaign trail. It doesn’t get more “America First” than that.
And Gulf carriers are improving things for American air travelers, as well.
Thanks to the competition that results from Open Skies, U.S. legacy carriers are now paying attention to on-board menus and creature comforts like installing fully lie-flat beds, which are already common among Gulf carriers. Their on-time performance is also at a record high, and lost baggage and the number of bumped passengers are dropping dramatically as a result of having to keep up with the Joneses.
Fare prices on Open Skies routes are also down approximately 32 percent compared to more regulated markets. In fact, passengers are enjoying some of the lowest international fares ever. This means seeing the Great Pyramids, eating sushi in Japan, or taking a canal ride in Venice is no longer just for the wealthy – in many cases a family vacation to Europe or Asia is cheaper than a trip to Disney World.
The benefits of our Open Skies agreements with Gulf states go far beyond aviation and tourism-related industries. According to the International Air Transport Association, roughly 40 percent of world trade value is transported by air, so violating Open Skies has far reaching implications.
FedEx CEO and President David Bronczek fears the U.S. legacy carriers’ attacks on Gulf a will “provoke retaliation against U.S. carriers and raise serious doubts about whether the United States is a reliable partner.”
Open Skies has also allowed our military to develop the global networks needed to facilitate the movement of military supplies around the world, including to and from Iraq, Afghanistan and the Persian Gulf. Violating the agreement would have long-term negative consequences for U.S. military readiness.
There is simply no proof that competition from Gulf carriers harms U.S. airlines in any way. In fact, of the 1,700 combined routes flown by the legacy and Gulf carriers, they compete directly on just two.
American, Delta and United claim government subsidies to Gulf carriers force the U.S. airlines to compete “with foreign governments rather than foreign airlines.” But these U.S. legacy carriers have short memories, and enough hypocrisy to fill a jumbo jet. They’ve apparently forgotten about the billions in federal and state subsidies that have come their way over the years.
According to Jonathan Grella, U.S. Travel’s executive vice president of public affairs, these airlines “have constructed themselves an enormous glass house, and their amnesia about their own subsidies has now cost them their credibility.”
If the Trump administration were to freeze the new route as requested (a direct violation of the Open Skies agreement), we would not only see a significant drop in foreign visitors and the resultant economic effects, but American exporters and the U.S. military, would suffer, as well.
Preserving our Open Skies agreement puts “America First” by doing what’s right by our nation’s workers, travelers, business community, military and economy.
Drew Johnson is a senior scholar at the nonprofit Taxpayers Protection Alliance.
The views expressed by contributors are their own and are not the views of The Hill.