American CEO Doug Parker
In another indication that there is a renewed push against the expansion of the major Gulf carriers in the US, American Airlines chairman and CEO Doug Parker said he was “highly confident” that the new Trump administration would address the issue.
Speaking at the US Chamber of Commerce Aviation Summit in Washington March 2, Parker said the major Middle East airlines had received $15 billion in government subsidies. He also described Emirates Airline’s announcement in January that it would launch Dubai-Athens-New York Newark service in March as “a shot across the bow.”
Dubai-based Emirates can operate the transatlantic route under fifth-freedom rights permitted in the US-UAE Open Skies agreement. But launching a second fifth-freedom route—the first was Dubai-Malpensa-New York—and going into a United Airlines hub has reignited a campaign against the Gulf carriers—Emirates, Etihad Airways and Qatar Airways—that was highly vocal in 2015 but mostly quiet last year.
American, Delta Air Lines, United and some labor groups failed to get the government-to-government talks they sought on the issue in the Obama administration, although some high level conversations were held.
Earlier in Thursday’s Chamber of Commerce conference, United CEO Oscar Munoz made his first detailed public comments on the Gulf carriers, making clear his firm opposition. The order of magnitude of the alleged subsidies, he said, “goes beyond anything I’ve seen before.”
American’s Parker said the Gulf carriers had “taken away” the India market and if they were allowed to continue to add capacity, Dallas-Paris would be next “and our hub-and-spoke system starts to fall apart. It’s that serious.”
Parker said it was not about taking jobs away from Boeing, which has sold large numbers of aircraft to the Gulf carriers, or about the principle of having a liberalized aviation policy.
“We are as big a fan of Open Skies as FedEx, but what we don’t like is when the provisions of Open Skies agreements are not adhered to. We are not asking for [the agreements] to be amended,” he said.
Speaking afterward with reporters, Parker said he was “highly confident” the issue would be understood by the Trump administration. “It’s certainly about American jobs,” he said. “At this point there are a number of things that could be done about the fact that they are violating [terms of the Open Skies agreements].”
Speaking on a panel at the same conference after Parker’s presentation, the CEOs of Alaska Airlines, JetBlue Airways and Atlas Worldwide Holdings warned that revisiting the terms of Open Skies agreements would be a major mistake. “We very much take a different view” from American, Delta and United on the issue, JetBlue president and CEO Robin Hayes said.
Responding to Munoz’s assertion that “facts” would ultimately push the US government to take action, Hayes said, “Let’s talk about some real numbers and real facts. The number of jobs [at US companies opposed to the American-Delta-United campaign, including—among others—JetBlue and FedEx Corp.] is 900,000.” He noted that the figure represents about three times more employees than American, Delta and United have combined.
The US Airlines for Open Skies (USAOS), a coalition of Atlas Air Worldwide, FedEx, Hawaiian Airlines and JetBlue Airways, also issued a statement in response to remarks made by Munoz and Parker at the conference.
“The legacy carriers claim to support Open Skies and competition, but the reality is their demands don’t match their rhetoric. Instead of going through traditional channels to address alleged subsidies, the legacy carriers have made political demands that would jeopardize the benefits Open Skies agreements bring to American workers, families, and communities.
“When it comes to jobs, our coalition—plus the other US airlines not aligned with the legacy carriers—collectively employ more than 942,000 workers, almost three-and-a-half times the number employed by the legacy carriers,” USAOS said.
Karen Walker Karen.email@example.com