For over four years American Airlines, Delta Air Lines and United Airlines—the Big Three—have waged a multi-million dollar lobbying campaign to frustrate competition in the US-EU market where—together with foreign alliance and JV partners—they control nearly 90% of the seats.

Having attained this profit-maximizing stranglehold and, shielded from oversight by antitrust immunity, having ample cash to lobby Washington to protect “their” market, the Big Three seek to block much-needed competitive choice.

They waged a battle to block EU-US entry by Norwegian Air International and Norwegian Air UK, which ultimately failed. They spent $50 million on an anti-Open Skies Gulf Carrier campaign targeting 5th freedom rights - a core element of all 126 US Open Skies agreements.

Now they are focused on Air Italy (formally Meridiana), a fledgling airline, which operates just 15 aircraft. Other than New York, which Meridiana has served for years, Air Italy, serves a few other US destinations just four days per week. Yet, the Big Three—which are among the top five most profitable of IATA’s 290 worldwide airline members—label it an existential threat.

This has nothing to do with Air Italy itself. Make no mistake; Air Italy is merely a stalking horse for the Big Three to attack US Open Skies policy again. Their alleged “case” against Air Italy is nothing more than anticompetitive subterfuge bereft of any basis in fact or law.

The Big Three claim that the Qatar government and Qatar Airways failed to disclose Air Italy’s Milan-US service aspirations before the US-Qatar Jan. 29, 2018 Understandings being signed.

The facts are:

•            The Air Italy investment was announced in a July 2016 press release;

•            It was approved in writing by the European Commission in March 2017;

•            The transaction closed in September 2017;

•            There was widespread press coverage about the transaction and the carrier’s service plans;

•            The US-Qatar discussions regarding the Understandings took place in December 2017 and January 2018;

•            The Understandings do not mention or prohibit cross-border investments.

The Big Three further assert that Qatar Airways effectively controls Air Italy in violation of EU law. However, EC Transport Commissioner Violeta Bulc confirmed that it fully complies with EU law.

Finally, the Big Three claim that Air Italy’s Milan-US flights are impermissible 5th freedom or 7th freedom flights that violate the US-Qatar Open Skies agreement. In fact, they are 3rd flights that are permitted by the US-EU Open Skies agreement. Air Italy has been deemed to be an EU-controlled airline with full US-EU Open Skies rights.

Of course, the Big Three are free to appeal in Brussels and seek a reevaluation of that ownership and control determination. If they were to succeed, then Air Italy would lose its US-EU Open Skies rights and be forced to end all EU-US flying. The Big Three haven’t done so because they know the Air Italy venture falls squarely in line with many other of their own investments.

Of critical importance to understand is if there is a question about Air Italy’s US flying, it is a US-EU Open Skies regulatory issue, not a US-Qatar Open Skies “enforcement” matter.

If the Big Three sincerely believe Air Italy is not entitled to US-EU Open Skies flying rights, it should make its case in Brussels with facts. However, their failure to do so, and instead to rely on political muscle in Washington, tells us all we need to know.

The Big Three’s Air Italy grandstanding is nothing more than another disingenuous attempt to hobble Open Skies and limit much-needed competitive choice--especially in the transatlantic market.

 

Kevin Mitchell is chairman of the US-based Business Traveler Coalition. The views expressed in this article are his own.