November 20, 2015: America's three most powerful air carriers are asking the government to raise new barriers that would limit competition among passenger and cargo airlines, and raise prices for consumers. American Airlines, Delta Air Lines, and United Airlines (or the Big 3) are demanding the United States freeze new U.S. routes for airlines from the United Arab Emirates (UAE) and Qatar, and renegotiate its Open Skies agreements with those countries.
The United States has more than 100 Open Skies agreements, including countries such as Germany, Japan, India, Colombia, and Ethiopia. These agreements, by enabling airlines, not governments, to make decisions about routes, frequency, and capacity, have resulted in more efficient and affordable air travel, which has spurred economic growth and job creation here in America.
Let's take a look at the numbers: Open Skies agreements generate US$4 billion in annual savings for passengers on U.S.-international routes, according to Brookings Institution research. That same research estimates that another US$4 billion in savings could be realized if the United States entered into more Open Skies agreements. Likewise, these agreements increase economic activity in local communities across the country.
Not only do they help expand international air service to mid-sized U.S. cities, such as Las Vegas, Portland, and Memphis, but they also enable smaller airlines, such as JetBlue, to initiate new domestic routes, as the airline recently did between Boston and Detroit.
U.S. exporters large and small also benefit from Open Skies agreements. The air cargo networks that have been established enable U.S. businesses to sell their products in markets around the globe. Moreover, Open Skies agreements are critical to our national security. Through these agreements, U.S. carriers have been able to transport troops and vital military supplies to hotspots such as Iraq, Afghanistan, and the Persian Gulf.
The Big 3 are asking the United States to renege on its commitment to Open Skies and violate the spirit and letter of these agreements by freezing the Gulf carriers' access to the U.S. market. However, they have failed to show that their allegations, even if assumed to be true, violate these agreements.
If the Big 3 were more confident about their claims, they would have utilized the procedure established by the International Air Transportation Fair Competitive Practices Act (IATFCPA). This procedure allows U.S. airlines to file complaints regarding unfair practices by foreign governments and airlines, which the Department of Transportation then investigates. The Big 3 likely were hoping that their demands would be decided in a political context rather than a thorough, evidence-based proceeding.
It's important to realize this isn't the United States against the UAE and Qatar, it is three U.S. airlines who favor protectionism over competition.
That is why four U.S. carriers – Atlas Air, FedEx, Hawaiian Airlines, and JetBlue – have come together to defend our Open Skies agreements. Together, our airlines collectively transport more than 42 million passengers annually, ship nearly 8 million tons of cargo, and employ 250,000 people; 40 percent more than the Big 3 combined. We understand firsthand how critical the network of Open Skies agreements is for not just U.S. airlines, but also consumers, businesses, and our military.
Ultimately, the Big 3 are not asking the U.S. government to enforce the rules as outlined in our agreements, they're asking it to break the rules to limit competition. If the Big 3 are successful, not only will they have cut off a major flow of foreign tourists, but they will have opened the United States up for retaliation in a way that could put at risk the savings and efficiencies that benefit U.S. travelers.
Authors Dave Bronczek is president and CEO of FedEx Express; Mark Dunkerley is president and CEO of Hawaiian Airlines Inc.; William Flynn is president and CEO of Atlas Air Worldwide; and Robin Hayes is president and CEO of JetBlue Airways. They first published this perspective on the political website 'The Hill'.