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Delta Air Lines gets more support in battle against Gulf-based airlines

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http://m.startribune.com/delta-rails-about-gulf-based-carriers/422396703/?section=local

Delta Air Lines and other major U.S. carriers have been railing against what they deem unfair competition from Middle East-based airlines for several years. On Monday, Delta made a big play for support from the Metropolitan Airports Commission, which operates the Minneapolis-St. Paul International Airport.

MAC board members have supported Delta’s position on the issue in the past, and they still seem sympathetic to the company’s arguments. Minnesota’s congressional delegation has joined the chorus as well.

In the past month, the delegation has sent letters to Secretary of State Rex Tillerson and Department of Transportation Secretary Elaine Chao urging them to enforce Open Skies agreements — pacts between the United States and foreign countries designed to expand international air travel. The agreements, in general, make international travel more accessible to consumers.

But Delta’s chief legal officer, Peter Carter, told MAC members that Qatar and the United Arab Emirates have showered their state-owned airlines — Qatar, Etihad Airways and Emirates Airlines — with more than $50 billion in subsidies, a move that puts U.S. carriers at a competitive disadvantage, and one that threatens domestic jobs.

“This is an existential threat to hundreds of thousands of jobs,” Carter said.

Delta, American Airlines and United Airlines are hoping President Donald Trump will be receptive to their appeal, especially because Trump has railed against the North American Free Trade Agreement, initially vowing to tear up the pact and most recently stating he will renegotiate it.

Gulf-based carriers have begun service to several major airports, including New York, Atlanta, Los Angeles and Chicago — but not MSP, where Delta is the dominant carrier.

“Subsidized flights into hubs like [MSP] and other regional domestic hubs will shift passengers away from U.S. carriers and hurt service to U.S. hubs as well as the small- and medium-sized communities they serve,” the delegation wrote.

Sen. Amy Klobuchar, in a separate missive along with five other U.S. senators, said the Open Skies agreements promote fair competition in airline travel when “appropriately enforced,” providing U.S. consumers with “greater choices and access to additional international destinations” and allowing U.S. airlines to compete in new markets.

But, Klobuchar and others wrote: “Government subsidies by the Gulf states have disrupted the level playing field.”

In a statement on its website, Emirates said it first began serving U.S. markets more than 10 years ago and now offers direct flights to more than 50 cities not directly served by any American carrier. “We proudly contribute to the goals of Open Skies which are: greater competition, increased flight frequency, promotion of business travel and tourism, improved service, customer-centric innovation, and consumer choice,” the carrier said.

The U.S. Travel Association said its research indicates there are broad economic benefits to increased international travel to the United States, including job creation and better service for consumers.

Delta’s Carter said the group wants U.S. officials to begin talks about the Open Skies agreement with Qatar and United Arab Emirates and to freeze new passenger service by their airlines in the interim. Because Open Skies is essentially a diplomatic agreement, recourse is different from traditional trade deals.

Not all airlines share the same concerns as the Big Three. Another coalition, the U.S. Airlines for Open Skies, is comprised of U.S. passenger and cargo carriers — JetBlue Airways, Hawaiian Airlines, FedEx and Atlas Air Worldwide. It says “the legacy carriers do not speak for all, or even most, U.S. airlines.”

U.S. Airlines for Open Skies notes that the legacy carriers’ demand would endanger more than 100 existing Open Skies agreements with various countries “and the economic and national security benefits that come with them.”

 

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