The CEOs of America’s big three legacy airlines met with Secretary of State Rex Tillerson Wednesday morning to discuss their ongoing trade fight against two gulf states.
Delta Air Lines CEO Ed Bastian, United Airlines CEO Oscar Munoz, and American Airlines Group Chairman and CEO Doug Parker met with Tillerson at the Department of State in Washington, D.C., according to the secretary’s publicly disclosed schedule.
The three US-based legacy airlines have long argued that the United Arab Emirates (UAE) and Qatar illegally subsidize Emirates Air Lines, Etihad Airways and Qatar Airways, in violation of bilateral aviation agreements with the U.S. called Open Skies agreements.
Delta, United and American, through the Partnership for Open & Fair Skies (the Partnership), say that Emirates, Etihad and Qatar operate with an unfair advantage by receiving large government subsidies. They argue that while they must react to supply and demand when determining routes, the Gulf carriers are not beholden to the same market forces and can pull from an unlimited pool of government subsidies.
“We appreciate the opportunity to speak with the Trump administration about the threat that the massive Gulf carrier subsidies pose to 1.2 million American workers and the harm that will only continue if our Open Skies agreements aren’t enforced,” Jill Zuckman, chief spokesperson for the Partnership, told The Daily Caller News Foundation Wednesday. “We look forward to working with the administration to protect American jobs and defend the U.S. aviation industry from trade cheating.”
The recent ouster of White House advisors Sebastian Gorka and Steve Bannon complicates the issue for the Partnership. The two men were viewed as two of the strongest voices when it came to President Donald Trump’s “America First” agenda. While it is unclear to what extent the two officials had been working on the Open Skies issue, Politico reported in July that National Economic Council Director Gary Cohn, White House trade adviser Peter Navarro, and then-White House Chief of Staff Reince Priebus had been discussing the issue.
Navarro has chaired at least three meetings on the subject throughout the summer, the latest occurring in mid-August, TheDCNF has learned. The meetings involved the Department of Transportation, the Department of Commerce, the Department of Justice, the United States Trade Representative, and the Department of State.
Some calling on the Trump administration to intervene remain confident despite recent turbulence inside the administration. Frank McCarthy, a principal with the Keelen Group, is not concerned about the departure of Gorka and Bannon.
“Gorka and Bannon did not come on until late in the campaign,” McCarthy told TheDCNF Wednesday. “While at the staff level, they may have been driving forces for the president’s “America First” mantra, it’s something ingrained in the president.”
Trump railed against what he characterized as bad trade deals throughout the campaign, telling Americans in the nation’s rust belt that they were getting a raw deal. “I have confidence that the president is going to put American workers first, and that he is really looking at this issue differently than the Obama administration did,” McCarthy said. “When it came to trade policies, Obama often left blue collars workers behind, but Trump has an opportunity to actually put American workers first in our trade deals.”
While the big three legacy carriers have worked to frame the issue as a fight for American jobs, a number of U.S.-based industries are siding with the Gulf carriers, arguing that the Open Skies agreement need not be altered.
U.S.-based airlines FedEx, JetBlue Airways and Atlas Worldwide disagree that actions by the UAE and Qatar are costing American jobs. They are part of the U.S. Airlines for Open Skies Coalition (the Coalition), which argues the agreements promote U.S. jobs and economic growth.
“The legacy carriers say they want to protect U.S. jobs but in fact they want to protect themselves from competition,” Andrea Christianson, spokesperson for the Coalition, told TheDCNF Wednesday. “The U.S. network of more than 100 Open Skies agreements reduces airfares, promotes economic growth, and facilitates U.S. exports.”
Christianson said that if the legacy carriers had a legitimate claim, they would use the legal procedure established by Congress to address such complaints. “Instead, they’ve mounted a lobbying campaign to get a political fix,” she said.
Despite recent shake-ups in the White House, United Airlines President Scott Kirby remained confident that the U.S. government will step in on behalf of the legacy carriers.
“Our political system in the United States is messy and often frustrating, but the great thing about this country is that at the end of the day, we do the right thing,” Kirby said at an aviation conference in Las Vegas on Tuesday.
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