In Rejecting Attack On Arab Airlines, Trump Is Keeping The Friendly Skies Friendly
Brought in on a wave of both populism and nationwide Republican victory, President Donald Trump has presented his party with an odd question: Is he going to behave like a conservative?
This week, we got a definite yes.
The Trump Administration has rejected a plea by the Big Three domestic airline carriers — Delta, American, and United — to nullify “Open Skies” agreements with Qatar and the United Arab Emirates. They have argued for months that the two countries’ government subsidy of their respective airlines creates unfair competition, which supposedly jeopardizes the livelihood of 1.2 million US workers.
There is some truth to the argument, but it’s mostly wrong.
Open Skies agreements are free-trade agreements just for air travel. The goal, according to the State Department, is to eliminate government interference in “to provide more affordable, convenient, and efficient air service for consumers.”
That means the free market decides prices and consumers get a better deal. This promotes trade and travel, peace and prosperity. Not only do fliers get cheaper access to far-flung destinations, but American carriers themselves get access to routes throughout the world to compete against foreign airlines.
Open skies agreements have generated at least $4 billion in annual gains to travelers, according to The Brookings Institution, which found a 15 percent reduction in fares. Moreover, Brookings calculated that flights among open skies countries constitute about 20 percent of carriers’ annual revenues, and that US travelers could reap another $4 billion in annual savings if additional agreements were negotiated. We already enjoy Open Skies agreements with 123 nations, starting with the Netherlands in 1992.
(This fact is particularly ironic: Delta is fighting Open Skies, but whenever I fly international I benefit from Delta’s relationship with KLM, the airline of the Netherlands. Last Christmas I even bought Dutch tulips for my mom on a layover at Schiphol Airport!)
Moreover, yes Qatar and the UAE subsidize their airlines, but Gulf Coast Countries’ economies are hardly comparable to the US.
In just a few decades, Qatar and the UAE have rocketed from primitive societies to 21st Century powerhouses thanks to the efficiency that can only come from small, agile centralized planning. (They are both still monarchies, after all.) Leaders nationalized the energy sector and have directed those profits throughout the rest of the economy to help it catch up with the developed world. The Qatari and Emirati governments don’t just help the airlines. They help everything.
And it’s hardly as though the US government doesn’t help domestic carriers fly.
As the Mercatus Center fellow Veronique de Rugy noted on the subject, the US government definitely subsidizes American carriers: the Fly America Act requires federal employees to fly on US carriers for work purposes. So, if a CODEL needs to fly to Dublin, they can’t fly Aer Lingus even if it offers cheaper fares than a US carrier. And they pass the savings on to you, the taxpayer!
An appeal to “fair competition … is a common euphemism for government interference and should be rejected as such,” de Rugy noted.
While the news buries this kind of victory for President Trump, it’s one consumers will benefit from. Indeed, we have every reason to be optimistic that Trump’s dealings like this will be based on need rather than politics.
Trump’s detractors forget the independence he brings to the table. He owes nothing to party leaders or the federal bureaucracy. He’s unbeholden to corporate interests as no other modern presidential candidate has been: he took only $650 million in campaign donations, compared to more than $1 billion raised by Hillary Clinton, Barack Obama, and Mitt Romney. If we want leaders free from special interests, put that in Trump’s plus column.
The US Travel Association – the non-profit advocacy group that aims to increase travel to and within the United States – agree. President/CEO Roger Dow said:
“Anyone who supports U.S. jobs and a strong U.S. economy should be very pleased by the administration’s decision to preserve existing Open Skies agreements. … we strongly oppose any efforts to reduce secure travel, connectivity, growth and consumer choice that would harm our nation’s economy, businesses and employment.”
The Administration might change its mind at some point, but defenders of the free market (and incidentally international diplomacy) hope it doesn’t. A victory in ending Open Skies agreements with two small countries in the Gulf Coast could presage a snowball effect that rolls backs decades of progress in air travel. That would be bad for foreign relations, air travels, international trade, and yes even the airlines themselves who have picked this fight.
Jared Whitley is political veteran with 15 years of experience in media and Washington politics. He has served as press liaison for Sen. Orrin Hatch (R-Utah) and associate director in the White House under George W. Bush. He is also an award-winning writer.
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of The Daily Caller.