Middle Eastern Airline Subsidies Hurt American Workers

Tim Canoll | President, Air Line Pilots Association

As Americans book their holiday travel plans, they have numerous airlines and routes from which to choose. These choices are the result of hard work, innovation and competition that have enabled the travel industry to grow and thrive over the years. But today, the U.S. aviation industry faces a threat the likes of which I’ve never seen in my 27 years as an airline pilot. Without strong action from the Trump administration, it could destroy the foundation of the U.S. airline industry and hurt the millions of people who rely on it for good-paying jobs.

Since 2004, three Gulf carriers — Emirates, Etihad Airways and Qatar Airways — have received more than $50 billion in subsidies from their government owners, the United Arab Emirates and Qatar. These subsidies are essentially blank checks for these Gulf carriers to expand routes and capacity without any concern for economic realities. Since January 2015, these Gulf carriers have increased capacity to the United States by 50 percent, even though the demand to justify this expansion doesn’t exist.

The long-term plan of these Gulf carriers is to dump excess capacity into the market with artificially low prices and to expand their routes into nearly every major international market. In doing so, they are attempting to force out other airlines that are not backed by their government treasuries. With slick advertisements and celebrity spokespeople, these Gulf carriers have built global reach and recognition. But this effort is inconsistent with an important international trade deal.

In 1992, the United States signed the first Open Skies agreement with the Netherlands. These bilateral trade agreements allow airlines to fly between two countries and beyond to other countries without restrictions or quotas. Today, the United States has more than 120 Open Skies agreements with countries around the world. U.S. airlines and their employees support these very successful agreements, except for two: those with the United Arab Emirates and Qatar. The massive subsidies these countries provide to their airlines is inconsistent with their agreements with the United States and must be addressed.

Why should customers care about these trade agreements? If these two Gulf carriers use government subsidies to drive U.S. carriers out of the market, travelers will be left with fewer options and then, these Gulf carriers will be free to raise fares at will. We’ve already seen U.S. carriers pushed out of India and the Middle East as a result of this predatory behavior by these Gulf carriers.

What is especially troubling for me and the crewmembers I work alongside is the reality that the Gulf carriers’ trade cheating hurts American workers. Every time unfair Gulf airline competition forces a U.S. carrier off of a route, up to 1,500 American jobs are lost. Americans who value hard work and playing fair should not stand by while this happens.

Fair trade and an equal opportunity to compete demand that the Trump administration step in and put an end to these massive Gulf carrier subsidies once and for all. During his campaign, Trump promised to stand up for American workers and hold countries accountable for violating our trade agreements. This is an opportunity to achieve both. Moreover, there is widespread support from leaders in Congress for the U.S. government to take action. To date, nearly 300 members of Congress from every region of the country support enforcing our Open Skies agreements with the UAE and Qatar. This doesn’t mean abandoning the successes of Open Skies policy, as some have falsely claimed. It means requiring the UAE and Qatar to follow these agreements as written. Considering what is at stake, this is a reasonable request.

If the UAE and Qatar continue to massively subsidize their airlines, a once-thriving American industry will be badly harmed. Airline employees are hard-working Americans and we demand our government take action now to show the UAE and Qatar trade cheaters that we will not allow them to take advantage of our trade agreements.

Capt. Tim Canoll is the 10th president of the Air Line Pilots Association, International (ALPA), which represents more than 55,000 professional airline pilots who fly for 32 airlines in the United States and Canada. It is the largest nongovernmental aviation safety organization in the world.


The views and opinions expressed in this commentary are those of the author and do not reflect the official position of The Daily Caller.

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