Tuesday, December 6, 2016

Obama Failed to Block Middle East Airlines' Rapid U.S. Growth - Now It's Trump's Turn to Try

Emirates, Etihad and Qatar have increased their U.S. flying by 47% since January 2015, despite a campaign by American, Delta and United to slow the growth.

The three Middle East airlines -- Emirates, Etihad Airways and Qatar Airways -- continue to add U.S. routes at a rapid pace, but opponents like to think the Donald Trump administration will slow things down.

Since January 2015, current and planned U.S. service by the three carriers has increased 47%, according to the Partnership for Open and Fair Skies, which represents American, Delta and United and most of their unions in opposing the buildup.

Last week, Qatar Airways said it would add a Doha-Las Vegas route at an unspecified date in 2017 or 2018. In 2016, Qatar added Doha to Atlanta, Boston and Los Angeles. Emirates will add Dubai-Fort Lauderdale on Dec. 15; during 2016 it boosted service to Dallas and Los Angeles. And Etihad has said it will increase its Abu Dhabi- Dallas/Fort Worth service from four a week to daily in February 2017.

"The Gulf carriers have been racing against the clock to add routes to the U.S. before anybody could shut the door on them," said Jill Zuckman, spokeswoman for the Partnership for Open and Fair Skies.

The partnership began its campaign in January 2015, when it released a report showing that area governments had provided $42 billion in subsidies to the three Gulf carriers. The figure was revised to $50 billion in June 2016.

The increased flights have come despite what appeared to be a promising development this summer, when the U.S. State Department said it would conduct informal talks with Qatar and United Arab Emirates regarding the expansion by the three subsidized carriers.

But the talks appear to have gone nowhere, even though American CEO Doug Parker said in September that American, Delta and United want nothing more than assurances that the Middle East carriers won't operate flights, known as fifth freedom flights, from third countries to the U.S.

Currently, Emirates flies daily between Milan and New York's John F. Kennedy International Airport, the Middle East carriers' only fifth freedom flight to the U.S.

"We were making slow progress under the Obama administration, but it effectively has run out of time," said Zuckman.

Trump "has repeatedly said he will enforce our trade agreements and look out for American workers," Zuckman said. "We believe these Open Skies agreements are a perfect vehicle for doing these things; we are hopeful that this issue fits in squarely with all that things {he} has said on the campaign trail."

Zuckman said the partnership "looks forward to briefing President-elect Trump's team as soon as possible."

The January 2015 report suggested that the Gulf airlines' practices make a mockery of Open Skies policy, developed in the early 1990s in an effort "to enable U.S. carriers to compete in a global market undistorted by government actions that advantage foreign carriers.

"The UAE and Qatar have turned this policy on its head by pursuing aviation industrial policies that are designed to distort the global market in favor of their state-owned carriers," said the report, which noted that Open Skies policy requires that "competition is fair and the playing field is level."

In fact, Open Skies treaties have turned into lopsided deals where the Middle East airlines fly nearly two dozen daily flights to the U.S., while U.S. airlines do not fly a single flight to Dubai, Doha or Abu Dhabi.

(Tim Reed - The Street)

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