Thursday’s edition of The Hill featured an op-ed written by Danny E. Sebright, President of the U.S.-U.A.E. Business Council, highlighting the tremendous success of Open Skies in increasing competitiveness in the aviation industry while bringing jobs to America.
Opinion: Let’s Keep Open Skies Open
By: Danny Sebright
19 March 2015
The Hill
Representatives from across the international aviation industry converged on Washington this week to attend the 14th Annual Aviation Summit, hosted by the U.S. Chamber of Commerce on Tuesday. Airlines, manufacturers, suppliers and distributors, and stakeholders from across the international travel industry at-large, were all in attendance. But amidst robust and engaging discussion on the Future of Space and Aviation in the Global Economy, storm clouds emerged over misguided challenges to a very successful longstanding U.S. policy – Open Skies.
In recent weeks the Big 3 U.S. airlines – American, Delta, and United – have criticized Gulf-based carriers for allegedly receiving unfair support from their shareholders. But as members of the U.S. – U.A.E. Business Council recently declared, the Big 3 need to “stop complaining and start competing” instead. These airlines, along with their major international alliances, control over 80% of all international flights. They are attacking Gulf carriers for receiving subsidies while ignoring the enormous amount of direct US government aid (such as pension fund bailouts, and war risk insurance), and state or local tax breaks (on jet fuel, office construction, airport leases) they receive.
Moreover, recent comments made by Delta CEO, Richard Anderson are not just misleading, self-serving, and hypocritical – but detrimental to the robust and critical bilateral relationship between the U.S. and the U.A.E. Beyond the incredibly important and close bilateral defense and security relationship, U.S. exports to the U.A.E. in 2014 were more than 22 billion dollars. And among the substantial amount of goods exported to the U.A.E. every year from U.S. companies, commercial aviation-related products are the largest subset. Indeed, this is a fast-growing and dynamic bilateral trade relationship and, unlike China, comes with a $19 billion trade surplus.
U.A.E. airlines meanwhile have been the largest international buyers of American commercial aircraft, with deliveries and orders valued at more than $200 billion since 2000. With over 250 non-stop flights a week to the U.S., U.A.E. airlines are transporting millions of visitors a year to cities all across America, filling hotels, attractions, and restaurants, and delivering more than $6 billion a year in combined economic activity. This is why the travel industry at large – from airports and hotels to tour operators and their customers – all support the routes offered by the Gulf carriers.
The Big 3 have spent their time recently by actively lobbying against foreign carriers (such as Norwegian Air) from gaining permits to establish footholds in the U.S. As a result, U.S. Carriers have been able to reap massive gains from consumers by placing a monopolistic premium on ticket sales – directly hurting customers. This has in turn also affected international gateway airports within the U.S., who would otherwise stand to benefit from direct flights to other markets.
A recent report by the U.S.-U.A.E. Business Council, “Commercial Aviation: Taking Flight” identifies more than $16 billion in annual benefits to the United States, supporting over 100,000 jobs and generating over $1.6 billion in American tax revenue. A 2014 White Paper update to that report, meanwhile, details over $130 billion in sales of Boeing aircrafts and GE engines at the 2013 Dubai Air Show by U.A.E. carriers – a direct, net positive impact on job creation in the United States.
With a $19 billion trade surplus at stake, U.S. officials should stand with virtually every single stakeholder in U.S. commercial aviation, including U.S. airports, travel and hospitality companies, business travelers and cargo airlines, and resist any efforts to limit free trade or restrict Open Skies agreements with the U.A.E. Let’s keep Open Skies open.
