By Susan Carey
A long-running attempt by the three largest U.S. passenger
airlines to persuade their government to limit access to U.S. air
routes by three big Persian Gulf airlines received more pushback
Monday when four opposing U.S. carriers warned that rolling back
liberal air treaties would cause economic damage and possibly
retaliation.
Executives from FedEx Corp.'s FedEx Express delivery unit, Atlas
Air Worldwide Holdings Inc., JetBlue Airways Corp. and Hawaiian
Holdings Inc.'s Hawaiian Airlines said that they have formed a
group called U.S. Airlines for Open Skies to underscore their
opposition to the position taken by American Airlines Group Inc.,
United Continental Holdings Inc. and Delta Air Lines Inc.
The three big U.S. passenger carriers in January asked the U.S.
government to renegotiate air treaties with the United Arab
Emirates and Qatar because three state-owned airlines in those two
nations allegedly have received more than $40 billion in government
subsidies since 2004. The U.S. trio claims this backing has allowed
Emirates Airlines, Etihad Airways and Qatar Airways to distort
global trade by expanding quickly without having to worry about
turning a profit.
The U.S. Departments of Transportation, State and Commerce said
they would listen to the three big U.S. airlines and opened
regulatory dockets where all variety of parties could file
information. Emirates, Etihad and Qatar have denounced the U.S.
carriers' claims, denied they are subsidized and filed rebuttals on
the U.S. dockets.
A number of other groups in the U.S. also filed their opposition
to the stance of American, United and Delta, including trade
associations representing U.S. tourism interests, aerospace
industries and individual carrriers such as Alaska Air Group Inc.'s
Alaska Airlines.
Previously, all four airlines in the new coalition individually
filed their objections on the docket. But now, the three U.S.
agencies are requesting that further submissions be made to the
docket by the end of Monday, and that any additional materials
commenting on submissions by made by Aug. 24.
A person familiar with the U.S. government's position said prior
submissions are being reviewed and considered, but no decisions
have been made.
FedEx, Atlas, JetBlue and Hawaii on Monday submitted a letter to
the secretaries of three federal agencies explaining that the big
three U.S. carriers don't speak for all or even most U.S. airlines.
The four, in their letter, also said there would be extensive harm
to U.S. consumers and the U.S. economy if the government were to
agree to renegotiate the liberal air treaties with the U.A.E. and
Qatar.
American, United and Delta, supported by several labor unions,
have their own group called Partnership for Open and Fair Skies. A
spokeswoman for the group claimed Monday that a majority of the
submissions on the dockets of the Departments of Transportation and
State supported the position of the trio, something that couldn't
be independently verified. She said the risk to open skies "is the
Gulf carriers themselves and their massive, market-distorting
government subsidies."
Since 1992, the U.S. government has negotiated 117 "open skies"
treaties with other countries, which give airlines from both sides
unfettered access to airports in both countries (although not the
right to fly domestic-only routes in the other's territories.) Many
of the agreements also contain extra freedoms that allow cargo
carriers such as Atlas and FedEx to fly from one foreign land to
another without touching their home markets, an arrangement that
lets them get their freight and express-air shipments where they
need to go in the most efficient manner.
Rush O'Keefe, general counsel of Fedex Express, said if the U.S.
starts retreating from its open skies policies, some trading
partners would likely "retrench" and want to revert to less liberal
aviation policies, which would cost U.S. jobs. FedEx operates 44
flights a week through its hub in Dubai and believes it would be
"the entity most subject to retaliation" should the U.S. government
try to restrain the growth of Dubai-based Emirates, which is
growing quickly and will add its 10th U.S. destination next
month.
JetBlue has benefitted from open skies, said James Hnat, that
airline's general counsel, and believes the big U.S. carriers
simply want to "thwart open competition and growth." Not only have
such liberal treaties given JetBlue opportunities to serve new
countries such as Colombia, but the influx of foreign carriers to
the U.S. has created partnership opportunities. JetBlue code-shares
with the big three Persian Gulf carriers, meaning their passengers
can make easy connections to JetBlue's domestic flights JetBlue
passengers can easily travel to most of the world via the three
Middle East hubs.
Highlighting the links, Emirates on Monday separately announced
the launch of a new "Americas Pass" that will allow its customers
to travel on five partner airlines on fares starting from $99 each
way. The partners are JetBlue, Alaska Airlines, Virgin America
Inc., and two Canadian carriers.
Write to Susan Carey at susan.carey@wsj.com
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