Go ahead and call them the friendly skies, but there's a war waging in the airline industry between carriers both here in the United States and around the globe. The fight is over something called Open Skies Agreements, which help to set rules that create a free market for the companies that fly people and things all over the world. But the true impact of the fight depends on which side you ask.
Jill Zuckman works with a group called the Partnership for Open and Fair Skies. She explained the agreements to Circa, saying, "It requires that there be a level playing field and that means you’re not allowed to take subsidies. You’re not allowed to take cash from your government to keep you going.” But the group says three overseas carriers -- Emirates, Ethiad and Qatar -- got tens of billions of dollars in handouts from the governments of the UAE and Qatar.
Sara Nelson is with the Association of Flight Attendants-CWA, which is working in cooperation with the Partnership for Open and Fair Skies. She called the subsidy claims the biggest trade violation out there today, saying, “This is a test for the Trump administration."
The airlines strongly reject the claim that they received subsidies. On its website, Ethiad says American megacarriers are threatening competitive choice, and that it receives no subsidies.
It all sounds like inside baseball for the airline industry, but the partnership says the boost it claims the foreign carriers received allow them to undercut legacy carriers, specifically the three represented in their cause: American, Delta and United. They're concerned that eventually American carriers could be priced out of some routes.
“Once they knock everybody out of these routes and they have these routes to themselves, they will raise the prices sky high,” Zuckman said.
The partnership points to potential job losses as a reason to take action. Although that point has been disputed by several groups, U.S. senators on both sides of the aisle have agreed it is a concern and have written members of the administration, including Secretary of State Rex Tillerson and Transportation Secretary Elaine Chao.
There's also turbulence within the airline industry regarding the issue. Another group, US Airlines for Open Skies, says the legacy carriers don't speak for them. The group represents JetBlue, Hawaiian and Atlas, as well as FedEx. That group thinks the legacy group is trying to restrict competition, and it is concerned about potential consequences for travel and tourism. "American, United and Delta want President Trump to limit competition, jeopardizing Open Skies agreements and millions of American jobs they support,” says an ad for the group.
US Airlines for Open Skies fears the legacy carriers' call for action could lead to retaliation from foreign countries. And on its website the group points out that the U.S. government has provided direct and indirect subsidies to the airline industry to keep big carriers in business.
So where does President Trump stand on the Open Skies debate? His administration has taken no stance on the issue to date, leaving both sides in a holding pattern.