February 7 - BTC Memo to EU and U.S. Governments Regarding Attack on Open Skies Policy


To: Members of the EU Parliament, Officials at the European Commission, the U.S. Departments of Transportation, Commerce, State and Justice, the White House, Members of the U.S. Congress and International Media Outlets

The Wall Street Journal today reported on the debate over reversing U.S. aviation Open Skies policy as airline CEOs met with Obama Administration officials last week to push a proposal that would block foreign airline new entry and robust competition. The readers of the WSJ understand commercial protectionism when they see it. Of the readers’ comments pasted in below 99.3% reject the airline CEO’s arguments.

The USG needs to communicate straightaway to these airline CEOs that they are steadfast in their commitment to upholding the integrity of the Open Skies policy and resulting agreements. This flagrant attempt to protect themselves from smarter and better run airlines with superior products and services is an embarrassment to the Unites States of America as a leader in free market capitalism.

The Wall Street Journal

Big U.S. Airlines Fault Persian Gulf Carriers

By Susan Carey – February 6, 2015

EXCERPT

The chief executives of the three largest U.S. airlines said they are pressing the government to modify or—lacking substantive remedies—annul air treaties with two Persian Gulf nations. The CEOs cited what they claim are subsidies and government industrial policies that favor three of the Gulf region’s fast-growing carriers, distorting global air transportation.

Read More at http://btcnews.co/1BUKNjw.

WSJ READERS’ COMMENTS

SCOTT MCCOY

If these state-owned Gulf carriers want to spend some of their petro-dollars buying big new planes from the U.S. and Europe and then use them to bring top-drawer service to more U.S. cities, I sure won't complain.  These semi-incompetent American carriers, with their rude staff and limited passenger service, never complained about competing against other state-owned (and previously state-owned) carriers in virtually every other part of the world (Air France, Alitalia, Aerolineas Argentinas, etc).  What they don't like now is the tough competition itself, especially after wasting years of energy buying up competitors and pacifying their unions.  We can only thank God that most U.S. companies aren't as poorly run as our airlines.

MARK LEVIN

Its terrible to say, but no savvy international traveler would choose to book a flight on a US carrier, unless schedule demands preclude alternatives or it was a frequent flyer points ticket.   Most major foreign airlines have an excellent service level that you don't see anymore with the US companies. Perhaps if the unions weren't bleeding the airlines dry it might be different.

Ashok Ayyar

Customer service is the issue... but it's not really the airlines' fault. They can't get more from a unionized crew, which is why, like all other unionized industries, they will ultimately succumb to foreign competition. Our unionized industries can't compete in a free, global marketplace. See steel, autos, ports, etc. The only unionized industry that survives with inefficiency, high costs is, and poor "customer service" ... is government.

Clark Sayer

I'm a Diamond on Delta and a 1k Premium on United.  So, I travel a lot.  Customer service on both airlines is poor to non-existent.  DL is worse that UA.  Consequently, I have little compassion for the whiners at all three carriers who bemoan the success of the Gulf carriers while simultaneously doing little to nothing to improve their own level of service.  If one or more of the Gulf carriers, or carriers like SQ or CX, were allowed to offer US domestic service, I'd jump to them in a heartbeat

Ashok Ayyar

Customer service is the issue... but it's not really the airlines' fault. They can't get more from a unionized crew, which is why, like all other unionized industries, they will ultimately succumb to foreign competition. Our unionized industries can't compete in a free, global marketplace. See steel, autos, ports, etc. The only unionized industry that survives with inefficiency, high costs is, and poor "customer service" ... is government.

Clark Sayer

I'm a Diamond on Delta and a 1k Premium on United.  So, I travel a lot.  Customer service on both airlines is poor to non-existent.  DL is worse that UA.  Consequently, I have little compassion for the whiners at all three carriers who bemoan the success of the Gulf carriers while simultaneously doing little to nothing to improve their own level of service.  If one or more of the Gulf carriers, or carriers like SQ or CX, were allowed to offer US domestic service, I'd jump to them in a heartbeat

Brian Conway

Gritty, sticky planes and prickly cabin staff decked out in full wrinkle--why aren't the U.S. airlines using their baggage fees and incidental charges to clean up their planes and provide the service and amenities the gulf airlines provide on every flight. The U.S. airline executive should take a couple of 14-hour rides on Emirates to see how it should be.  Problem is, they may want to continue "justifying" why they need to fly a Gulf carrier on a regular basis--just like the D.C. teachers sending their kids to private schools.

Sridhar Chalam

I would like Emirates, Qatar Airways and Etihad to start domestic air service in the US also.

Amr Wolfe

The American Airlines are hypocrites and should be ashamed of themselves. First, they received billions of US Taxpayer subsidies and 'gifts' to the airlines (which were failing prior to 9/11, but used the terrorism of 9/11 to extract more money out of the American taxpayer), now they are making record profits (none of which is going back to the US taxpayer who bailed them out or the creditors left on the sidelines during their 'bankruptcies'), and now they are complaining about the foreign airlines.  The reason I would pick the foreign airlines is because their service is a magnitude or more greater than anything the US airlines even attempt to provide.  I say, if they can't take the heat, let airlines fail.  The US Taxpayer doesn't need them.

Charlie Ryan

@Amr Wolfe Record profits?  You need to put that in context. Delta has a pretax margin of 2.6%. Foreign airlines don't have to adhere to the American Disabilities Act.  They can't fire obese or elderly flight attendants.  Look at an Asian aircrew sometime.  Not one flight attendant over 30.

Amr Wolfe

@Charlie Ryan @Amr Wolfe

the American airlines have capitulated to the unions.  they have  only themselves to blame.  The fact they can't fire incompetent stewardesses is a competitive disadvantage for them. But they agreed to these rules in their union contracts.  instead of thinking  about their core service industry and their customers, they would rather stick it to the customers and save their unionized workers.  fact is - there is no need for the stewardesses - they don't serve food anymore, they barely have time to serve water, and they are usually sullen-faced.  so yes, i'd rather be greeted by a cheerful and happy stewardess - and if that means flying a foreign airline I'll do just that.

PIYUSH DHANUKA

rather than improving service and reducing airfare (at today's low fuel cost), they want to increase the government intervention to help reduce competition. This will only invite more trouble for example the one mentioned in today's WSJ editorial  http://www.wsj.com/articles/big-pharmas-obamacare-reward-1423180690?mod=hp_opinion  Reminds me of what Lenin is claimed to have said: "The Capitalists will sell us the rope with which we will hang them."

Thomas Wyrick

The major US carriers are merging and adopting various tactics to monopolize US markets and jack up air fares. Why should American consumers support punishing airlines that have lower fares?

Justin Murray

So, American carriers think that because Gulf carriers are not unionized that classifies as a subsidy? What a strange world we live in.

Zachary L

@Justin Murray insane

Charlie Ryan

@Justin Murray No.  The point is that these states OWN these airlines.  Can a public firm compete with a company that has zero incentive to control cost.  Could Apple or IBM compete with a country?

Justin Murray

@Charlie Ryan They probably could, but they can use the same nonsense argument Americans make when talking about government owning the roads, "Who will provide the airlines?"

Bart Solari

GOUGING...next time you rent a car at SFO check out the "fee" for using the sky train from the terminal to the rental garage...$20.00!

jeetendra patel

The US airlines CEOs are shedding crocodile tears. As someone who travels frequently, I can say there is no love left for US carries.  Their pathetic customer service is just start. For worst flight experiences they want to charge double the money (compared to gulf carriers). No wonder they have lost all international traffic going to Asia (in particular India). They are acting like monopolies and they do not like competition. Improve your service and seats and passengers will come.

Richard Sessoms

The US Airlines need to stop playing Americans as fools and trying to gouge us anyway they can. I had to cancel a plane ticket a few months ago, AA charged me $200 cancel fee up front and then another $200 today when I wanted to use the left over credit to go towards a new ticket. So a ticket that originally cost me almost $600, they charged me $400 in fees and I only got to use $200 to go towards another ticket. That's highway robbery.

Jane Debros

if they are really subsidized to the tune of 48 bio over 6 years, let them: they fly a nonprofitable cpy, sooner or later debt will crush them. the best is to ask them to pay cash for their airplanes and maintenance....you think a derwish dusting under your seat is a safety factor? ever seen an arab mechanic? i did. fixing lawnmowers under my trees yes, stubbly beard, cigarette alight greasy hands...come-on folks, they are as good at aircraft maintenance as they are at making a nuke work: you dont want to be near it when they try it out. incompetent is the word. The hidden subsidies come from europe, eads etc, theres the real scandal/unfair competition, not from your friendly rich beduin!

Robert Yuna

@Jane Debros The Persian Gulf (Arab)carriers have excellent safety records and from my observation and they treat their customers very well.  Several flights into Erbil a couple of years ago took me to Turkish Air.  I was delighted with THEIR service and food on their 777 airliners from Toronto to Erbil via Istanbul Airport which has a tremendous Turkish Air passenger lounge, the best that I have seen. 

Bart Solari

@Jane Debros straight forward empirical observations...no bias, or racism here.

Dan Laroque

As royal companies of non-democratic nations, I fail to see what can be done.  In my travels I always fly US airlines because we have the best maintenance and the best pilots.  It is a matter of safety to me. Of course, without competition our US airlines would go on jacking up prices, making us pay to bring food on board aircraft, turn the seats into benches, charge for using the toilet, and create standing-room-seating (leaning against a bulk head with a hand strap).  Our airlines are anything but sensitive to the flying "experience" of customers. They even steal our frequent flier miles.

Mauricio Gomes

They just got around to merging and going from 6 airlines to 3 in the US. Now that prices are good, they don't want other carriers to swoop in and wreck the party.

sam leake

And perhaps the fact that Gulf Carriers fly non-stop from major U.S. airports to Dubai and on to other Gulf destinations vs stop and layover in London and no connections with regional carriers on to destinations such as the Seychelles might have something to do with it.

Richard Sessoms

@sam leake That's how they have been selling themselves as such and it works. I would much rather fly all the way to Doha or Dubai, then connect to a flight to SE Asia from the East Coast than fly United. I have twice flown United from Dulles to Doha, and Dulles to Dubai. The first flight was strictly horrendous while the second one was ok. But my flights on the ME Carriers are almost always a great flight.

Bart Solari

@Richard Sessoms @sam leake Dulles is a real treat as a airport...it's like bathing in the Ganges

Alonzo Quijana

"Richard Anderson, Delta’s CEO, said that the airlines’ efforts are like those of steelmakers or agricultural firms trying to stop imports of deeply subsidized products, and that the airlines’ problem demands a “tried-and-true” trade-policy remedy." Yeah.  U.S. Steel, Bethlehem Steel, and the sugar barons of South Florida.  Great company you're keeping there Richard.

Alonzo Quijana

"The CEOs cited what they claim are subsidies and government industrial policies that favor three of the Gulf region’s fast-growing carriers, distorting global air transportation." Talk about rank hypocrisy.  U.S. airlines have been subsidized since day one.  Tax free bonds for facilities.  Airports operated by tax-exempt government agencies.  The Essential Air Services Act.  Free training for many pilots (the military). Government-provided ATC.  The Reserve Air Fleet payments.  Government subsidies for aircraft manufacturing. Exemption -- the IATA loophole -- from anti-trust laws.   Protection from foreign competition on U.S. routers.  Backstopping ( the $9 billion in direct grants to airlines after 9/11). The Buy America rules. 

Pavel Gatynya

I cannot wait for these Gulf Airlines to fly everywhere in US. I can only hope that this welcoming competition will force US airlines to improve their horrible service. US airlines are the worse in the world in terms of service.

Alonzo Quijana

@Pavel Gatynya "I cannot wait for these Gulf Airlines to fly everywhere in US." Well, better get an airport lounge membership, because you'll be waiting for the rest of eternity.  The airlines have some of the most powerful lobbyists on K Street. 

Daniel Davis

Just tack on a bunch of new fees and everything will be okay.

Charlie Ryan

EVERYONE loves to hate airlines.  These companies have lost more than they've made.  If passengers were willing to pay more for wider seats, etc, the airlines would give it to them. You'll care about this issue when the only way to get from LA to NY is on some middle eastern airplane with Johnny Jihad at the controls.

Richard Sessoms

@Charlie Ryan You obviously have never flown with one of those Gulf Carriers. I have flown with all three of those carriers listed and some more that aren't listed in this article. They have world class usually European/American Pilots that fly the planes,  not some johnny yokel from the camel pasture.

Robert Yuna

@Richard Sessoms @Charlie Ryan Richard is right.  The message from the cockpit to the passengers on Persian Gulf airlines is very often one with a distinctly American accent.

Geoff Aronson

Airlines are among the most regulated of industries.  Obviously, for safety reasons much regulation is necessary. Still, like any highly regulated industry, the major players consistently lobby, wine and dine, or just whine to government for special breaks - meaning relief from competition. And now the government wants to put the internet on the same plane so that Comcast, Verizon, Time Warner etc can pour money into legislators pockets as service is flushed down the toilet.

Mike George

Am I correct that foreign airlines are prohibited from operating domestic flights in the US?  Is that under consideration for change? 

Robert McIver

@Mike George Here's a short piece from the Dept of Transportation (one page) that confirms your query. http://www.doi.gov/oia/igia/2011/upload/20-AviationCabotageDOT.pdf

Robert Yuna

A postscript to my earlier rant:  My experiences with domestic, long-haul carriers vs Gulf carriers does not for the most part include flight crews.  They do the best they can with what they have. Flying back north on an AA "business-class" flight from Grand Cayman, there was no food, just a wider seat for the extra money. But the flight attendant dug up a giant cookie  and warmed it up in the microwave to try to improve my experience with AA.  He probably would have gotten busted if his bosses had found out.  On the other hand, I watched an Emirates senior flight attendant (different color cap) spend about 10 minutes with a near-hysterical, older woman who was terrified to fly. After  talking down the older lady, she was laughing and giggling when only 10 minutes earlier, the senior was near hysterical. A wonderful display of professionalism by the Emirates flight attendant. 

Alonzo Quijana

@Robert Yuna "On the other hand, I watched an Emirates senior flight attendant (different color cap) spend about 10 minutes with a near-hysterical, older woman who was terrified to fly.” On a U.S. carrier the old woman would have been restrained in her seat, the plane would make an emergency landing, and federal agents would have carted her off for arraignment and indictment for interfering with a flight crew. 

Robert Yuna

@Alonzo Quijana @Robert Yuna I don't know about that.  But the Emirates senior flight attendant (this was in Karachi a few years ago) did a remarkable job without raising her voice, respecting the older woman's humanity while calming her down.

LISA BAYARD

I say bring on domestic Emirates flights!  Let the United CEO fly that airline into history.

Nevdeep Gill

Absurd. They want government intervention to help them create monopolies, the same thing that they are accusing the Gulf carriers of doing! It's not bad enough that they pay a pittance, provide no service and charge exorbitant fees, all for what? Annual bragging rights at Davos!

Robert Burns

Cry me a river, UAL, AA and DAL! This is laughable. Does anybody remember the government bailout these three enjoyed in 2001?  What about my $1,344 flight from LGA to CMH? One hour on a crappy regional jet, same ridiculous fare on all three and these guys are worried  about"price fixing?"   How is this not price fixing AND price gouging?  C'mon, get real.   Your service stinks, your planes stink and now you want another handout form the government?   You just can't take these guys seriously.

Jens Heycke

United, AAL, and Delta provide a really crappy product at inflated prices and then use government to keep the competition away. Rent-seeking at its finest! It's not enough for them to provide a crappy service. They have to make sure that you can't get good service any where else. Instead of wasting money on "forensic accounting" UAL, DAL, and AAL should invest in repairing their rundown regional jets and upgrading their shoddy service.

Tim Haines

I laughed when I read the US carriers are worried about jobs being shifted overseas.  That is really funny.  After all, they are those who offshore their own maintenance.  These corporations can't be taken seriously.

jerome rathskeller

@Tim Haines "Where are you????India? Can i have someone who speaks English???????

Robert Yuna

I hate to say it but my experiences flying with Persian Gulf airlines, Emirates in particular,  are much better than flying on domestic airlines.  Newer and cleaner planes, friendlier flight crews and airports that are increasingly superior to many of ours.  I flew out of Lahore several years ago on what was probably the first 777 that United ever bought or leased.  Half the buttons didn't work on the seats which were not especially clean.  The flight attendants were friendly enough but seemed to be exhausted.  This sort of experience repeated itself over and over through India and west Africa.  Oh boy.  Just what we need:  Flying on 767's on long-haul flights with lousy or non-existent wi-fi for another decade. 

Marc Ferrandino

@Robert Yuna I could not agree more. I live in Dubai and fly with Emirates everywhere. The rewards programs are insanely better, the customer service is unparalleled,and they also are understanding of necessary changes. I booked a flight for the summer Paris to New York for one leg with American and needed to cancel 24 hours after I booked it due to a scheduling mishap. American would not even consider the cancellation even though fares jumped 20 percent. The same situation happened with Emirates and they refunded my flight right away no questions asked. The U.S. Airlines are completely behind the curve and should be punished for their disregard for customers and if it is the Middle Eastern carriers who offer a more valuable overall exerience then they should be the ones who get the customers. If there is any sector that should avoid protectionism it should be this one!

Richard Sessoms

@Marc Ferrandino @Robert Yuna I can't agree more as well. I have lived in the Middle East and SE Asia for many years and if I can ALWAYS fly either Emirates or Qatar Airways. I still have my Qatar FF account even though I am now in the USA. You can tell a difference in service right away from a Unionized American Airline to a ME Airline. On average the American flight attendants are down right rude, while the ME ones are usually very good. The American Airlines still use old planes from 20years ago on long distance and regional flights in the USA. While almost all the planes even on a 1-2 jump between countries are fairly new. 

Tom Fisher

Right.......... Atlanta hasn't done anything for Delta......

Sats Sats 21 hours ago

US Airlines only wants to end the tie up with gulf airlines just to make money. Once the tie up ends they will jack up the prices for international flights which just kills the customers travelling abroad. Gulf airlines are comfortable and efficient flights to Asian countries. One doesn't have a 5-8hr layover when travelling to Asia unlike US based flights. Because of shorter layovers you are at least not travelling for more than 30hrs door to door. 

Tom Clark

United has done everything possible to create a miserable experience that can only be avoided by paying huge fees. All three are making record profits while providing less and less on smaller, jam packed planes. I choose the Gulf carriers every time. They are comfortable, fair and efficient. If UAE wants to subsidize my transportation, it's fine with me.

jerome rathskeller

@Tom Clark United wants your flight to be miserable even when its not necessary.

D Dykes

So I'm going to make your traveling experience more and more painful by shrinking your seats, cutting out upgrades, and cutting back on the number of seats that you can get with those cherished frequent flyer miles..... But can you do me a big favor, and call your congressman to complain about how awful my competition is....you know, the ones who still have bigger seats, easily available upgrades, and great service?  The one's I can't compete with? Seriously?  I doubt they'll get a lot of support from the public....

Richard Sessoms

@D Dykes They are also going after and suing the founder/operator of skiplagged as well due to him figuring out a algorithm that usually means less money for us the costumer.

Andrew Terhune

If the Persian Gulf carrier can fly me cheaper, why would I be opposed to that? IF their governments want to subsidize them for my benefit, by all means let them.

Nathan Katogir

Oh please! Hey Delta, AA and United, sit tight while I play my microscopic violin for you. The experience in flying you guys and say, Emirates, for instance, is like night and day.

Scott Gorham

You're missing the point. The way these Gulf carriers provide perceived better experience is because they are subsidized by their governments. Level the playing field and we will see how long these Gulf carriers provide the same service and experience. While we're waiting many US jobs will be lost.

Matthew Zobian

@Scott Gorham That's just not true. The "subsidies" identified are normal state support enjoyed by US airlines; this is why the Persian airlines are standing fast and why US airlines aren't getting anywhere with their argument. US airlines (and airports!) are just the pits; they need to reform to survive. Dumb union contracts aren't helping.

jerome rathskeller

@Matthew Zobian @Scott Gorham Obama loves this. His dream of the US becoming a third world state is coming to fruition.

David Walton

@Scott Gorham Who gets to decide what a level playing field looks like?  The us does the same thing with farm aid; basically pushed Mexico out of the corn business. How can the U.S. go to the Gulf with this when we pioneered this type of program? So, the level playing field has turned out to be whatever a government deems worthy of subsidizing and what the customer deems a better deal and experience.  If it where up to the likes of those running AA and united, we would all be flying around in big caged cargo holds.

Benjamin Cahlamer

@Scott Gorham Except for the other missing piece to this equation which is the codesharing agreements between these three airlines and countless European, Asian and Australian airlines.  So much so, that the lines between who is stealing whose passengers is no longer transparent.  Let the Gulf operators in, subsidized or not.  I'm happy that the schlocks from our big three are getting a run for their money.  Serves them right for devaluing all but their richest customers. No one seems to be complaining about Richard Branson 

J Blass

Didn't Branson have to sell Virgin Atlantic to a U.S. carrier to keep it afloat? I mean, airborne?

Michael Wiggins

@Scott Gorham I seem to recall numerous articles that talk about all the money the US airlines are making from fares not adjusted for current fuel prices, making huge profits by gouging passengers for extra bags, food, paying to be at the head of the line, making it more and more difficult to use frequent flier miles, etc. I believe in capitalism and, by association, making profits.  But whining to Congress because some new guy on the block is providing services that are FAR more attractive than they will deign to provide is anathema and hypocritical to the capitalistic model.  If anything American, United and Delta should be investing their profits by outfitting their international routes with planes and services that will put the likes of Emirates and Qatar to shame.  But you KNOW they won't, and so will shoot themselves in the foot. Reminds me of American Airlines going to Congress, many moons ago,  trying to prevent upstart Southwest Airlines from operating out of Texas.

J Blass

There have been articles published here about how US airlines are upgrading their fleets from profits.

Your statement on "gouging" shows that you are hardly a capitalist. Airplanes are full, why should fares be reduced? US government guarantees loans to foriegn carriers to purchase aircraft produced in the US and used to compete against US carriers who don't get the same rates. Government's tax the hell out of US airline passengers, that's the issue that is politically correct and allows the subsidy talking points to exist. Subsides in any industry are not free market capitalism, but I can't wait to see Southwest try to compete when Emirates is flying B777 between Dallas and Midway with a full meal service against a dumpy 1960‘s vintage 737.

charles fritz

@Scott Gorham Scott, how much subsidy was paid to UAL, and is on-going by Chicago for just their move out of the suburbs? DAL and Atlanta and AA? This is just one item and I'm sure there are thousands of hidden or 'concealed' subsidies.

CHARLES T GOODNIGHT

@Nathan Katogir right on. These US airline mergers have been a disaster for all customers. Service is terrible on Continental (United), delays are the order of the day, seating does in no-way compare to the UAE airlines, employees are impolite. Every misery experienced on Continental has been brought to United. After 35 years of being their customer I'm giving up. That Continental CEO is an unmitigated disaster. And now they want government intervention to aid their price fixing. I agree, let these three Mid-Eastern lines operate in our domestic market

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