March 5 - Questions BIG 3 Need To Answer In Seeking Gov. Protection From Foreign Airlines

Business Travel Coalition today posed the following questions for the BIG 3 U.S. airlines to answer as they push the Obama Administration for commercial protection from foreign airlines with better connections, new aircraft and superior customer service.

1 - Is the report the BIG 3 U.S. airlines are releasing to the public the exact same report provided to U.S. and EU government officials?

2 - The BIG 3 withheld the 55-page document from the three carriers that they are accusing of having received state subsidies. If the BIG 3 were confident of their facts, why ambush them -- as opposed to giving them a reasonable chance to evaluate the data in the report before they released it to the media? Given that fact, should not the Gulf carriers be given a decent amount of time to digest this previously secret report so they can have a fair chance to respond?

3 - The BIG 3 say the problem is supposed state subsidies, but did they also not lobby the U.S. DOT and Congress to block additional services for U.S. consumers by Norwegian International even though there was no claim they had received state subsidies?

4 - Have the BIG 3 benefitted from Open Skies agreements in other countries where there are state owned airlines?

5 - How can the BIG 3 make the argument that they are unfairly harmed by Open Skies agreements with a few countries even as they seek greater access to countries like Japan?

6 - If airlines in other countries that have open skies agreements with the U.S. felt harmed by those agreements because the BIG 3 were expanding their market share, what would the BIG 3 do (or say) if they asked their governments to renegotiate or cancel those deals with the U.S.?

7 - If the Administration agrees with the BIG 3 and shuts down new air service by the three Gulf carriers, will Turkish Airlines be the next target? Turkey is building the world's largest airport near Istanbul and Turkish Airlines has experienced phenomenal growth in recent years to many of the same markets the BIG 3 are complaining about with the Gulf carriers. 

8 - The BIG 3 complain about losing market share due to Open Skies agreements in one part of the world while seeking more U.S. airline access to other markets. Isn't that hypocritical?

9 - There are many airlines in the world owned by governments that have built new airports and otherwise support their airlines’ success. Why not cancel their Open Skies agreements - or is just that they aren't yet winning market share from the BIG 3?

10 - What is preventing the BIG 3 from establishing more and better service to India and SE Asia if that is what they think U.S.-based travelers want?‎ Presumably the BIG 3 could offer a better product and service and routes that U.S. travelers would prefer, correct?

11 - So do the BIG 3 really think that these travelers would switch back to U.S. airlines if fares were equal and the travelers had the freedom to choose one of the BIG 3? Is this not all about restricting the choices available to consumers so they have to fly the BIG 3?

12 - Many American business travelers when traveling from the U.S. to Asia, the Middle East, the Indian subcontinent, countries in Africa and other destinations choose more efficient Gulf and other foreign carriers for their faster connections, newer aircraft and customer service perceived as superior to U.S. airlines. Do the BIG 3 deny U.S. travelers rate these three carriers higher than all of them in terms of customer service?

13 - For all the competitive “threat” and “harm” alleged, the BIG 3 compete head-to-head with Gulf carriers in one market and once daily – Washington Dulles to Dubai with both United and Emirates offering non-stop flights.  Isn’t this really about protecting passenger flows for the BIG 3’s European alliance partners and attempting to force connecting passengers to use circuitous routings via their less convenient European hub airports?  What is the U.S. national interest in protecting connecting passengers for Air France at Paris, KLM at Amsterdam, Lufthansa at Frankfurt, BA at London Heathrow and Virgin Atlantic at London Heathrow?

14 - The BIG 3 have attacked Emirates Airline for exercising its rights under the U.S.-UAE Open Skies agreement to start fifth-freedom service from Dubai over Milan to New York and Delta Air Lines went to the Italian courts in an unsuccessful attempt to block this new air service.  Is it the BIG 3’s contention that fifth freedom air services are inherently illegitimate or is it just fifth-freedom air services operated by foreign airlines?  Is Delta Air Lines prepared to end all of its fifth freedom services from Japan's Narita airport to other cities in Asia?

15 - The BIG 3 seem to want WTO trade principles applied to air service agreements but, air service negotiations, at the urging of U.S. airlines, have always been treated separately. Are the BIG 3 now proposing that the statute be amended to give USTR, not the U.S. State Department, the lead negotiating authority for air service agreements?  If so, what has changed since the late 1990s when U.S. airlines strongly opposed the idea arguing they didn’t want air service rights traded for bananas in multi-sector negotiations?

16 - In a CNN interview, Richard Anderson blamed the 9/11 tragedy for U.S. airline bankruptcies, and blamed countries of the Arabian peninsula for terrorist acts on 9/11.  For the representatives of American and United, do Doug Parker and Jeff Smisek support Anderson’s comments or do they repudiate them?

17 - A video posted on the "Americans for Fair Skies" website purports to describe the relationship between Emirates Airline and the Dubai government.  That video uses the word "Sheikh" thirteen times and contains caricatures that could be seen as demeaning to the Arab and Muslim community.  Did any or all of the BIG 3 play any role in the production of that video?  Have they seen it?  Do they consider it appropriate?

18 - The BIG 3 argue that low labor costs contribute to the success of the three Gulf carriers.  But what about the practice at each of the BIG 3 of relying on so-called "Regional Airlines" to provide feed to their hubs, where those Regional Airlines pay their pilots such low wages that they qualify for food stamps?  Isn't it time that the pilots at these Regional Airlines were made part of the larger collective bargaining units at the three mainline carriers?

19 - Can the BIG 3 detail how much in liabilities each was able to remove from its balance sheet and how much they were able to lower costs per available seat mile by using the U.S. government provided Chapter 11 bankruptcy process?

20 - For the representative of American Airlines, Qatar is a code-share partner and member of oneworld.  American also code-shares with Etihad.  If Qatar and Etihad are unfair competitors as alleged, why did American vote in favor of Qatar joining oneworld, and why do you continue to code-share with both Qatar and Etihad?

21 - In the last five to six years, each of the BIG 3 have become vocal practitioners of “capacity discipline” drawing down capacity at many cities, and especially at former hubs like Cincinnati, St. Louis, Pittsburgh, and Memphis.  Is their response to the cries of those communities for more services, services the BIG 3 haven’t added, just “tough?”

22 - If the BIG 3 ever succeeded in persuading the Administration to block service to the U.S. by these Gulf carriers supposedly because they enjoyed state subsidies, then if other stakeholders were to make a similar case against foreign carriers with whom the BIG 3 have alliances, would the BIG 3 agree now that they would support such efforts?

23 - How much liability did the Pension Benefit Guaranty Corporation (PBGC) assume when Delta and United airlines were able to wipe out multiple pension plans during bankruptcy? Now that both are profitable - one in record fashion - does Delta intend to take back those liabilities from the PBGC, which is some $40 billion in the hole after years of making a return and which will very likely have to be bailed out by taxpayers? How is that not a competitive advantage for U.S. airlines? In addition, would the BIG 3 agree that the ability to dump pension liabilities (ultimately on U.S. taxpayers) gives airlines an incentive to agree to higher demands in collective bargaining agreements knowing they can simply wipe the slate clean again if they need to?

24 - Reuters reported, based on information the BIG 3 provided them, that since 2008, U.S. carriers have lost 5% market share in India, apparently now due to the Gulf carriers as opposed to Air India (as was the excuse when U.S. services were halted). How much have U.S. airlines’ capacity increased or decreased, including through their alliance networks, to India in those 7 years since? How many passengers were carried in 2008 versus 2014 and what percentage of the BIG 3 total international network do those numbers represent?

25 - If the BIG 3 wanted to, could they today launch widebody, long haul services from the U.S. or through their alliance hubs in Europe to destinations such as Jaipur and Kochi, India, both of which are served by Gulf carriers? Why do they not pursue that opportunity?

26 - The BIG 3 say that they will have to cancel routes within the U.S. due to competition from the Gulf carriers. Can they substantiate that? In particular, is American, as partners with Qatar and Etihad, losing passengers or gaining passengers due to those partnerships? If gaining, would all those passengers be originating/terminating at the airports served by Gulf carriers? Can American comment on JetBlue’s letter to the Obama Administration in full support of Open Skies, which highlighted that they have launched new routes within the U.S. due to new traffic flows from the Gulf carriers?

27 - How are the BIG 3 helping the Administration's and the travel and tourism industry's overarching goal of attracting 100 million international visitors to the U.S. per year by 2021 through the BIG 3’s policy of strict "capacity discipline" coupled with their campaign to strictly limit competition by foreign carriers? Isn't it true that the Gulf carriers are providing service to the U.S. from many places that the BIG 3 underserve or do not serve at all?


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