July 11 - Delta Repudiates US Open Skies Policy


Republished With Permission From Aviation Daily.


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Delta Repudiates US Open Skies Policy


By Kevin Mitchell

On July 11, the US State Department hosted a silver anniversary celebration for the unquestionably successful bipartisan Open Skies policy. Open Skies has delivered on all its promises of expanded competitive choice for consumers; speedier industry business model and service innovation; new first-time non-stop international air service access for communities; and US economic expansion. 

However, not everyone agrees that Open Skies should continue to guide US international aviation policy. Delta Air Lines (Delta) has benefited enormously from Open Skies; its antitrust immunized global joint ventures with SkyTeam alliance partners and Virgin Atlantic could not exist without it. Nevertheless, on the eve of the celebration, Delta denounced Open Skies saying the airline instead admires and supports Canada’s protectionist, managed-competition policy. 

Delta’s repudiation of Open Skies came in a video chronicling why it believes Emirates Airline, Etihad Airways and Qatar Airways - the Gulf Carriers - threaten US airlines. Specifically, Delta pushes Canada’s so-called “Blue Skies” policy as the model that the US should implement with countries like the United Arab Emirates and Qatar that have highly competitive, guest-centric airlines. 

It is tempting to chalk this up as another example of Delta having a soft spot for Canada. After all, recently, Delta spurned Boeing accepting a heavily subsidized deal from Bombardier to purchase 100 of its C Series CS100 aircraft. 

That transaction resulted in an anti-dumping complaint filed with the US Government. Moreover, Delta previously relied on Canadian export-credit financing to purchase Bombardier aircraft - even though it stridently opposed such financing by the US Export Import Bank that supports US built aircraft and aerospace manufacturing jobs. Delta’s public policy pronouncements are undeniably rich!

However, Delta is not supporting President Trump’s highest aviation priority - air traffic control reform based on the NAV CANADA model. Instead, it reflects two faces of Delta. 

One face warmly embraces state-funded airlines, government protection and subsidies when it benefits them. For instance, Delta is nurturing its $450 million investment in China Eastern, China’s most heavily subsided state-owned carrier, and benefiting from its leadership role in the SkyTeam alliance where 75 percent of members are state-owned carriers. 

The other face recently declared Delta’s Washington priority as: “State-owned enterprises and the need for our government to protect U.S. jobs and promote fair trade, not free trade.” That is code for Delta’s political campaign against the Gulf Carriers, and its selective indignation toward state-owned carriers. Canada just happens to have a protectionist aviation policy that conveniently fits this narrative.

Blue Skies Even given all that insincere history of public-policy pronouncements and transactions, it is still deplorable that Delta would champion Canada’s Blue Skies model given that it is the antithesis of 25 years of US Open Skies policy. The Canadian policy represents a managed-competition scheme to protect Air Canada to the detriment of consumers, communities and the national economy.

For consumers, Blue Skies is a disaster. Kiwi.com recently published an airfare analysis ranking the price of full-service long-haul and international flights in 80 countries. Canada finished 77th. Consumers in 3 countries were worse off than those in Canada suffering under the Delta model. That airline obviously sees promise in the Canadian commercial protectionism model to grow record-setting profits even more.

For communities, travelers in Vancouver go in droves to Seattle to access Emirates’ global network given it has been denied access to Vancouver despite strong community support. As to airports in Buffalo, Rochester and Syracuse, try to find a long-term parking spot that does not have a car with a Canadian license plate on it. Canadians flock to the US for their air travel needs because Blue Skies has succeeded in stifling competition, driving up fares and inflating Air Canada’s profits.

Let’s toast US Open Skies policy on its silver anniversary and reject Delta’s invitation for US consumers to sing the Canadian Blues. _______________

Kevin Mitchell is Founder of the Business Travel Coalition and OpenSkies.travel.

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Opinions expressed are not those of Aviation Daily or Penton.

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