March 23 - 5,747: The Credible and Bulletproof Number That Settles the Open Skies Debate

WASHINGTON, DC – and Business Travel Coalition today issued the following statement and analysis.

Delta Air Lines, American Airlines and United Airlines (“Big 3”) and their labor union partners want to have an Open Skies debate about jobs. They are acting and sounding increasingly desperate as they try to resuscitate their failed two-year-old campaign to eliminate competition from Emirates Airline, Etihad Airways and Qatar Airways (“Gulf Carriers”). It is a curious strategy given that they resoundingly lose an honest debate about American manufacturing jobs. 

However, this underscores that the Big 3’s campaign has never been about facts or wise public policy. Rather, they are hoping a combination of political muscle and hot false rhetoric supported by a seemingly limitless budget will mislead the Trump Administration into reducing competitive choice at a time air travel consumers desperately need more not fewer competitive options.

Helene Becker, Managing Director, Cowan and Company stated, “I think the industry lamenting about the Gulf Carriers are just using alternative facts. I think they really believe those false facts, and have decided that alternative facts make more sense than real facts, so why not just use those.”  

In the Open Skies debate, there is one credible and bulletproof number - the U.S. Department of Commerce (“Commerce”) jobs multiplier for aerospace exports. According to Commerce, each $1 billion in U.S. aerospace products and parts exported creates or sustains 5,747 American jobs. It is a number you won’t hear the Big 3 mention because they know it is the death knell of their “Airlines First, America Second” campaign.

It is an inconvenient truth for the Big 3, that when it comes to American aerospace manufacturing jobs related to wide-body aircraft, American workers have no better friend than the Gulf Carriers. Boeing is the single largest U.S. manufacturing exporter by dollar value and our nation’s brightest star when it comes to generating trade surpluses. Its new generation 777X will showcase Boeing’s global leadership in composites and aerospace ingenuity. 

Did the Big 3, with their pockets bulging from record-setting profits, step-up with orders to support the launch of the 777X program? No. It was the Gulf Carriers that did and they are responsible for 235 of the 306 total 777X orders. With a list price of $92.5 billion dollars, based on Commerce’s jobs multiplier, the Gulf Carriers’ commitment to the 777X program will create or sustain 531,598 American jobs, great jobs! Applying that same multiplier to the Big 3’s  “support” for the 777X, the Big 3 are supporting zero 777X-related American manufacturing jobs. A national embarrassment.

Recently, the Big 3 and their allies placed an ad in the New York Times and New York Post, which took the prize for over-the-top false-jobs rhetoric. This was no small feat given some of the whoppers they had already told. The ad claims a single daily Emirates Newark-Athens-Dubai flight will put at risk 10 million American jobs. If the Big 3 had a shred of credibility left, that hyperbole alone decimated it.

When Boeing and its workers sought a loyal and reliable partner to support the launch of the 777X, it turned to Emirates. As Emirates has done throughout its nearly three-decade-old partnership with Boeing, Emirates delivered. The airline committed to purchase 150 777X aircraft (plus 50 options) in the largest commercial aviation transaction in U.S. history with a list price of $76 billion. At the same time the Big 3 turned their backs on 777X workers, based on Commerce’s jobs multiplier, Emirates’ order will support or sustain 436,772 777X-related middle-class American jobs.   

To add insult to injury, Delta Air Lines, the ringleader of the Big 3 anti-Open Skies coalition, gave its most recent wide-body-related aerospace jobs to Airbus and its European workers. In November 2014, the airline placed an order for 25 Airbus A350-900s and 25 Airbus A330-900neos. The biggest loser from its decision to not buy American was U.S. aerospace manufacturing workers. Based on the list price of $14.3 billion, according to Commerce’s jobs multiplier, that airline’s decision cost 82,182 American manufacturing jobs. 

However, Delta Air Lines, which unabashedly claims it is a champion of U.S. jobs, when it serves its anti-competitive aspirations in the Open Skies debate, was not done turning its back on American aerospace manufacturing workers. In December 2016, the carrier announced that it cancelled an order for 18 Boeing 787-8 Dreamliners with a list price of roughly $4 billion. Over 22,000 additional American aerospace manufacturing jobs lost due to Delta Air Lines. 

While pro-Open Skies advocates make credible arguments based on the bulletproof Commerce jobs multiplier, the Big 3’s anti-Open Skies arguments are based solely on self-baked advocacy numbers designed for political sound bites rather than expressing the truth. They are running a cable television commercial that claims competition with Gulf Carriers puts 1.2 million U.S. airline jobs at risk. In considering the veracity of that assertion, the U.S. Department of Transportation’s Bureau of Transportation Statistics indicates that as of January 2017 there are only 687,000 full and part-time U.S. airline employees. 

The anti-Open Skies coalition suffers from a split personality when it comes to its accusation of U.S. jobs lost per flight due to Gulf Carrier competition. Some of the group argues the old Obama Administration talking point of 800 jobs lost while others use the juiced-up number of 1,500 tailored for the Trump Administration. Regardless of which number is used, it is just hollow political rhetoric that bears no semblance to the real world. How many Big 3 widebody aircraft are parked and how many of the crew who operate them have been furloughed? Of course on both accounts the answer is none.  

When it comes to the Open Skies debate and who to believe, I am going with the Commerce jobs multiplier. It comes from a credible source: the U.S. Government. For the good of American aerospace manufacturing jobs, I am confident the Trump Administration will too.

Let’s put American Workers First!

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