March 5 - “Buy American, Hire American”

 

“Buy American, Hire American” Argument Resoundingly Supports Open Skies, Not The Protectionist Big 3

Delta Air Lines, American Airlines, United Airlines (“Big 3”) and their allies are desperate to relitigate their meritless attempt to reduce competition by clipping the wings of Emirates Airline, Etihad Airways and Qatar Airways (“Gulf Carriers”). The Obama Administration carefully considered and rejected their competition-killing demand that the U.S. violate existing Open Skies agreements with the United Arab Emirates and Qatar by freezing those rights.

Now they are trying to resuscitate their failed campaign by turning it into a debate about jobs because they believe that will appeal to President Trump. They have even escalated their demands now calling for termination of those agreements, which the U.S. has never done before with its over 100 Open Skies partners.

As a centerpiece of their renewed campaign, the Big 3 argue that their demands reflect the views of their approximately 275,000 workers, creating the misconception that they represent the U.S. airline industry. However, U.S. Airlines for Open Skies, a coalition of FedEx, JetBlue, Hawaiian and Atlas Air Cargo, and other unaligned U.S. airlines, collectively employ over 942,000 workers - nearly three-and-a-half times more workers than the Open Skies hostile Big 3.

They claim that Gulf Carrier success is harming them and costing aviation jobs, arguing that every flight not operated, allegedly due to Gulf Carrier competition, kills 1,500 jobs. However, it is the Big 3 that is harming employment by outsourcing their own employees’ middle-class jobs.

When the Big 3 transfers a flight to an alliance partner, high-paying U.S. jobs are lost. If 1,500 jobs are lost for every Big 3 flight abandoned, how many thousands of American jobs have been sacrificed over the years at the altar of global alliances and antitrust immunity?

It appears that the only jobs the Big 3 are truly concerned about are those purportedly lost to competitors. If they transfer those jobs to alliance partners, that’s alright! As such, it’s not really “Buy American, Hire American” – it’s more like “Buy Foreign, Hire Foreign.” What hypocrisy for the Big 3 to claim they care about U.S. jobs!

There’s even more evidence of unintelligible logic. In February 2016, Delta stopped operating its Atlanta-Dubai monopoly non-stop flight. In the announcement the airline indicated the aircraft would be redeployed to the lucrative transatlantic market. Similarly, United Airlines in January 2016 pulled its Dulles–Dubai flight and redeployed the aircraft. That announcement came after JetBlue underbid United for that Fly America city-pair that will be operated by its codeshare partner Emirates. United apparently concluded that flight was no longer commercially viable if it could not charge monopoly fares to government employees and contractors. It demolishes credibility to logically assert that aircraft reassigned to more profitable routes would produce massive job losses.

Ominously, aerospace manufacturing jobs represent the fatal flaw of the Big 3’s desperate job argument. Boeing’s new 777X aircraft will showcase its global leadership in composite technology and 21st century aerospace engineering. Of the 306 firm launch orders for the 777X, 235 are from the Gulf Carriers. How many of the remaining orders were from the Big 3? Zero.

The Gulf Carriers’ 777X launch orders have a list-price value of $92.5 billion. Based on the U.S. Department of Commerce’s jobs multiplier for aerospace exports, this commitment to U.S. aerospace exports will create or support 531,598 American jobs, spread nationwide through Boeing’s supply chain of small and medium-sized companies.

Finally and tellingly of the Big 3’s disinterest in American jobs, when they do order aircraft, it appears they more often choose Airbus. Delta in 2014 replaced Boeing aircraft with an order for 50 Airbus widebodies with a market value of $14.3 billion foreclosing support for over 80,000 high-paying American jobs. Some 14 months earlier that airline ordered 40 Airbus planes no doubt costing tens of thousands of additional American jobs. In December 2016 Delta canceled an order for 18 Boeing 787 Dreamliners.

The pro-competition, pro-consumer, pro-growth U.S. Open Skies policy is a Made-in-America success story, representing the Gold Standard for bilateral trade agreements. In a debate about “Buy American, Hire American,” the Big 3’s protectionist Open Skies agenda doesn’t fly.

 

©2001 to 2017 Business Travel Coalition, Inc..