Airline CEOs: Subsidized Gulf airlines are violating trade agreements, threatening US jobs

Doug Parker, Ed Bastian and Oscar Munoz

For decades, the U.S. aviation industry has served as an economic engine in every state, creating jobs for millions of Americans and building business opportunities across a wide range of industries. We’re proud that the three airlines we lead are an integral part of this story.

But in recent years, two foreign countries have thrown a wrench into this engine. For over a decade, the United Arab Emirates and Qatar have violated trade agreements with the United States by funneling over $50 billion in subsidies into their government-owned airlines — Emirates, Etihad Airways and Qatar Airways. These state subsidies are destabilizing the global airline industry and threatening to undermine our nation’s entire system of trade enforcement. Left unchecked, they send a signal that other countries can ignore our trade deals and trample upon our workers without consequences.

Thankfully, last year President Donald Trump negotiated new agreements designed to end these trade violations, mandate financial transparency and restore fair competition. But before the ink was even dry, these countries that are meant to be our partners were looking for loopholes.

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Qatar is perhaps most blatantly disrespecting its January 2018 agreement. The country pledged that its airline would not launch any flights directly between the United States and Europe. It quickly shrugged off the commitment by investing in a failing regional Italian airline and rebranding it as Air Italy, which is now being used as a proxy for new subsidy-backed routes between the U.S. and Italy.

To be clear, U.S. airlines are not opposed to competition. We compete each day for the business of millions of travelers, whether our rivals are large, small, private or government-owned. But what’s happening with the Qatar and UAE airlines is not fair competition.

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Subsidies allow these carriers to fly money-losing flights in a way no rational commercial airline could afford. It is an advantage that no airline — no matter how big — can reasonably overcome. Ultimately, it’s U.S. airline workers who pay the price.

Qatar Airways Airbus A350

President Trump campaigned on a platform of defending American workers from bad deals and unfair trade practices. By violating their Open Skies agreements, Qatar and the UAE are putting over 1.2 million American jobs in jeopardy. It isn’t just the hard-working pilots, flight attendants and ground crews whose livelihoods are at risk; it is everyone who depends on the economic engine that the aviation industry creates for our country. An economic analysis we submitted to the government shows that for every long-haul international route a U.S. carrier loses or forgoes due to subsidized Gulf carrier expansion, 1,500 American jobs are lost.

It also raises questions about how the United States should deal with partners that openly undermine trade agreements. In any business, you wouldn’t stand by and do nothing while the other side refuses to comply.

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In light of actions by Qatar and the UAE over the past year, the Trump administration likely now sees that they have no intention of complying with their longstanding Open Skies agreements or last year’s deals.

Don't reward bad behavior

Aside from Qatar’s blatant actions regarding Air Italy, we’re also seeing obvious inaction on the part of both countries when it comes to financial transparency. In fact, the Gulf carriers are less transparent today than before the UAE and Qatar signed their respective agreements.

Failure to enforce these agreements sends a message to other countries that they can take advantage of the United States without consequences. That can’t be our position. If Qatar and the UAE aren’t willing to uphold their side of the deals, the United States should consider removing itself from these two Open Skies treaties altogether.

This administration knows a trade violation when it sees one. The United States must act decisively to hold Qatar and the UAE accountable. Failure to do so would reward bad behavior and signal to other countries that they too are free to exploit American workers. That is a dangerous precedent that our airline workers and our country cannot afford.

Doug Parker is the CEO of American Airlines. Ed Bastian is the CEO of Delta Air Lines. Oscar Munoz is the CEO of United Airlines.

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This article originally appeared on USA TODAY: Trump must hold Gulf airlines accountable on trade, jobs: Airline CEOs