American Airlines Chairman and CEO Doug Parker offered an opinion piece this week in the Wall Street Journal calling on the Obama administration to do something about the scourge of low fares and flight choices that consumers have thanks to service offered by Emirates, Etihad, and Qatar.
He repeats the claim that these three airlines are subsidized (making no claim of course that major US airlines aren’t, and continuing to lump these three very different carriers together). And he contends that his airline is playing “a rigged game that has gone on too long” when it’s reporting profits of approximately $2 billion per quarter and finds itself with more cash than it can productively invest so has authorized share buyback programs this year totaling $6 billion.
His subsidy claim,
Over the past decade, the governments of the United Arab Emirates and Qatar have given their airlines more than $42 billion in subsidies—including funds for land, airport upgrades, new airplanes and government assumption of fuel hedging losses—causing significant market distortions.
The original airline document making the subsidy case turned out to be a fraud, doctoring quotes. Emirates probably isn’t subsidized, or at least may even be less subsidized than the US airlines are.
The US airlines of course have had $23 billion in pension obligations taken off their books and assumed by the federal government’s Pension Benefit Guaranty Corporation.
Just this week Mr. Parker’s American sought tax subsidies for a new headquarters building. It’s original large aircraft order came thanks to the federal government’s Reconstruction Finance Corporation. And American codeshares with Etihad and partners with Qatar through the oneworld alliance.
Not to mention the subsidy US airlines receive by not having to compete against foreign-owned airlines on domestic US routes.
Parker claims though that his calls for protectionism aren’t to benefit his own airline. It’s for the jobs.
When unfair competition forces U.S. airlines to cut service, the result is loss of American jobs. Those hit hardest are the pilots, flight attendants, ground crews, customer-service representatives and many others who support the commercial aviation industry.
The impetus for concern by the CEOs of United, Delta, and American of course cannot be ‘for the jobs’ when major US airlines outsource maintenance work and buy foreign-made aircraft. There’s nothing wrong with that, of course, maintenance work is supervised and inspected and meets the highest standards of safety.
At the same time, US airline employment is at a seven year high even as the Gulf carriers expand their presence in US markets. Indeed, airlines like Alaska and JetBlue are growing as a result of their partnerships with Emirates.
And the growth of these carriers has meant more jobs in travel and tourism, and in aircraft manufacturing, as well as trade.
It’s a cynical and self-serving piece. And, sharing a byline with the President of American’s pilots union, I can only imagine it’s designed to curry favor as he attempts to combine seniority lists for legacy America West, US Airways, and American Airlines pilots with the least acrimony possible.