US airlines have been making a fuss that Emirates, Etihad, and Qatar receive subsidies and it’s unfair they should have to compete against those carriers. (Subsidies for US airlines are, of course, ok.)
The airlines largely don’t compete with each other now, with a couple of flights to Dubai between them the US carriers and a couple of flights to India.
The big worry is an expansion of service like Emirates’ New York – Milan flight. Although ironically, of the 3 the weakest case they have is against Emirates.
While their eye is on the 3 big Gulf carriers (and not on Kuwaiti which flies New York – London, or Delta partner Saudi), the real competitive risk that they face comes from low cost carriers who will outcompete US airlines on price and where that competition can’t be explained away as subsidized.
RyanAir’s board approved a plan to operate across the Atlantic and could be flying to as many as 14 US cities within 5 years.
- RyanAir often makes bold pronouncements when they’re not in the news (like cabins with no seats and pay toilets)
- This plan rests on acquiring aircraft that they do not yet have orders for.
- 14 cities seems aggressive, especially without partner feed.
Nonetheless, it’s usually Singapore or Emirates that US airlines fear when the topic of foreign ownership of US carriers comes up. The thought it they’d have to compete with really great service and amenities on business routes. When the most likely scenario is they’d compete against RyanAir, you’d have growth in the sector currently dominated by Spirit and Allegiant.
That’s competition that the US airlines will have a hard time beating back, except with loyalty programs and corporate contracts — while US airlines have spent the last couple of years alienating frequent flyers and corporate buyers.
When competitors like Norwegian enter the picture the airlines’ game is to go political. But they won’t be able to fight that battle on every front.