Earlier this year Delta, United, and American took out a full page ad praising Donald Trump.
The leadership at each of these airlines has not actually been made up of supporters of the President. The only US airline CEO that vocally supported Trump’s candidacy was the head of Virgin America.
But they were trying to curry favor, to build up capital, in hopes of cashing in for their own ends. They had just lost a 3 year intensive lobbying battle to get the government to make it illegal for Emirates, Etihad and Qatar to lower airfares and to limit flights to the US by these three airlines — so consumers would have to pay more and have fewer choices — they lost.
The Obama Administration went through an extensive process — collecting public comment, examining US aviation treaties, engaging in diplomacy — and refused to take any action at all. With Donald Trump elected as President Delta declared they would have another bite at the apple. They viewed nationalist rhetoric as aligned with their policy goals and Delta’s CEO declared himself encouraged by Donald Trump.
At the end of the day the Big 3 airlines got nothing of substance.
- The Gulf carriers will publish audited financials conforming to international accounting standards. Emirates already does this. Etihad will have cleaned up its balance sheet by the time they do this. Qatar will keep getting subsidies and use the UAE/Saudi blockade as justification.
- The Gulf carriers say they aren’t currently planning to add more flights between the US and Europe. Etihad isn’t adding more flights between anywhere and anywhere these days. Qatar only flew Europe-US back when they didn’t have the aircraft to fly from Doha non-stop and owns significant stakes in airlines flying US-Europe, they are the largest owner of British Airways, Iberia and Aer Lingus and also of Air Italy.
- The agreement specifically says that subsidies aren’t illegal or improper. Which is good for Delta, American and United, because the US airlines are subsidized as well. (And by the way the paper US airline lobbyists keep referring to about Gulf carrier subsidies contained outright fabrications.)
Then in September American Airlines CEO Doug Parker signaled the big 3 US airlines wanted to re-litigate the whole thing when he claimed Qatar was cheating on the agreement through Air Italy.
- Air Italy, which they own a 49% stake in. The second largest carrier in Italy dates to 1963, when Aga Khan Prince Karīm al-Hussaynī founded its predecessor to promote Sardinian tourism. The airline became known as Meridiana in 1991.
- This majority Italian-owned enterprise took advantage of the weakened state of flag carrier Alitalia. The plan was well-known at the time the US and Qatar signed their agreement to end the dispute over the Doha-based carriers flights to the U.S. And it’s perfectly legal.
- US airlines did not complain about Qatar’s investment in British Airways, Iberia, and Aer Lingus or Etihad’s investment in Alitalia or air berlin. Those investments benefits American Airlines and Delta.
Yesterday Air Italy announced that in addition to New York and Miami service they would be adding Los Angeles and San Francisco flights.
Now the lobby shop representing Delta, United, and American — the Orwellian “Partnership for Fair & Open Skies” which lobbies against Open Skies agreements — has put out a statement. They don’t claim there’s anything illegal about the flights. Instead, the flights disrespect Donald Trump. (HT: One Mile at a Time)
With the announcement of new routes from Air Italy to the U.S., fueled by money from Qatar Airways, the government of Qatar has demonstrated a stunning lack of respect for President Trump and Secretary of State Pompeo.
Qatar Airways has received over $25 billion in documented subsidies from its government owner, in violation of the Open Skies agreement with the U.S.
When the Trump administration negotiated an agreement with Qatar earlier this year to protect American jobs and restore fair competition to international aviation, the Qatari government agreed that its state-owned airline would not launch future ‘fifth freedom’ flights to the U.S.
By exploiting its investment in Air Italy to create a loophole and dodge this pledge, Qatar has violated this agreement and the trust of the United States. What is now clear is that Qatar Airways has no intention of playing by the rules and of working cooperatively with the American government. We expect the Trump administration will take strong action and stand up for American workers in response to these violations.”
Virtually everything in this statement is a lie.
- “subsidies from its government owner, in violation of the Open Skies agreement with the U.S.” Not only doesn’t the US-Qatar Open Skies agreement prohibit subsidies, the agreement settling the dispute earlier this year explicitly recognized that.
- “the Qatari government agreed that its state-owned airline would not launch future ‘fifth freedom’ flights to the U.S.” False. They said they were not aware of plans to do so. And Qatar Airways has not done so. Everyone in the aviation world was already well aware of plans for Air Italy to do so, however. And a European-based airline flying to the U.S. from their home base is not operating a fifth freedom route in any case.
- “stand up for American workers” The U.S. unemployment rate stands at 3.7%. What jobs is Air Italy stealing? Their fleet is compromised mostly of Boeing aircraft. 47 of 49 planes they have on order are from Boeing. Delta orders primarily from Airbus. American workers’ paychecks will go much farther with greater choices and lower fares which result from competition. Standing up for American workers doesn’t mean picking their pockets and redistributing their income to shareholders of United, Delta, and American.
There’s an old legal saying, “When the facts are on your side, pound the facts. When the law is on your side, pound the law. When neither is on you side, pound the table.” And they’ve hired lobbyists to pound the table.
And it’s working, too. Here’s a letter from Ted Cruz joined by 10 other Senators (.pdf) It begins by commending the Trump administration for its actions to date dealing with Qatar. And then suggests flying to New York is ‘commercially questionable’ as though that’s legally relevant even though United, Delta, and American all fly between Italy and New York, too — and it’s by far the biggest Alitalia route.
Oddly Senator Cruz makes no mention of Los Angeles and San Francisco which aren’t served non-stop by US airlines and where US consumers clearly will benefit from the addition of Air Italy non-stops.