262 House lawmakers side with airlines in Open Skies dispute

A bipartisan group of 262 House lawmakers is pushing the Obama administration to wade into a dispute over foreign airline subsidies that has roiled the U.S. aviation industry. 

Unions that represent parts of the U.S. airline industry have alleged Middle Eastern airlines like Qatar Airways, Etihad Airways and Emirates Airlines have received more than $42 billion in subsidies since 2004.

The lawmakers said Thursday in a letter to Secretary of State John Kerry and Transportation Secretary Anthony Foxx that the Obama administration should investigate the subsidies because U.S. airlines say the payments violate the spirit of the Open Skies agreements between the U.S. and the governments of Qatar and the United Arab Emirates, which own the Gulf carriers. 

{mosads}”We are concerned that Qatar and the UAE are using these subsidies and other unfair practices to distort the market in favor of their state-owned airlines, contrary to U.S. Open Skies policy,” the lawmakers wrote. 

“These actions artificially boost these state-owned carriers and undermine the principles of open competition essential to the airline industry,” the letter continued. “According to available research, each daily international roundtrip frequency lost/forgone by U.S. airlines because of subsidized Gulf carrier competition results in a net loss of over 800 U.S. jobs.” 

The fight over the Open Skies agreements has exposed a rift between airlines and travel and consumer groups that argue U.S. carriers are trying to prevent competition for international flights.

Unions that represent U.S. airlines workers have formed campaigns to pressure the Obama administration to question the Gulf carrier subsidies. 

Travel industry and consumer groups have, meanwhile, accused the airlines of trying to reduce competition for international flights. 

The Obama administration said earlier this month that it’s launching a review of the airline industry’s claims — far short of the full-scale international negotiation the U.S. airline industry has called for.

The administration has said it is taking a look at the allegations against the Middle Eastern carriers because they have been “asserted in a publicly available report, are of significant interest to stakeholders and all three federal agencies.”

The decision was seen as a victory for U.S. airlines, but the lawmakers said the administration should request the full consultations the U.S. government is entitled to under the Open Skies agreements that have been in place since the early 2000s.

“The subsidies that Qatar and the UAE have provided to their state-owned carriers have led to market distortions and unfair competition in international aviation,” the lawmakers wrote. “Failure to address these practices will lead to significant job losses in the United States and set a dangerous precedent that could lead to further harm to the U.S. airline industry and the broader U.S. economy.”  

Travel groups dismissed the show of support for the airlines’ position in the Open Skies debate as a byproduct of “limitless lobbying” by the industry. 

“The limitless lobbying resources of airlines and their unions are clearly going to allow them to be heard, but we remain convinced that the inarguable merits of keeping Open Skies intact will win the day,” U.S. Travel Association Senior Vice President of Public Affairs Jonathan Grella said in a statement. 

“Air passengers are already suffering because competition and choices have been virtually wiped out of the marketplace by airline consolidation,” Grella continued. “Plus, we haven’t heard anyone dispute the reality that breaking Open Skies agreements would drastically harm the overall U.S. economy and jobs—and likely have a chilling effect on all of the trade and security agreements the U.S. has negotiated in good faith. And all of this as the Big Three [airlines] are enjoying record profits anyway.” 

-This story was updated with new information at 7:24 p.m.