Apr 12, 2017
Why Middle Eastern Airlines Are Good for American Businesses
American, Delta and United Airlines have been trying for years to shut down Open Skies policies and keep Emirates, Etihad and Qatar Airways from adding new flights to the U.S. They should be careful what they wish for.
More flight options, and therefore better price competition: That’s music to the ears of trans-Atlantic flyers. More international travel spending, millions of new American jobs and greater tax revenue for communities nationwide: That’s music to the ears of the Trump administration, according to many public statements.
The entry of airlines including Emirates, Etihad and Qatar Airways into the U.S. market, made possible through bilateral Open Skies agreements, has brought all of these benefits to flyers and to the U.S. economy. They’ve directly created jobs in the manufacturing sector because they purchase American-made planes. They’ve brought millions of new travelers to the U.S. from previously untapped markets, creating yet more jobs in the travel sector.
Unfortunately, some special interest groups want to throw that all away.
Even if you have not yet flown with these Middle Eastern airlines (often collectively referred to as the Gulf carriers), you’ve likely heard about them by now. But for almost two years, they have been subject to attacks from the Big Three U.S. airlines, American, Delta and United (which has had its own issues recently). Those airlines, along with their allies, have formed a group named (ironically) the Coalition for Fair and Open Skies.
This group has heavily lobbied federal officials for a retroactive freeze on service from the Gulf carriers—which would not only prevent them from adding flights but would cancel some recently added routes that now serve thousands of passengers. Though the Obama administration resisted the Big Three’s calls to do so, they are now taking advantage of a new administration to plead their case anew.
The Big Three’s crusade has made a tremendous amount of noise in the media, and even misled some members of Congress. Members of the New York-New Jersey congressional delegation recently sent a letter to President Trump asking him to stop Emirates’ new round-trip flight between Newark and Athens, Greece, despite the fact that their own states stand to benefit greatly from the addition of such new flights.
However, one of the most oft-repeated arguments against the Gulf carriers—that their flights force domestic carriers to cut routes and threaten American jobs—is the most easily refuted. In 2014 alone, thanks to our Open Skies agreements with Qatar and the U.A.E., Emirates, Etihad and Qatar Airways brought 1.1 million new international visitors to U.S. destinations. Those visitors contributed more than $4.1 billion to the nation’s GDP. More important, they supported nearly 50,000 American jobs and fueled essential public services such as schools and fire departments, to the tune of $1.1 billion in federal, state and local tax revenue.
Those benefits weren’t limited to the cities where the Gulf carriers flew directly. These airlines have driven thousands of travelers and millions in revenue directly to U.S.-based airlines—including the Big Three themselves. According to the latest available data, nearly 30 percent of the Gulf carriers’ passengers to the U.S. transferred to domestic flights upon their arrival in the country. That number only continues to grow as new routes to the U.S. open up from previously unconnected markets in South Asia and the Middle East. We’re already seeing the ripple effect of these flights: JetBlue, in direct response to Gulf carrier passenger traffic to and from Boston, in 2014 added a flight between Boston and Detroit. More Emirates, Etihad and Qatar flights mean more passengers and incentive to add routes for domestic carriers.
Now, about those manufacturing jobs: Qatar Airways and the other Gulf carriers have committed to purchasing billions of dollars’ worth of Boeing planes, and these orders will support thousands of American manufacturing jobs across the Boeing supply chain. The Big Three, if they got their way and froze our Open Skies agreements with Qatar and the U.A.E., would put 77 percent of those orders at risk. As my organization recently wrote to secretary of state Rex Tillerson, those orders could easily then go to Airbus, shipping thousands of manufacturing jobs to Europe.
Domestic airlines, including Alaska Airlines, Hawaiian Airlines and JetBlue, and dozens of companies, including FedEx and major hotel chains, agree that Emirates, Etihad and Qatar Airways’ entry into the U.S. market is good for America. The Big Three’s stance against them hurts our markets, hurts workers and needlessly deters travel.
Open Skies is good for American businesses like Boeing, for domestic airlines and thousands of hotels, local retail stores and restaurants. The agreements have expanded flight options, lowered airfares for travelers and brought jobs and international visitor spending to places across America. President Trump would be wise to protect American workers by preserving Open Skies.