Home Page 2018-01-16T22:22:22+00:00

About The Issue

What Are Open Skies Agreements?

They are agreements between the United States and other countries that create open, competitive markets for international air travel. They enable airlines, not governments, to make decisions about routes, capacity, frequency, and pricing of their services, based on market demand. Open Skies agreements promote competition in the aviation sector, increase choice, and reduce costs for consumers while also facilitating exports for U.S. businesses and enhancing U.S. national security.  Since 1992 the United States has entered into more than 100 Open Skies agreements with countries ranging from Germany to Singapore to Chile and Uganda. For a full list of the United States’ Open Skies agreements, click here.

What Is The Controversy I’m Hearing About?

In early 2015, United Airlines, Delta Airlines, and American Airlines (known as the legacy carriers) alleged that three rapidly growing airlines based in Qatar and the United Arab Emirates (UAE) – Emirates Airline, Etihad Airways, and Qatar Airways – have received government subsidies that contravene the U.S. Open Skies agreements with these two countries. The legacy carriers have demanded that the Administration freeze new routes from Qatar and UAE to the United States and request consultations under its Open Skies agreement with the two countries.

Is There Another Way To Resolve The Controversy?

There is a procedure administered by the Department of Transportation under the International Air Transportation Fair Competitive Practices Act (IATFCPA) to properly address concerns over any anti-competitive, discriminatory, predatory or unjustifiable activities by a foreign government or foreign airlines against a U.S. airline. The procedure is rigorous, evidence-based, and subject to the Administrative Procedures Act. If the legacy carriers were confident in the merits of their claims, they would have utilized IATFCPA instead of opting for an ad-hoc political process.

Where Does USAOS Come Down On This?

We disagree with the demands of the legacy carriers and have called on the Administration to reject them. Open Skies agreements save $4 billion for passengers on U.S.-international routes annually, bring billions of tourism dollars into the U.S. economy, and have helped expand domestic airline routes. Furthermore, the United States’ network of Open Skies agreements have bolstered U.S. national security by enabling carriers to transport U.S. military equipment and troops to and from hot zones, such as Iraq and Afghanistan.

It is critical to underscore that the legacy carriers do not speak for all, or even most, U.S. airlines – which is exactly why our coalition came together. In fact, if implemented, the legacy carriers’ demands would endanger the network of more than 100 U.S. Open Skies agreements –and the economic and national security benefits that come with them. Acceding to the legacy carriers would open the door to retaliation – and questions about U.S. subsidies to its own airlines – and raise questions about the United States’ commitment to its other Open Skies agreements.

Just The Facts

Economic Benefits Of Open Skies Agreements

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Passengers save approximately $4 billion annually on U.S.-international routes thanks to Open Skies agreements.
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Full air liberalization would lead to a 16 percent increase in air traffic, and support an additional 9 million aviation and industry related jobs.
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In 2014, the Gulf carriers alone brought 140,000 international visitors to the United States, who spent nearly $1 billion and generated over $2 billion in economic output.

National Security Benefits Of Open Skies Agreements

Open Skies allows U.S. airlines to maintain global delivery networks to transport troops and vital supplies for the U.S. military. Since 1991, commercial carriers have transported almost 40% of the equipment, supplies and food to support operations in Iraq, Afghanistan, and the Persian Gulf and more than 90% of U.S. forces to and from Iraq.

  • FedEx operates a Memphis to Dubai flight four days per week, which the Department of Defense (DOD) used to transport within 48 hours much needed cargo during the peak of the U.S. troop surge in Afghanistan.
  • Atlas Air Worldwide transports foods and critical life-supporting items like blood and blood products to support ongoing military operations in Iraq, Afghanistan and the Persian Gulf.

U.S. Airline Benefits Of Open Skies Agreement

Open Skies agreements enable U.S. airlines to grow. Foreign airlines bring thousands of passengers to the United States, creating demand for connecting flights for smaller U.S. airlines. Collectively, USAOS transports approximately 42 million passengers annually, ships nearly 8 million tons of cargo, and employs approximately 350,000.

  • Under U.S. open skies agreements U.S. carriers have been able to establish new routes:
    • Hawaiian Airlines established service to Seoul and Auckland under U.S. Open Skies agreements with Korea and New Zealand
    • JetBlue Airways now provides service under Open Skies agreements with Colombia and Jamaica
    • JetBlue Airways also was able to initiate service between Boston and Detroit, a route that was previously served by only one carrier, due to the number of international passengers arriving in Boston thanks to Open Skies.

Myth Vs. Fact

MYTH #1: This Dispute Pits U.S. Airlines Against Gulf Airlines.

FACT: United Airlines, Delta Airlines, and American Airlines (known as “the legacy carriers”) do not speak for all U.S. airlines. In fact, multiple passenger and cargo airlines, including Atlas Air Worldwide, FedEx, Hawaiian Airlines, and JetBlue Airways disagree with the claims and demands of the legacy carriers. This is not U.S. Airlines vs. Gulf Airlines, this is a small group of big U.S. airlines seeking to restrict competition, against the interests of other U.S. airlines, the U.S. travel and tourism industry and U.S. consumers.

MYTH #2: The Alleged Subsidies Received By The Gulf Airlines Breach Open Skies.

Fact: The only part of the Open Skies agreements that provides any remedy against subsidies is one that allows a government to intervene if a foreign airline is charging “artificially low” fares. The legacy carriers completely ignore this provision; they do not even allege much less prove that the Gulf carriers are charging such fares. Moreover, when the U.S. government asked the legacy carriers to name a specific breach of Open Skies, they failed to identify a single provision. Thus, the legacy carriers have not established that the alleged subsidies, even if assumed to be true, breach Open Skies.

MYTH #3: Freezing New Routes And Opening Consultations Under Open Skies Poses No Risk Of Retaliation.

Fact: This action would not only reduce the number of foreign passengers arriving in the United States, with the attendant economic harm, but also likely provoke the UAE and Qatar to impose their own caps on U.S. airlines. Such retaliation would mean serious harm to U.S. airlines and could impede U.S. exports and disrupt supply chains, as well as cause significant delays in the transportation of essential supplies for the U.S. military. Moreover, the action proposed by the legacy carriers could prompt other U.S. Open Skies partners to assert subsidy claims against American carriers and raise questions in the minds of existing and future partners about the U.S. commitment to Open Skies.

MYTH #4: The Growing Presence Of The Gulf Carriers In The U.S. Market Is Harmful To The U.S. Economy.

Fact: The Gulf Carriers have contributed to U.S. economic growth. In 2014, the Gulf carriers alone brought 140,000 international visitors to the United States, who spent nearly $1 billion and generated over $2 billion in economic output. These visitors play an important role in tourism, business sustainment, and job creation. Freezing new routes and invoking Open Skies to address the demands of the legacy carriers puts these gains at risk. More generally, the United States’ network of Open Skies agreements save passengers on U.S.-international routes approximately $4 billion per year and enable U.S. airlines to maintain global delivery networks to transport troops and vital supplies for the U.S. military. Full air liberalization of the skies through additional Open Skies agreements would create an additional 9 million U.S. jobs.

MYTH #5: The Gulf Airlines Are Unique Among Global Carriers In The Assistance They Receive From Their Home Governments.

Fact: U.S. Airlines, particularly the legacy carriers, have been the beneficiaries of direct and indirect government subsidies. They include the exception of the legacy carriers and their foreign partners from U.S. antitrust laws and lenient bankruptcy laws that have allowed all the legacy carriers to reorganize their operations and receive indirect subsidies through filing for Chapter 11. In addition, the United States prohibits foreign enterprises from owning a controlling share in U.S. passenger airlines, a rule that is not found in many other countries and that limits competition and protects U.S. airlines’ revenues in the richest aviation market in the world. If the United States is going to invoke Open Skies over subsidies, it must be prepared to defend its own practices.

MYTH #6: It Is Appropriate And Effective To Address Airline Subsidies On A Bilateral Basis.

Fact: An international review of airline subsidies may well be in order. But such a review should involve all relevant countries and consider all forms of governmental support. This approach is consistent with the longstanding U.S. policy of negotiating subsidies rules in multilateral fora, for example, the World Trade Organization, and not through bilateral arrangements, which would give non-participating countries an unfair advantage. This policy should apply equally to aviation, where the market is global and many governments provide various forms of financial support.


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Who We Are

U.S. Airlines for Open Skies (USAOS) is a coalition of four U.S. passenger and cargo carriers – Atlas Air Worldwide, FedEx, Hawaiian Airlines, and JetBlue Airways – in support of the United States’ Open Skies agreements, which promote U.S. jobs and economic growth. Collectively, USAOS members transport approximately 42 million passengers annually, ship nearly 8 million tons of cargo, and employ approximately 430,000 people.