May 15, 2017
Ambassador Robert Lighthizer
United States Trade Representative
Office of the U.S. Trade Representative
600 17th Street, NW
Washington, DC 20508
Dear Ambassador Lighthizer,
As the CEOs of four leading U.S. cargo and passenger airlines, we congratulate you on your confirmation as United States Trade Representative. We look forward to working closely with you on issues that affect the aviation sector, as well as the hundreds of thousands of American workers that our companies employ.
We write today as members of U.S. Airlines for Open Skies (USAOS) to express our strong support for the global network of U.S. Open Skies agreements. This network supports U.S. jobs, reduces costs for airline passengers, facilitates U.S. exports, strengthens our national security, and promotes competition in the airline industry.
During the last three decades, under the leadership of both Republican and Democratic Administrations, the United States has negotiated Open Skies agreements with more than 100 countries around the world. These agreements eliminate government interference in commercial decisions about the routes, frequency, pricing, and capacity of airline service, both passenger and cargo. They also assure the ability of all U.S. airlines to create comprehensive international networks. Open Skies thus allows airlines to deliver more efficient and cost-effective service to American consumers, businesses, and the U.S. government, including the military.
Regrettably, three large legacy U.S. airlines (“legacy carriers”) – Delta, United, and American – are making demands that would jeopardize Open Skies and reduce competition in an already overly concentrated U.S. airline market. Specifically, they are asking the U.S. government to freeze access to U.S. routes for airlines from two U.S. Open Skies partners – the United Arab Emirates (Emirates and Etihad) and Qatar (Qatar Airways). The legacy carriers claim such action is a justified response to alleged subsidies the foreign carriers have received from their home governments.
In fact, the legacy carriers are ignoring the very procedure established in U.S. law to hear such claims. The International Air Transportation Fair Competitive Practices Act (IATFCPA) permits U.S. airlines to file complaints with the Department of Transportation (DOT) that foreign governments are providing subsidies or engaging in other unfair, discriminatory, or anticompetitive practices. The process allows a full on-the-record evaluation of all of the evidence in accordance with the due process protections and requirements of U.S. administrative law. DOT is required to make a decision within 180 days.
The legacy carriers have not filed a complaint under IATFCPA, perhaps because they know they would not prevail in the context of a rigorous, evidence-based proceeding. Instead, they decided to mount a massive lobbying and media campaign to persuade policymakers to further shield their dominant position in the market, at the expense of U.S. passengers, other U.S. airlines, and the broader U.S. economy. This campaign has already dragged on for more than two years, four times longer than the timeline for IATFCPA proceedings.
The legacy carriers’ demands to freeze U.S. routes for airlines from Open Skies partners would breach the United States’ Open Skies commitments, harm U.S. airline passengers, and endanger U.S. jobs. It would reduce competition not only on international routes where the legacy carriers and their joint venture partners already predominate but also in the domestic market by stemming the flow of passengers into the United States that has enabled smaller U.S. airlines to expand service and compete with the legacy carriers. It would also endanger the global networks of U.S. cargo airlines that deliver high-value U.S. exports and vital supplies for the U.S. military around the world.
The legacy carriers’ claims that they have been injured by the Gulf airlines are unsupported by the facts. To the contrary, the legacy carriers have hired more than 12,000 new employees during the last four years. Meanwhile, their operating profits have reached record levels, nearly tripling on average since 2007.
We formed USAOS, comprised of Atlas Air Worldwide, FedEx, Hawaiian Airlines, and JetBlue Airways, to make it clear that the legacy carriers do not speak for all, or even most, U.S. airlines. Our companies, as well as other U.S. airlines not aligned with the legacy carriers, collectively employ more than 942,000 workers, almost three-and-a-half times the number of workers employed by the legacy carriers (275,000). Our coalition opposes the demands of the legacy carriers, and we are pleased to be joined by organizations representing the U.S. travel, tourism, and hospitality industries, as well as local communities across the United States, including economic development agencies and airport authorities.
Mr. Ambassador, we urge you to reject the demands of the legacy carriers and protect the invaluable Open Skies network for the reasons described above and in the attached annex. We look forward to working with you to uphold and expand the vast benefits of the Open Skies regime that has served our economy so well.
Sincerely,
William J. Flynn
President and CEO
Atlas Air Worldwide
David Bronczek
President and COO
FedEx Corporation
Robin Hayes
President and CEO
JetBlue Airways
Mark B. Dunkerley
President and CEO
Hawaiian Airlines Inc.