Several recent opinion pieces published in outlets like the Washington Times have repeated calls for the Trump Administration to reopen U.S. Open Skies agreements with two of America’s trading partners. These anticompetitive demands driven by three U.S. legacy airlines (Delta, United, and American) would damage relationships with key allies, jeopardize America’s network of Open Skies agreements, and harm U.S. consumers, travelers, and exporters along the way.
When Donald Trump ran for President, he promised to protect national security and American jobs. Open Skies agreements contribute to both, and he and his administration have done an admirable job not only upholding our current agreements, but also establishing new ones, including with Brazil.
The United States has more than 120 Open Skies agreements with partners such as Japan, the European Union, and New Zealand. These agreements eliminate government interference with air services so airlines can make decisions about routes, capacity, frequency, and pricing. By promoting competition in the aviation industry, Open Skies agreements have unleashed significant benefits for U.S. airlines, workers, exporters, and travelers.
According to a report from the Brookings Institution, Open Skies agreements reduced airfares between 37 and 47 percent. It also found that these agreements generate $4 billion in annual savings for passengers on U.S. international routes.
Open Skies agreements also increase economic activity across America. They expand international air services to mid-sized U.S. cities, such as Memphis, Portland, and Las Vegas. The benefit to these communities is huge: a single daily wide-body flight carrying predominantly foreign tourists creates $65 million in direct spending, supporting $117 million in GDP growth and more than 1,150 American jobs. These additional foreign passengers allow smaller U.S. airlines, like Hawaiian or JetBlue, to create new domestic routes to transport these passengers on connecting flights within the United States.
U.S. exporters and job creators also benefit from Open Skies agreements. These agreements allow air cargo carriers to build global transportation networks and move goods more efficiently. In fact, Open Skies agreements have been shown to reduce air transport costs by 9 percent. As a result, cargo airlines transport more than 35 percent of U.S. trade by value.
In addition to the significant economic benefits, Open Skies agreements are critical to U.S. national security, as carriers have been able to transport troops and supplies to hotspots across the world.
Aggressive efforts from the legacy carriers to lobby for changes to certain Open Skies agreements (while supporting others) is nothing new. In fact, the public affairs blitz that started during the Obama Administration has only escalated during the Trump Administration. Fortunately, an objective review of the facts has consistently found that maintaining Open Skies agreements lowers prices, creates jobs, and creates U.S. economic growth.
The importance of America’s Open Skies agreements cannot be overstated. Reopening America’s Open Skies agreements at the behest of the legacy carriers—seeking only to increase their profits—would encourage other countries to renege on their agreements with the United States for its carriers seeking a shield from competition. In an industry that directly and indirectly supports almost 10 percent of total U.S. employment, or nearly 14 million jobs, we must resist the anticompetitive demands of the largest U.S. airlines. Don’t be fooled by lopsided opinion coverage that ignores the facts about the benefits of Open Skies agreements.