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WASHINGTON, DC: One of the last responders to the Obama Administration's call for comment following allegations made by American, Delta and United about "illegal" subsidies to Gulf carriers, is an airline coalition anchored by FedEx that opposes the 'Big 3'.

U.S. Airlines for Open Skies (UAOS) consists of Atlas Air Worldwide, FedEx, Hawaiian Airlines and JetBlue Airways. Collectively they transport more than 40 million passengers annually, ship nearly eight million tons of cargo, and employ approximately 350,000 people - 40 percent more than the Big 3 combined.

In contrast, the Big 3's current market position is built on a legacy of Chapter 11 bankruptcy protection, debt write-off and employee lay-offs. This way of producing profits compares badly to non-complaining Southwest Airlines, which has never fired people as a result of a bankruptcy - because it has always made a profit.

In a letter to U.S. Secretary of State John Kerry, Secretary of Transportation Anthony Foxx, and Secretary of Commerce Penny Pritzker, UAOS declared: "The Big 3 claim to support Open Skies but their demands, if implemented, would endanger this network of more than 100 U.S. aviation agreements.

"Acceding to those demands would not only breach the United States' obligations to the UAE and Qatar but also raise serious questions about its commitment to Open Skies generally. If the network is endangered, then so too are the significant economic and national security benefits it provides."

hawaiian airlinesThe group's letter noted the significant economic benefits of Open Skies, including annual passenger savings of US$4 billion annually according to a Brookings Institution study.

UAOS also stressed the significant harm to U.S. consumers, U.S. commercial and military supply chains: "Open Skies allows U.S. airlines to maintain global delivery networks through which they transport troops and vital supplies for the U.S. military."

Currently U.S. carriers rely on Open Skies agreements to overfly partner countries; stop for refueling and repair in partner countries; and transport supplies and troops between the United States and partner countries, and between those countries and destinations beyond.

Since 1991 U.S. airlines - including current or historic elements of the Big 3 - operating under the Civil Reserve Air Fleet  have transported almost 40 percent of the equipment, supplies and food to support U.S. operations in Iraq, Afghanistan and the Gulf, and more than 90 percent of the country's armed forces to and from Iraq.

"The Big 3 do not speak for all, or even most, U.S. airlines," said Hawaiian CEO and president Mark Dunkerley. "Our coalition believes that the United States should honor its Open Skies commitments, which opens markets for U.S. carriers, promotes competition on international and domestic routes, and facilitates U.S. exports."

FedEx president and CEO David Bronczek commented: "The Big 3 say that they support Open Skies, but the actions they recommend would undermine it. Those actions would breach our Open Skies agreements, provoke retaliation against U.S. carriers, and raise serious doubts about whether the United States is a reliable Open Skies partner."

Atlas Air Worldwide CEO William Flynn added: "Open Skies has allowed U.S. cargo airlines to develop global networks which, in turn, have facilitated the rapid movement of U.S. military supplies around the world in times of need, including to and from Iraq, Afghanistan and the Persian Gulf."

Atlas Air, which reported a net profit of US$55.2 million for the first half of 2015, noted that any reduction of the U.S. commitment to Open Skies, particularly the unrestricted right of carriers to expand services and enter new markets, would have long-term negative consequences for the country's military preparedness.

CSAFE Global


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