US airlines seeking to curb the growth of Arabian Gulf rivals could discover today whether Donald Trump’s aviation policy is about protectionism or pragmatism.
While the pre-election America First rhetoric of the new president may have given encouragement to the big three legacy airlines – Delta, United and American – it did not spell out where he really stood in the long-running and often acrimonious Open Skies feud.
The trio claim that their Gulf counterparts benefit from illegal subsidies that run into billions of dollars – an allegation that has been denied by Emirates, Etihad Airways and Qatar Airways. Both sides have spent heavily on lobbying. The chief executives of the major US carriers are today expected to meet Mr Trump in what the White House described as a “listening session”. It follows similar meetings with the chiefs of the automotive and pharmaceutical sectors.
Tim Clark, the president of Emirates, last year described the “America first” rhetoric of Mr Trump as “bluster and growl”. It may turn out to be just that.
“He has got to make the right noises to keep both sides happy but I would be very surprised if Trump acted against the Gulf carriers,” said Peter Harbison, the Sydney-based executive chairman of Capa – Centre for Aviation.
Comments on Tuesday by Sean Spicer, the White House press secretary, in defence of the US expansion of Norwegian Air International, were far from protectionist in tone. That may not be an encouraging sign for the legacy US airlines.
More than 100 members of congress had in December written to Mr Trump to ask him to cancel permission by former president Barack Obama for the airline to run low-cost transatlantic flights, some of them from Ireland.
Mr Spicer said on Tuesday that the US had “huge economic interest” in the deal.
Welcoming the positive effect of the Norwegian carrier on the US economy while at the same time taking an opposing stance against the Gulf carriers would appear inconsistent, according to Mr Harbison, a veteran aviation industry commentator.
He sees the comments of the press secretary ahead of tomorrow’s meeting as being “highly instructive”.
Emirates, Etihad and Qatar Airways did not immediately respond to requests for comment.
The war of words between the big three US carriers and their regional counterparts that had raged for two years was starting to fizzle out by early last year.
But the surprise election of Mr Trump with an America First economic agenda was regarded by the big US carriers as an unexpected opportunity to revive the dispute by enlisting the support of a new president who had risen to power on a ticket of protecting American jobs.
Ed Bastian, the chief executive of Delta Airlines, in December urged the new president to let the US airlines be the “poster child” for enforcing Open Skies rules.
“We are facing Middle Eastern carriers that are violating the law,” he said.
The US airline lobby did not waste any time reinforcing that argument to Elaine Chao when she was confirmed as secretary of transportation on January 31.
On the same day, the Partnership for Open & Fair Skies, which represents the big three US carriers as well as a number of crew organisations, wrote to her to request her support in protecting American jobs against “foreign interests”.
But not all US carriers are against the expansion of the Gulf airlines.
The chief executives of four US airlines this week also wrote to Ms Chao and Rex Tillerson, the new secretary of state.
“Regrettably, three large legacy US airlines – Delta, United and American – are making demands that would jeopardise Open Skies and reduce competition in an already overly concentrated US airline market,” said the letter from the chief executives of Atlas Air Worldwide, FedEx Corporation, JetBlue Airways and Hawaiian Airlines.
This week the more vocal airlines and unions who have been expecting the new president to be firmly in their corner may get the first meaningful sign if he really is.
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