Open Skies Agreements

No, President Trump Should Not Stop Emirates’ Newark-Athens Flight

New York and New Jersey congressional representatives have been misled into thinking that our Open Skies agreements kill American jobs. Data shows it’s quite the opposite.

Emirates

Emirates Airlines launched their new round-trip flight between Newark and Athens last Sunday - amid protests at Newark, and after twenty-five members of the New York and New Jersey Congressional delegation recently sent a letter to President Trump asking him to stop the flight.

The opposition to the flight is driven by the Big Three U.S. airlines (American, Delta and United) and their unions, as part of a broader effort to unravel Open Skies agreements that allow foreign carriers to compete on overseas routes. The arguments of these groups against Open Skies continue to be offensively self-interested, not to mention ridiculous.

Flight options have declined in the U.S. over the last ten years, driving up prices and fueling traveler frustrations. New routes from more airlines give flyers more choices, driving prices down and incentivizing more air travel. It really is that simple.

Unfortunately, the New York-New Jersey Congressional delegation appears to have been misled by the U.S. legacy carriers. These legacy airlines happen to control 80 percent of seat capacity on trans-Atlantic routes—and enjoy anti-trust immunity from the federal government. Their goal is to block out competitors like Emirates to protect their dominant position in the marketplace.

The New York-New Jersey delegation’s letter asks the president to block the Emirates flight under the pretext of protecting American jobs. Doing so would not only be a clear violation of the U.S.-U.A.E. Open Skies agreement, but would also drive up prices and further reduce trans-Atlantic passengers’ already-paltry options—the sort of market domination Open Skies agreements are meant to deter.

U.S. legacy carriers and their European joint venture partners (American-British Airways, Delta-Air France and United-Lufthansa) are exempt from anti-trust laws and practically monopolize the trans-Atlantic market. Yet the NY-NJ delegation letter contends that Emirates and two other Persian Gulf-based airlines, Etihad and Qatar Airways, have an unfair advantage over American air carriers, which could force American carriers to discontinue routes and cut jobs.

In fact, quite the opposite is true.

Gulf carriers drive thousands of travelers and millions in revenue directly to U.S.-based airlines. In fact, nearly 30 percent of all Gulf carrier passengers to the U.S. transferred to U.S. airlines upon their arrival here—and that number only continues to grow, as new routes to the U.S. open up from previously untapped markets in South Asia and the Middle East.

In 2014, thanks to our Open Skies agreements with Qatar and the U.A.E., the Gulf carriers brought 1.1 million international visitors to U.S. markets. Those visitors contributed more than $4.1 billion to the nation’s GDP, supported nearly 50,000 American jobs and generated $1.1 billion in crucial federal, state and local tax revenue.

Additionally, Emirates and the other Gulf carriers have committed to purchasing 235 Boeing 777X, which will support thousands of American manufacturing jobs—a stated priority for President Trump.

Perhaps the most puzzling part about the New York-New Jersey delegation’s position is the fact that their own states stand to benefit greatly from upholding Open Skies agreements. Visitors to the New York City area who arrived on a Gulf carrier flight in 2014 spent over $1.7 billion during their trips, supporting over 21,000 jobs.

If you want to talk about American job creation, you can’t ignore those numbers. By attempting to block the Emirates flight and upend our Open Skies agreement with the U.A.E. and Qatar, the New York-New Jersey delegation is putting thousands of jobs and billions in economic benefits at risk.

Major travel businesses from New York and New Jersey agree. Companies including Wyndham Hotels, Loews Hotels and Resorts, Explore Brooklyn and Meet AC (Atlantic City, NJ) signed on to a U.S. Travel Association letter in 2015 asking the Administration to protect Open Skies.

The bottom line: Open Skies is good for American jobs. President Trump would set a dangerous precedent for our economy by stopping Emirates’ Newark-Athens route—the New York-New Jersey delegation should be careful what they wish for.



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