Worrying times for Open Sky agreements
02/09/2017
WORRYING TIMES FOR OPEN SKY AGREEMENTS.
It is something of a red letter day in the U.S. aviation industry as leading airline executives meet with President Trump at the White House.
THE BACKGROUND
The background to this story is that for some time now, U.S. carriers have been concerned about alleged unfair competition from three Middle-East airlines: namely Etihad, Qatar, and Emirates.It is claimed that all three airlines have been receiving subsidies from their governments, the concern being that (not having to worry about profits), the airlines can force down prices and drive out competition.
The governments involved have stated that the so-called subsidies are in reality loans, that have to be repaid. The U.S. carriers are not convinced. However, the Gulf airlines are buying American, with Qatar announcing in October that it had ordered 40 jets from Boeing with another 60 in the pipeline.
The dispute comes amidst the new Administrations stated policy of promoting American companies, and more specifically American jobs, above all else.In the aviation sector, this policy could be a little tricky.The U.S. pioneered open sky agreements (you could say it was their idea).
WHAT IS AN OPEN SKY AGREEMENT ?
What an open sky agreement is is that one country says to another; your airlines can fly in our airspace if we can fly in yours. To date, the U.S. has 120 such agreements.Now such agreements could be under threat.
AND THEN THERE IS NORWEGIAN AIRLINES
As one of its last acts, the out-going Obama administration granted an operator's license to Norwegian Airlines, an act which provoked howls of outrage from U.S. airlines, and the unions that represent their employees. Norwegian quickly countered that it had created 150 U.S. jobs and logged $15 billion of orders with American plane manufacturer Boeing, generating work for thousands of U.S. workers. They also point out that they are the only foreign airline recruiting U.S. pilots and already have 500 U.S. staff.
BUT NOT EVERYONE IS UNHAPPY
Not all U.S. airlines are complaining, though. Low-cost airline Jetblue, and the world's leading cargo airline FedEx Express have both commented that they value open sky agreements. Consumer groups have also applauded greater competition, hoping that it will result in lower fares.
The White House on its part appears skeptical about industry complaints (especially about Norwegian citing the Scandinavian airlines level of investment in the U.S.)
AND FINALLY
Another item on the agenda will be the nation's decaying airports (the U.S.A. has one-third of the world's airports) which President Trump has famously described as 'from a third world country.It should be a good meeting to be a 'fly on the wall.' www.paylessflights.com will always provide the best value air fares,check us out.