Airline protectionism threatens open skies

American tourism is in trouble, with analysts openly saying it’s in a “slump” and arguing over the reasons. That shouldn’t be the case, because global long-haul travel is booming. Between 2015 and 2017, long international flights climbed almost 8 percent. If the United States was simply able to maintain, not expand, its percentage of that pie, things would be pretty great for people in tourism-related industries.

But things are not great because the percentage of people coming to America as part of that travel has declined, by almost 2 percent over those years. That might not sound like a lot but remember that every one of these travelers spends, on average, more than $4,300. Lose 10 of them to another destination and you’re out $43,000. Lose 100 and you’re down almost half a million dollars. Lose 7.4 million travelers, as we have compared to our 2015 market share, and you’re down about $32 billion, and out an estimated 100,000 jobs that would have been created. Ouch.

And the Big Three American airlines are actively working to make this problem worse.

No, that wasn’t a typo. In a naked example of plane protectionism, dominant American airlines are lobbying hard to unravel various Open Skies agreements, which govern much of international travel. They’re doing it for one obvious reason and one lessobvious reason.

The obvious reason is that they’d like less competition and higher prices. The way the domestic airline market has shaken out, the Big Three — Delta, United and American-US Air — exert tremendous influence over plane routes and prices by claiming vast swaths of gates at certain “hub” airports.

Smaller domestic airlines can still compete with the Big Three, true. But smaller carriers fight for limited gate space and have to contend with regulations that favor their larger competitors.

The one area where the Big Three don’t have travel locked down is international flights. As you would expect with genuine competition, prices on Open Skies routes have fallen — by about 32 percent across the board, leaving $4 billion in travelers’ pockets to spend on such things as restaurants, hotel rooms and souvenirs. The Big Three would like to keep more of that money.

The less obvious reason for all the protectionist lobbying has to do with subsidies. Because of Open Skies agreements, governments have agreed to pull back not just from controlling but also from subsidizing international travel. The Big Three don’t like this because it makes their job of chasing subsidies, bailouts, perks and special tax treatment harder.

We don’t know right now if they’ll get their way on Open Skies. We can predict with near certainty that clearing out much competition in international travel would raise prices and further depress tourism. And it’s no stretch whatsoever to see the Big Three shamelessly using that slump to go to Congress and state legislatures, hat in hand, and say we’ve got to “do something” about the slide in tourism to America.

Let’s head that off at the pass. If we want to begin to address the travel slump, we ought, in the first place, to not make it any worse.

San Antonio Express-News