Local leaders join ‘open skies’ debate
Several Houston-area leaders have weighed in on a brewing controversy after three U.S. airlines accused state-owned foreign carriers of creating unfair competition in taking billions in government subsidies and urged federal officials to investigate, letters obtained by the Houston Chronicle show.
In January, American Airlines, Delta Air Lines and United Airlines accused state-owned airlines Qatar Airways, Etihad Airways and Emirates Airline of benefiting from $42 billion in subsidies and benefits from their respective governments over the last decade. Open Skies agreements between the United States and other countries allow U.S. airlines to fly to international cities and vice versa, and the airlines have claimed the government funding gives their competitors an unfair advantage.
Emirates late last month issued a nearly 400-page response to the allegations, accusing the airlines of having a lack of evidence and using lobbying ploys to stir the pot.
Emirates offers a nonstop flight from Houston’s Bush Intercontinental Airport to Dubai. The airline recently upgraded the route and flies its high-end Airbus A380, a double-decker plane with showers and an onboard lounge among its luxury amenities. Qatar flies a Houston-to-Doha route. Etihad does not serve Houston.
In letters to federal officials, a coalition of local leaders argued that jobs and the region’s economic prosperity could be at stake if foreign carriers indeed create an unfair environment.
In a May letter, Mayor Annise Parker pressed Transportation Secretary Anthony Foxx and Secretary of State John Kerry to investigate the allegations. She said, in part, “As the home to one of the country’s 10 biggest airports, the City of Houston holds significant interest in ensuring that the U.S. airlines — indeed all air carriers — are provided fair and level playing
field to compete for routes. It creates healthy competition in the marketplace, producing more choices and lower fares for passengers.”
County judge’s views
A letter dated later that month from Harris County Judge Ed Emmett began his letter to Foxx by writing, “I seldom involve myself in international affairs.” He compared the alleged problems with the foreign carriers to the “demise of the U.S. flag merchant marine fleet.”
“While there is no direct comparison between ocean shipping and the airline industry, we should take lessons to heart and not allow U.S. airline companies to be irreparably harmed by unfair practices,” Emmett wrote on May 18.
“It is vital, therefore, that you do everything in your power to ensure that foreign air carriers, specifically Emirates, Etihad and Qatar, are not allowed to distort the global aviation market by receiving subsidies from their governments.”
Partnership’s concerns
In a letter dated June 8, the Greater Houston Partnership president and CEO Bob Harvey also expressed concern about the allegations.
His letter, addressed to Foxx, Kerry and Commerce Secretary Penny Pritzker, said Houston’s goal of becoming a great place to live and build business depends in part on a “healthy and competitive airline industry.”
A report by the Partnership for Open and Fair Skies claims that each route that is lost to Qatar, Etihad or Emirates will result in an average net loss of more than 800 U.S. jobs.
The group provided the letters from the local officials this week.
In the Houston region, Harvey wrote that the total economic impact of Bush Intercontinental Airport is more than $22 billion, with 172,000 fulltime employees with total earnings of $6.8 billion.
“Being a national and regional center of commerce and the home to the headquarters of over two dozen Fortune 500 companies, IAH is critical to driving our economy and moving our goods and people across the world,” Harvey continued.
Others weigh in
Other Texas leaders who expressed similar sentiments to federal officials include Comptroller Glen Hegar, several state representatives and chamber of commerce leaders, the Partnership for Open and Fair Skies said.
On June 30, in Emirates’ lengthy response to the allegations, the airline said, “U.S. legacy carriers got the facts wrong, got the law wrong and set their sights on an outcome that will be wrong for American consumers, communities and the national economy.”
The full document was released to the media and public.
“The methods employed by the U.S. legacy carriers to discredit Emirates have been surprising and frankly, repugnant,” Emirates president Tim Clark said in a statement.
Clark said Emirates is “absolutely not subsidized, and our operations do not harm these legacy carriers, but instead benefit consumers, communities and America’s national economy.”