Thursday, May 18, 2017

FedEx voices concerns over legacy airlines

FedEx Corp.’s president and other top execs from U.S.-based passenger and cargo carriers recently questioned the practices of so-called "legacy" airlines.

David Bronczek, president and COO of FedEx; William J. Flynn, president and CEO of Atlas Air Worldwide; Robin Hayes, president and CEO of JetBlue Airways; and Mark B. Dunkerley, president and CEO of Hawaiian Airlines Inc., signed a letter dated May 15 that outlined their pro-global network stance on U.S. Open Skies agreements and called out Delta Air Lines, American Airlines and United Airlines.

The companies comprise a coalition known as the U.S. Airlines for Open Skies (USAOS); the letter was sent to Ambassador Robert Lighthizer — the newly confirmed U.S. Trade Representative.

Open Skies agreements are treaties that allow for unrestricted air travel between countries. These agreements are intended to eliminate government interference in commercial activity, which the USAOS believes promotes job growth, reduces prices for airline passengers, facilitates U.S. exports, strengthens U.S. national security and encourages competition in the airline sector.

An excerpt from the letter to Lighthizer states:

“During the last three decades, under the leadership of both Republican and Democratic Administrations, the United States has negotiated Open Skies agreements with more than 100 countries around the world. These agreements eliminate government interference in commercial decisions about the routes, frequency, pricing and capacity of airline service, both passenger and cargo. They also assure the ability of all U.S. airlines to create comprehensive international networks. Open Skies thus allows airlines to deliver more efficient and cost-effective service to American consumers, businesses and the U.S. government, including the military.”

“Regrettably, three large legacy U.S. airlines (“legacy carriers”) – Delta, United, and American – are making demands that would jeopardize Open Skies and reduce competition in an already overly concentrated U.S. airline market. Specifically, they are asking the U.S. government to freeze access to U.S. routes for airlines from two U.S. Open Skies partners – the United Arab Emirates (Emirates and Etihad) and Qatar (Qatar Airways). The legacy carriers claim such action is a justified response to alleged subsidies the foreign carriers have received from their home governments.”

The group's letter goes on to say that legacy carriers are circumventing the International Air Transportation Fair Competitive Practices Act (IATFCPA). The act allows the U.S. Department of Transportation (DOT) to take action if anti-competitive, discriminatory, predatory or unjustifiable activities by a foreign government or foreign airlines occur against a U.S. airline. The DOT has 180 days from the time the complaint is filed to either act to resolve the matter, dismiss the complaint or resolve it through diplomatic actions.

The Partnership for Open & Fair Skies — a coalition of American, Delta, United, the Air Line Pilots Assoc. Int’l, the Allied Pilots Assoc., the Airline Division of the International Brotherhood of Teamsters, the Assoc. of Flight Attendants-CWA, the Assoc. of Professional Flight Attendants, the Communications Workers of America and the Southwest Airlines Pilots’ Assoc. — wrote its own open letter to President Donald Trump in March that asked his administration to address alleged trade violations by the United Arab Emirates (UAE) and Qatar, which it claimed threatened 1.2 million American jobs.

But, according to the USAOS documents, the legacy carriers have not filed a complaint under the IATFCPA and instead have tried to “persuade policymakers” via lobbying and media efforts.

The letter ends by urging Lighthizer to “reject the demands of the legacy carriers and protect the invaluable Open Skies network.”

A three-page bulleted list of statements to support the USAOS’s position was also included.

Original article can be found here: http://www.bizjournals.com
USAOS Letter to Lighthizer by Meagan on Scribd

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