Freezing Open Skies agreements would cost billions of
dollars in economic activity and tax revenue, and tens of thousands of jobs,
according to research commissioned by the U.S. Travel Association.
The Oxford Economics study was commissioned in reaction to a
request this year from the three largest U.S. network airlines — American,
Delta and United — for the Obama administration to review Open Skies agreements
with airlines from the United Arab Emirates and Qatar. The U.S. carriers claim
that the state-owned Gulf airlines are in violation of Open Skies pacts because
of the government subsidies they receive.
The U.S. airlines argue that the Gulf carriers have an
unfair advantage, and that the U.S. government should freeze their U.S. growth until
the matter is addressed.
U.S. Travel, which has long held that the 100-plus Open
Skies agreements in effect in the U.S. "have been a colossal boon to the
overall U.S. economy,” said the new study, which focuses on those Gulf
airlines, said that in 2014, those carriers brought 1.1 million international
passengers to the U.S. that spent over $4 billion during their visits to the 11
U.S. cities the Gulf carriers serve.
That spending, the study says, supported nearly 50,000
American jobs and generated $2.6 billion in labor income and more than $1.1
billion in federal, state and local taxes.
"When the Big Three first embarked on their lobbying
campaign against Open Skies, they had our attention because they claimed that
their position was about protecting U.S. jobs,” stated U.S. Travel CEO Roger
Dow. “But … breaking those agreements is likely to have terrible consequences
for U.S. employment, and now we have research in hand conclusively illustrating
that."
The study also found that U.S. airlines benefit from Open
Skies agreements. In 2014, 56% of passengers on the Gulf airlines, 620,000 in
total, transferred onto U.S. carriers for a connecting flight when they arrived,
generating $140 million in revenue, according to the study. Roughly 350,000 of
these travelers transferred to flights operated by American, United and Delta,
U.S. Travel said.
The study also found that of the 1,700 routes the U.S.
carriers and Gulf carriers flew in April 2015, they only competed head-to-head
on two of them, which U.S. Travel said "refutes the U.S. legacy carriers'
claims that their passengers are being 'stolen' by the Gulf carriers.”
The Oxford research found that where the carriers did
compete directly, they were serving different passengers; 82% of the U.S.
legacy carriers' passengers flying to the U.S. in 2014 originated in the
Americas or Europe while more than 80% of all U.S.-bound Gulf carrier
passengers originated in South Asia or the Middle East.