The U.S. open skies aviation policy is getting full-throated support fromJetBlue President Robin Hayes, even as three of his counterparts representing major U.S. carriers meet with Obama administration officials to discuss possibly amending the policy.
In a letter to the secretaries of State, Commerce and Transportation obtained by The DAILY, Hayes expresses JetBlue’s “unwavering support” for the open skies regime and argues that the airline’s success in serving the Caribbean and Latin America could not have been possible without the deals.
“Similar to the domestic aviation landscape after deregulation, international services, traffic and economic activity have correspondingly grown since the United States began pursuing its open skies policy,” Hayes said. The open skies policy has successfully “sought to eliminate government interference in commercial decisions on routes, capacity and pricing,” he added.
The U.S. has struck open skies deals with more than 100 countries as well as the the EU since 1992, when the first treaty was signed with the Netherlands, State Department data show.
JetBlue is not in a global alliance, but has struck codeshare and interline partnerships with airlines from around the world, Hayes noted.
Defending a Persian Gulf carrier that is among those most-often targeted as reaping too much benefit from open skies, Hayes said the policy has allowed Emirates to expand its reach in the U.S., including to Boston. As a direct result of the Boston-Dubai flight, JetBlue was able to begin connecting Boston-Detroit service, “formerly a monopoly market served only by Delta with high average fares,” Hayes said.
Hayes’s letter coincides with meetings this week being held between the CEOs of American Airlines, Delta and United Airlines and Transportation Secretary Anthony Foxx, Commerce Secretary Penny Pritzker and other administration officials to discuss modifying open skies. In particular, the CEOs are expected to ask the administration to begin government-to-government negotiations with Qatar and the United Arab Emirates (UAE) to examine alleged subsidies and overcapacity on routes between the U.S. and those countries, people familiar with the matter have told The DAILY.
Open skies agreements have fostered the expansion of the three Gulf carriers—Emirates,Etihad Airways and Qatar Airways—in the U.S., leading to calls by the CEOs of the U.S. major carriers and organized labor for a re-examination of the policy. Their alternative has been dubbed “fair skies,” and it’s not new. Labor, worried that liberalization of air services to Latin America would decimate the U.S. industry, began urging “fair skies” to limit the threat of “flag of convenience” airlines to U.S. jobs in the 1990s (Aviation DAILY, Oct. 12, 1998).
Delta CEO Richard Anderson has made the case for “fair skies” several times in recent years, arguing that U.S. loan guarantees for foreign carriers through the Export-Import Bank of the U.S. (Ex-Im) tilts the playing field away from U.S. carriers (Aviation DAILY, April 12, 2012). “Open skies policies need to be modified to ‘fair skies,’” Anderson said then.
The Gulf carriers deny the subsidy charge and say consumers benefit when airlines compete on product and service. “Open skies exist for a reason,” Etihad CEO James Hogan told The DAILY last month (Aviation DAILY, Dec. 15, 2014).
More recently, the Air Line Pilots Association (ALPA), with the support of the European Cockpit Association (ECA), said government should limit traffic rights for some carriers thought to be receiving illegal state subsidies under its “fair skies” proposal (Aviation DAILY, Dec. 9, 2014).
This week’s high-level discussions and Hayes’s letter occur just when the U.S. and the EU are holding a meeting of the joint committee that administers the implementation of the U.S.-EU open skies agreement (Aviation DAILY, Jan 7). This meeting will feature closed, government-to-government talks on Norwegian Air International’s (NAI) application for a foreign air carrier permit, which has been pending for almost a year. Applications from EU carriers to fly to the U.S. usually are approved in a matter of weeks.
The three major U.S. carriers and organized labor have objected loudly to NAI’s application, arguing that it, domiciled in Ireland, is operating a “flag of convenience” business model that threatens the U.S. airline industry. NAI plans to use an Irish air operator certificate and source crews from there, elsewhere in the EU, the U.S. and possibly Asia—a combination that violates the open skies agreement, NAI’s opponents say.