In the last 30 years, the United States has signed more than 100 open skies agreements with other countries to remove restrictions on international air travel — a policy that has been great for travelers because it has lowered fares and increased service.
Now, three large airlines — Delta, United and American — are asking the Obama administration to renegotiate such agreements with the United Arab Emirates and Qatar. The airlines accuse those governments of unfairly subsidizing their state-owned airlines, Emirates, Etihad Airlines and Qatar Airways, by $40 billion since 2004. Officials at the State Department and the Department of Transportation are reviewing the request.
Administration officials should study these allegations but must tread carefully before trying to tear up treaties that have served travelers well. While open skies agreements generally include clauses that call for “fair competition,” the United States has never tried to rescind or renegotiate such treaties because a country was subsidizing its airlines, government officials say.
Governments around the world own airlines and often support them with loans, favorable contracts and other benefits. In fact, the big American airlines have partnerships with several large government-owned carriers like Singapore Airlines, Air India and Air China. But the three American airlines argue that the subsidies being lavished on the three Gulf airlines are so extreme that the Obama administration must act. Delta, United and American say that they are losing market share for flights to and from American cities to regions like South Asia, because the Gulf airlines can afford to sell those flights at incredibly low prices and sometimes even at a loss. The Gulf airlines deny that they benefit from unfair subsidies.
In an ideal world, no government would subsidize airlines or offer them immunity from antitrust laws. But the truth is that public officials and airlines everywhere have repeatedly tried to thwart fair competition in this industry. That is unlikely to change anytime soon.
FROM AN EDITORIAL IN THE NEW YORK TIMES