How ‘Open Skies’ Agreements are Threatening to Sink U.S. Airlines in the Not-Too-Distant Future

first_img Banksy’s Gross Domestic Product Is a Pop-Up Shop Unlike Any Other Photo by William PeruginiIf you’re unfamiliar with “open skies” treaties, you’re not alone. You’re also not likely an airline nerd who enjoys perusing aviation industry news for fun, but this series of international agreements could be one of the most important legal developments influencing the future of air travel.Officially, the U.S. Department of State describes the lofty-sounding open skies agreements as “designed to eliminate government involvement in airline decision-making about routes, capacity, and pricing in international markets. Open skies agreements have vastly expanded international passenger and cargo flights to and from the United States, promoting increased travel and trade, enhancing productivity, and spurring high-quality job opportunities and economic growth.”In short, these agreements allow U.S. airlines to operate unfettered overseas, and for international airlines to run routes in the United States without the government interfering too much.It sounds great in theory — in reality, the issue isn’t clear-cut. For the better part of a decade, it’s proven a sticky wicket on the economic platforms of both Obama and Trump.Domestic air carriers note some foreign airlines — most notably the “Gulf Three,” which is comprised of Emirates, Qatar Airways, and Etihad — have received massive government subsidies to the tune of $52 billion since 2004. The U.S. airlines claim their foreign competitors would never be profitable if it weren’t for these handouts.When asked whether he believed the Gulf carriers were enjoying backdoor subsidies, United Airlines president Scott Kirby put it in no uncertain terms: “I think it’s a front door, back door, side door, windows,” Kirby said. “I think they are just getting subsidies across the board … The only debate is what we should do about it.”In a classic “I know you are, but what am I?” rebuttal, the Gulf Three countered that their domestic rivals have received equivalent — perhaps even more — government assistance. Most notably, they cite post-9/11 industry bailouts, wide-scale bankruptcy debt forgiveness, and public financing of airports and related infrastructure. Plus, the foreign airlines say they’re doing the United States economy a favor by guaranteeing hundreds of thousands of American jobs in the aviation sector. Given that all of the above is historically true, it seems no airline’s hands are entirely clean.For now, as airlines all over the world over engage in this competitive bloodbath, we will enjoy the spoils. The mess equates to dirt-cheap airfare for consumers. It seems every week presents us with a new roundtrip international flight for less than 50 percent of the fare we were charged few years ago.Unfortunately, all good things must come to an end. Like any business, airlines need to maintain profitability to survive. If domestic carriers are forced to cancel routes because they can’t put asses in the seats (as Delta did on its previous non-stop Atlanta to Dubai, flight which Emirates has since taken over), the first ones to fill that demand will be their foreign competitors. In that competition-free vacuum, the Gulf Three will likely set their prices however they like. So, enjoy the open (and budget-friendly) skies while you can. It seems they won’t last long.Feature image by Photo by William Perugini. Major Airline Admits to Monitoring Passengers Via Onboard Cameras Escape to the Pacific Northwest at Hoh Rainforest Caravan Cabins Nevada’s Massacre Rim Named Latest International Dark Sky Sanctuary World’s First Luxury Space Hotel Promises Climbing Wall, Low-Gravity Basketball Courts Editors’ Recommendations last_img read more

Continue reading

Finland urges bold agenda for sustainable development targets

Finland today suggested that the new development agenda being drawn up by the United Nations to succeed the current Millennium Development Goals (MDGs) be called the Sustainable Development Goals, while at the same time faulting the world body for its failure to stop the Syrian bloodbath. “A green economy is not a luxury, but a prerequisite for poverty reduction and sustainability. In short, the new agenda must be even bolder and more ambitious than the previous one. Its implementation will require action in all countries,” Foreign Minister Erkki Tuomioja told the General Assembly during its annual General Debate.“In the near future, we are expected to agree on a new development agenda, a new set of goals, which in my view could be called Sustainable Development Goals,” he said of the theme of this year’s 68th General Assembly – The Post 2015 Development Agenda: Setting the Stage! – which seeks to draw up an even more ambitious blueprint to totally eliminate poverty and its attendant ills in the decades following the end in 2015 of the MDGs cycle.“Faced with advancing climate change and the accelerating loss of biodiversity we may, at best, have only a few decades time in which to reach ecological, social and economic sustainability. Decisive action based on a sense of urgency is needed to turn the tide globally before it is too late. Either we succeed in this together or we are going to perish together,” he declared.“Poverty can only be eradicated within the context of sustainable development. Development must be ecologically, economically and socially sustainable. It must be firmly anchored in human rights.”Turning to the civil war in Syria, Mr. Tuomioja decried the UN’s a failure to act in its core domain, in maintaining peace and security, with 110, 000 people already killed and 2 million forced to flee the country.“The United Nations has been unable to act to end this appalling bloodshed,” he said. “The conflict in Syria has seriously undermined the authority and credibility of the United Nations.” read more

Continue reading