US wants to modify Gulf Air treaties

[WYOMINGPILOT]

Looks like the US Airlines want to discontinue or modify the Big 3 Persian Gulf carriers subsidies via air treaties. It will be interesting as all 3 push deeper into US markets. Not sure which if any US carriers directly service Dubai but probably none service Abu Dhabi or Doha. Definitely a storm brewing and Canada has also sought restrictions of the Big 3 Gulf Carriers.
The US service is obviously substandard in comparison to all 3.


http://finance.yahoo.com/news/u-airl...210956813.html

[Wizofoz]

The executives also said that Emirates Airline, Etihad Airways and Qatar Airways have received $42.3 billion in subsidies since 2004, the Journal reported on Thursday.

Possibly- with, of course, the rider that Etihad and Qatar received ALL of it!

Emirates returns dividends to its' owners, it does not receive subsidies.

US airlines, on the other hand, receive the advantages of bankruptcy protection laws, and the revenue gained from their protectionist domestic networks.

[Yarra]

"Not sure which if any US carriers directly service Dubai "

Delta and United do.....

[lowstandard]

ALPA and the APA have made issues with the ME3 operating into the US, they could look at the labour practices and manipulation of the GCAA by EK and use that to assist their respective companies.

I'm just saying if someone from either of those associations was reading these forums, they wouldn't have to look very far for information...

[CaptainChipotle]

Or if DAL or UAL wanted to hit EK where it hurts they would go through all their online applications and interview everyone thats applied that currently works for EK.

Not sure how many Americans are at EK but I think its over 300 still (roughly 10%). And from what I understand, most, if not all have applied to go home.

[Metro man]

The Gulf airlines have to fly all those USA manufactured Boeings somewhere so it depends who has the most influence in Washington.

It's not just the airframes there are engines, avionics and all the other components.

Expect opposition from states involved in the supply chain.

[fatbus]

Also keep in mind , that it's the pilots unions , all be it strong ,is not the FAA. FTL's at UA/AA etc have been negotiated over time to improve Tand C s. When there is Bilions US being spent in the US , money generally does the talking.

[777boyo]

I believe the issue that ALPA are pushing is not about the (assumed, but unverifiable) subsidies paid to the Gulf 3 by their owner states, but the subsidies which they obtain from the US exchequer in the form of Export Credit Guarantees paid via the US Exim Bank. These are seen by ALPA as effectively being a subsidy from the US taxpayer to airlines who are now in direct competition with their own US carriers.

7B

[Nikita81]

These western CEOs have forgotten one important argument in their fight against open skies: the fact that ME carriers operate under different labour laws (or they are not the subject of labour laws, like Emirates) and labour "culture" which brings them huge profit.

Cheap labour and ban of strikes and unions bring to ME carriers unfair advantage. Western CEOs would have more success in their negotiations if they would pursue violation of labour rights issue than to attack ME carriers for receiving subsidies.

It's simple: you abuse your staff and earn money by pushing them to work over legal limits, stealing money and leave days from them, endangering everyone's safety - you don't fly where there are labour laws and unions capable to make a difference for their members and where carriers actually don't earn money by stealing from their employees (primarily).

Anyone can do business like Emirates does, for example: we don't respect international rules and laws, we exploit natural and human resources, we make people throw up from hard work and pay them coins or keep them financially, emotionally and psychologically trapped in Dubai, and we are among the most successful airlines in the world.

I don't think that open skies would bring so much benefit to Emirates if they were forced to follow universal labour and human rights and laws.

[typhoonpilot]

I believe the issue that ALPA are pushing is not about the (assumed, but unverifiable) subsidies paid to the Gulf 3 by their owner states, but the subsidies which they obtain from the US exchequer in the form of Export Credit Guarantees paid via the US Exim Bank. These are seen by ALPA as effectively being a subsidy from the US taxpayer to airlines who are now in direct competition with their own US carriers.

Not picking on you, but that is exactly the type of incorrect information about the EX/IM bank that makes the rounds. The U.S. majors and ALPA are calling it a "subsidy".

The Ex/Im bank supplies loans to foreign companies in order to purchase American products. It was/is set-up to benefit American manufacturing. While it's true that a significant percentage of that goes to Boeing, that is because Boeing is one of the big American manufacturer's that exports their products. This financing can help Boeing win orders over Airbus products. That results in jobs for Americans. Tens of thousands of good high paying union jobs at that. Not just at Boeing either. Think of the whole supplier chain to include GE, Honeywell, Spirit Aerosystems, Goodyear, Rockwell Collins, etc, etc.

What is quite ironic when ALPA, a union, goes off on this rant is that they are indirectly trying to hurt another union or two ( SPEEA and IAM come to mind ). When questioned about this their reply is generally along the lines of "we don't care, we're only here to look out for our members". It's that type of narrow minded stupidity that is the downfall of their position on this matter.

Imagine those tens of thousands of SPEEA and IAM workers out of a job. Do they now buy tickets on DAL, UAL, and AA to take their family on vacation? If Boeing's order book goes down substantially do Boeing executives and engineers travel on American carriers as often?

Cause and effect. ALPA just doesn't get it, nor do the CEOs of the major U.S. carriers.

What they should be, and in some cases are doing, is argue for similar help from the U.S. government for loans to buy aircraft from Boeing. That would be a win/win. American manufacturing gets more work and they get aircraft with lower interest payments like their foreign competitors.

Of course, they are getting aircraft with lower prices and lower interest payments from the heavily subsidized competitor called Airbus, but that's another topic.

Last I checked the Ex/Im bank makes a profit from the loans they supply to foreign airlines. So the whole concept of "subsidy" and "subsidy from the U.S. taxpayer" needs to be re-worded.



Typhoonpilot

[Avid Aviator]

I don't think that open skies would bring so much benefit to Emirates if they were forced to follow universal labour and human rights and laws.

Very true!
Unfortunately there are no universal (or international) labour and human rights laws, as China, ME and many others demonstrate.
Therein lies the main drawback of globalisation.

[Nikita81]

Well, there are some universal declarations and one very famous one on Human rights which can serve as an example and a criteria for doing fair business all over the world.

But it doesn't matter. What matters is that countries and international and national aviation organizations can restrict carriers if they don't follow certain rules, including human and labour laws and rights and somebody could finally use that fact to negotiate their goals.