The Department of State, working closely with the departments of Transportation and Commerce, constantly negotiates civil air service agreements with foreign aviation industries. The United States' "open-skies" policy was designed to eliminate government involvement in the commercial airlines' decision making in regards to routes, capacity, and pricing in the international market. Such agreement has successfully expanded throughout multiple nations, promoting increased air travel to and from the United States. The United States, as of today, has "open-skies" agreements with over 120 nations.
The United States and United Arab Emirates, has both agreed on an international treaty allowing "open-skies" for both operators. The agreement highlights that commercial carriers can operator within the air space of both nations as long as there is little to no government interference what so ever. In other words, the government can not regulate the operation and may not offer huge amounts of subsidies to its commercial carriers. Those subsides, if given in huge amount, may allow those international carriers like Fly Emirates to offer cheaper tickets and therefore competing with our own big long-haul carriers. According to the United States Department of State, the following are some of the highlights of the right and duties of parties under the agreement.
- The right to fly across its territory without landing.
- the right to make stops in its territory for non-traffic purposes.
- Each Party shall have the right to designate as many airlines as it wishes to
conduct international air transportation in accordance with this Agreement and to
withdraw or alter such designations.
- On receipt of such a designation, and of applications from the designated airline,
in the form and manner prescribed for operating authorizations and technical permissions,
the other Party shall grant appropriate authorizations and permissions with minimum
procedural delay.
- While entering, within, or leaving the territory of one Party, its laws and
regulations relating to the operation and navigation of aircraft shall be complied with by
the other Party's airlines.
- Either Party may request consultations concerning the safety standards maintained
by the other Party relating to aeronautical facilities, aircrews, aircraft, and operation of the
designated airlines.
- The airlines of each Party shall have the right to establish offices in the territory of
the other Party for the promotion and sale of air transportation.
- The airlines of each Party shall be permitted to pay for local expenses, including purchases of fuel, in the territory of the other Party in local currency.
The purpose of the "open-skies" agreement, as mentioned above, is to provide fair competition among those international carriers (US Department of State, 2002). To sum everything up, flights operated by Fly Emirates into our airspace can not be funded by their government. If those flights were to be funded by the UAE government, then they must be conducted and flagged as a U.S. carrier. The Middle Eastern airlines are huge when it comes to government funds, specially Fly Emirate and Qatar Airways. Based on my knowledge, I can say that Etihad Airways and Qatar Airways are listed under this agreement too. They operate similar to Fly Emirates, in terms of government subsides and all of that good stuff.
Our own long-haul carriers receive no where near those subsidies given to Middle Eastern operators by their wealthy governments. Although research does indicate that there have been subsidies paid out to american long-haul carriers. For example, recent research show that American Airlines received subsidized loans by the federal government on their first big aircraft orders (Leff, 2017). Our government is no where near being able to pay anything for our carriers. Our country is just not as rich as those Middle Eastern ones, and we must accept that.
The Export-Import bank provides many opportunities to foreign companies to increase United States exports. They offer many financing programs, such as loans, at below-market interest rates in order to keep make foreigners contribute to our economic growth. So basically, when a foreign long-haul carrier purchases an aircraft from the United States, they get a much much lower export rate (EXIM, n.d.). With this being said, the amount those long-haul carriers pay when purchasing a american aircraft are is lower than the amount and american carrier would pay. This option is unavailable to United States carriers due to the fact that most of those companies pay huge amount of taxes when making aircraft purchases.
There are currently many issues going on with the international air travels and the "open-skies" agreements between the United States and other nations. In regards to Norwegian Air, Posaner states the Following: "Norwegian Air has been waiting two years for approval for its Ireland-registered offshoot, Norwegian Air International (NAI), to start direct flights from Cork and Shannon to Boston, and later New York. Approval for such a move is supposed to be fairly straightforward thanks to the ‘open skies’ agreement, which allows any EU or U.S. airline to fly between any point in each other’s jurisdiction. But U.S. regulators are stalling, under pressure from some in Congress" (Posaner, 2016). If the stalling continues, the trade between Europe and our nation could get affected in a very bad way. On the other hands, our system is also facing a huge problem with international airliners, such as Emirate and Qatar, as they seem to be a very big threat to american airliners. Emirate and Qatar, are still to this day, receiving huge amounts of government subsidies. If this was to be true, it could raise madness within our carriers and it would mean that Emirates and Qatar are not complying with the "open-skies" treaty.
Now, and in all honesty, I do not know where I stand regarding whether the global airline playing field is fair or not. One thing for sure, the United States government have every right in the world to go after and against those international airliners if they were to jeopardize business growth. Emirates and Qatar are supported by the world's richest governments. We all know that is not the case for airlines like Delta and Spirit, for example. I totally agree that flights operated by those long-haul international carrier must have no government interference if they want to conduct business on U.S. airspaces. Emirates and Qatar airways are where I want to end up but that does not mean they get to put our domestics airlines out of business, because that will hurt our aviation industry economically.
References
Export-Import Bank of the United States. (n.d.). Export Finance Solutions to Increase Sales for U.S. Businesses [PDF file]. Retrieved march 13, 2018, from https://www.exim.gov/learning-resources/publications
Leff, G. (2017, October 29). More Hypocrisy By US Airlines on Subsidies: Where's the Outrage Over the Latest Bailout? Retrieved March 13, 2018, from https://viewfromthewing.boardingarea.com/2017/10/30/hypocrisy-us-airlines-subsidies-wheres-outrage-latest-bailout/
Posaner, J. (2016, September 02). Norwegian airline clouds open skies. Retrieved March 13, 2018, from https://www.politico.eu/article/norwegian-airline-nai-ireland-us-open-skies/
US Department of State. (2002, March 11). Air transport agreement: U.S. UAE air transport agreement of March 11, 2002. Retrieved March 13, 2018, from https://www.state.gov/e/eb/rls/othr/ata/u/