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19 Nov, 2013

Huge Gulf aircraft order worries U.S. airlines group, pilots


WASHINGTON–(BUSINESS WIRE)–Airlines for America (A4A), the industry trade organization for the leading U.S. airlines, said Monday that record-breaking aircraft orders from Middle Eastern carriers, totaling $162.6 billion, underscore the need for a U.S. National Airline Policy, in which the U.S. government recognizes the critical role that U.S. carriers play in connecting America to global markets, and creating jobs across the entire economy.

The orders announced at the Dubai Airshow reflect the supportive environment some state-owned foreign competitors experience with their own governments, which is often in direct contrast to the way the U.S. government treats its own carriers. Today, Emirates already has more widebody aircraft than any U.S. carrier, and has more of these large aircraft on order than all four U.S. legacy carriers combined. That disparity fundamentally threatens the ability of U.S. airlines to compete in what is now a dynamic global aviation sector.

“The massive orders from the Middle Eastern carriers at the Dubai Airshow should serve as a wake-up call to our government about the need to implement a National Airline Policy that would help level the playing field, enable U.S. carriers to compete globally and benefit passengers and shippers. America needs strong airlines to connect people and goods to the global economy and to ensure our country’s competitiveness,” said A4A President and CEO Nicholas E. Calio. “Rather than tilting the competitive playing field against U.S. airlines and their passengers, our government must play its appropriate role in enabling U.S. commercial aviation to grow and prosper while presenting even more formidable competition to our global challengers.”

A4A has called for a National Airline Policy to normalize the tax and regulatory environment to be more in line with other industries and enable the U.S. airline industry to grow and prosper – recognizing it as the economic engine that drives 5 percent of GDP and 10 million U.S. jobs.

“We seek fair, no-nonsense policies that enable the entire aviation industry to fulfill its potential to generate good paying jobs and bolster our domestic economy,” said Calio. “Even more important, we want our government to stop actions that benefit state-owned foreign carriers over U.S. carriers.”

Calio noted the growing bipartisan concern on Capitol Hill over the Administration’s misguided decision to establish a Customs and Border Protection preclearance facility in Abu Dhabi, an airport that no U.S. carrier currently serves. Last week, Reps. Pat Meehan (R-PA) and Peter DeFazio (D-OR) introduced legislation to block the controversial facility, which threatens American jobs and helps foreign competitors at the expense of domestic airlines.

Annually, commercial aviation helps drive more than $1 trillion in U.S. economic activity and more than 10 million U.S. jobs. A4A airline members and their affiliates transport more than 90 percent of all U.S. airline passenger and cargo traffic. For more information, www.airlines.org

Foreign State-Owned Airlines’ $162 Billion in Aircraft Orders “Threaten U.S. Airline Industry and its Workers”

WASHINGTON–(BUSINESS WIRE)–Today’s aircraft orders totaling $162.6 Billion by state-owned foreign airlines Emirates, Etihad Airways, Qatar Airways, and Flydubai, illustrate the staggering scale of the economic threat to the U.S. airline industry and its employees if the U.S. government continues policies that hand foreign competitors an economic advantage over U.S. airlines in the global marketplace.

So far, the total order during the first day of the Dubai Airshow includes the purchase of 113 widebody aircraft from Airbus and 255 from Boeing. “The question of the day is: How many of these widebody aircraft orders will be financed by a U.S. or European taxpayer-backed export credit agency, subsidizing the aircraft orders at rates not available to U.S. airlines,” said Capt. Lee Moak, President of the Air Line Pilots Association, Int’l (ALPA).

ALPA calls for the U.S. government to provide U.S. airlines and their workers with a fair opportunity to compete internationally by ending its policies that advantage state-owned foreign airlines while harming U.S. airlines. In Leveling the Playing Field for U.S. Airlines and Their Employees, ALPA lays out urgently needed U.S. government action, including measures to:

  • Reform the high tax burden on U.S. airlines while their foreign competitors often operate in a tax-free business environment at home;
  • Halt its plan to operate U.S. Customs preclearance facilities in Abu Dhabi and possibly other airports where U.S. carriers do not fly that advantages state-owned foreign carriers at the expense of U.S. airlines;
  • Ensure that U.S. Open Skies agreements acknowledge that high labor standards for U.S. airline employees are essential to the competitive landscape;
  • Eliminate low-interest U.S. Export–Import Bank financing for widebody aircraft that isn’t available to U.S. airlines but subsidizes state-owned foreign airlines and saves them millions in financing costs.

“These state-owned foreign airlines are spending billions to purchase widebody aircraft so they can increase flights to and from the United States and unfairly compete against U.S. airlines in the global marketplace,” said Capt. Moak. “At the same time, the U.S. Export–Import Bank’s below-market financing allows U.S. airlines’ competitors to save millions when they purchase widebody aircraft like those announced this week.”

ALPA strongly maintains that growth in the global airline industry should be driven by fair competition. In providing low-cost financing to foreign airlines, for example, the U.S. Export–Import Bank not only saves the state-owned carriers millions on each aircraft, the financing also enables these airlines to purchase state-of-the-art aircraft that are more fuel efficient and attractive to passengers. As a result, U.S. airlines experience a competitive disadvantage for years if not decades, and the results affect U.S. airline workers throughout the industry.

“The secretary general of the Arab Air Carriers Organization had it half-right in an April 2011 speech to the International Aviation Club in which he compared the U.S. airline industry to dinosaurs that will soon die due to their inability to adapt to their environment,” continued Capt. Moak. “If U.S. airlines are to die, it will be due to U.S. government policy and vision that is stuck in a domestic competitive mindset while we do business in a global economic environment.”

“If U.S. airlines that fly internationally don’t grow because their state-owned foreign competitors benefit from unfair marketplace advantages provided by the U.S. government, the airlines that fly the domestic passengers who connect to the international flights won’t grow either,” said First Officer Marcin Kolodziejczyk, chairman of ALPA’s Mesa Air Group pilot group.

“Skewing global competition against U.S. airlines threatens an economic engine that powers the U.S. gross domestic product and creates good jobs,” concluded Capt. Moak. “U.S. government policies should not disadvantage U.S. airlines while helping our foreign competitors and it is past time for U.S. government leaders to take action to create a fair competitive marketplace for U.S. airlines and their employees.”

Founded in 1931, ALPA is the world’s largest pilot union, representing nearly 50,000 pilots at 32 airlines in the United States and Canada. Visit the ALPA website at www.alpa.org.