How best to counter allegations by the big US carriers that their Gulf counterparts are violating the spirit of the Open Skies agreement?A good place to start is with the passenger.
Market dynamics dictate that passenger satisfaction is the key to growth. The extension of operations by Gulf carriers to US airports has made travel on key global routes cheaper and more efficient. Options have increased and costs have come down. The passenger has no interest in being used as a pawn in a game aimed at propping up unions and maintaining privileges.
The US airline industry has itself sought shelter under the regulatory wing of government in the past and in seeking to amend the Open Skies agreement is doing so again. Ironically, given the allegations against Gulf airlines, US consumer and tourism groups have themselves criticised the lack of competition in the US domestic market due to airline consolidation and antitrust immunity grants.
US carriers hardly committed themselves to a credible global strategy in the first place, offering limited long haul options. Are we seriously to believe that if Gulf carriers ceased operations tomorrow, US carriers would immediately embark on an investment programme aimed at providing comparable services to long haul travellers?
Much has been made by the US carriers of unfair "subsidies" for their Gulf counterparts. In support of this, they recently circulated a report , based in large part on a cut and paste pastiche of assumptions gleaned from financial information filed by the Gulf carriers themselves. The lack of organised labour in Gulf states is recast as "subsidy" and government investment, especially in the case of Etihad, is framed as a handout when in fact it carried from the start an expectation of repayment and early returns. As James Hogan, Etihad president and CEO, said on these pages yesterday, profit, not profligacy, remains utmost for Etihad's ultimate shareholder.
US airlines carriers sound like the player who, unable to compete on the soccer field, takes the ball home at half time in an attempt to stop the game. In this case, the game will continue regardless.