Global Airlines - Is It a Fair Playing Ground?
1.) The US Department of State's website states that "the open-skies policy is 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" (2017). Two carriers that receive government subsidies are Emirates and Qatar Airlines. Emirates is based out of the United Arab Emirates and Qatar Airlines is based out of the nation of Qatar. both of these carriers are involved in the Open Skies Agreement.
2.) Nearly all US long haul carriers have received government subsidies in the past. In the wake of the 9/11 terrorist attacks, the government voted a week later to give airlines $15 billion in bailouts. this was due to the expected lawsuits that the airlines were expecting to take that would be put towards a victims fund.
3.) The purpose of the Export Import Bank is to guarantee low cost loans to overseas companies buying products built in the United States. The Export Import Bank gives out the loans and ensures that companies making big ticket items like Boeing are paid immediately. The reason that US based airlines oppose the existence of the Export Import Bank are that these same guarantees are not allotted to them, allowing for additional unfair market entry by the gulf carriers. One of the main purposes of the Export Import Bank is to offer incentives to foreign companies to buy US built products.
4.) Norwegian Airlines has created a grey area in the Open Skies Agreement. They are trying to operate very low cost flights between Boston and Europe. According to an article published in the Brigham University Law Review; "Their accomplishment solely rewards travelers and comes at too high a price for both U.S. and Norwegian laborers and airlines; NAI is able to offer such low-cost fights by outsourcing labor to low-cost Asian countries, such as Thailand" (2017). This is a direct breech of the Open Skies Agreement. Gulf carriers like Emirates and Qatar, despite heavy amounts of criticism, still operate while receiving very large government subsidies, another direct breech of the open Skies Agreement.
5.) I feel as though the long haul carrier playing field is relatively not fair. This is in part due to the heavy amount of regulation placed on aviation as a whole in the US. Other countries can take full advantage of this and operate less regulated airlines that end up being able to offer lower fares and be able to compete more competitively with US based carriers. If anything were to happen, it should only be fair that US carriers receive the same benefits that foreign markets have in the Export Import Bank. This would at least alleviate some costs to US carriers without impacting safety in any way. At the end of the day, what price an airline is able to offer will determine how much business it receives. The only thing that could impact these airlines is if they start having several accidents. It will be very interesting to see how the regulations play out over the next several years.
Sources:
U.S. Department of State (2017, July 5). Civil Air Transport Agreements. Retrieved from:https://www.state.gov/e/eb/tra/ata/
Zandamela, Tinesha (2017, April 20). Norwegian Airlines International's Violation of the US/EU Open Skies Agreement,. Brigham Young University Prelaw Review: Vol. 31 , Article 16.
Available at: https://scholarsarchive.byu.edu/byuplr/vol31/iss1/16
2.) Nearly all US long haul carriers have received government subsidies in the past. In the wake of the 9/11 terrorist attacks, the government voted a week later to give airlines $15 billion in bailouts. this was due to the expected lawsuits that the airlines were expecting to take that would be put towards a victims fund.
3.) The purpose of the Export Import Bank is to guarantee low cost loans to overseas companies buying products built in the United States. The Export Import Bank gives out the loans and ensures that companies making big ticket items like Boeing are paid immediately. The reason that US based airlines oppose the existence of the Export Import Bank are that these same guarantees are not allotted to them, allowing for additional unfair market entry by the gulf carriers. One of the main purposes of the Export Import Bank is to offer incentives to foreign companies to buy US built products.
4.) Norwegian Airlines has created a grey area in the Open Skies Agreement. They are trying to operate very low cost flights between Boston and Europe. According to an article published in the Brigham University Law Review; "Their accomplishment solely rewards travelers and comes at too high a price for both U.S. and Norwegian laborers and airlines; NAI is able to offer such low-cost fights by outsourcing labor to low-cost Asian countries, such as Thailand" (2017). This is a direct breech of the Open Skies Agreement. Gulf carriers like Emirates and Qatar, despite heavy amounts of criticism, still operate while receiving very large government subsidies, another direct breech of the open Skies Agreement.
5.) I feel as though the long haul carrier playing field is relatively not fair. This is in part due to the heavy amount of regulation placed on aviation as a whole in the US. Other countries can take full advantage of this and operate less regulated airlines that end up being able to offer lower fares and be able to compete more competitively with US based carriers. If anything were to happen, it should only be fair that US carriers receive the same benefits that foreign markets have in the Export Import Bank. This would at least alleviate some costs to US carriers without impacting safety in any way. At the end of the day, what price an airline is able to offer will determine how much business it receives. The only thing that could impact these airlines is if they start having several accidents. It will be very interesting to see how the regulations play out over the next several years.
Sources:
U.S. Department of State (2017, July 5). Civil Air Transport Agreements. Retrieved from:https://www.state.gov/e/eb/tra/ata/
Zandamela, Tinesha (2017, April 20). Norwegian Airlines International's Violation of the US/EU Open Skies Agreement,. Brigham Young University Prelaw Review: Vol. 31 , Article 16.
Available at: https://scholarsarchive.byu.edu/byuplr/vol31/iss1/16
Comments
Post a Comment