HomeMy WebLinkAboutExhibitA LEVEL PLAYING FIELD FOR ALL
Subsidies and Other Unfair Benefits Received by Gulf Carriers Threaten U.S. Aviation Jobs, the
Industry and our Economy
Beginning in 1992 with the negotiation of the veryfirst Open Skies agreement, the United States has explicitly and
rigorously insisted that in exchangefor granting foreign airlines thefreedom to fly to andfrom the United States,
Open Skies partners ensure alevel, competitive playing field, Anticipating that circumstances could change, the
United States and its Open Skies partners have also agreed that every Open Skies agreement has a provision for
consultations to address problems relating to the ogreements and to agree /n goodfb/th on measures to resolve
them,
Evidence gathered during global, two-year long investigation reveals that two countries with Open Skies
agreements, Qatar and the UAE, have been providing massive subsidies and other extraordinary benefits to their
state-owned airlines that have already caused a substantial distortion of international markets. |funchecked, these
practices could threaten the airline industry, aviation jobs, and communities throughout the United States.
The Playing Field Isn't Level
Because these Gulf carriers are highly subsidized, they have grown atan
astounding rate, expanding their global presence without concern for
financial returns.
^ Over the past decade, the governments ofQatar and the UAE
have granted $42billion insubsidies and other unfair benefits tu
their state-owned carriers.
w These Gulf carriers aren't subject tocorporate income taxes or
fuel taxes and are exempt from costly requirements imposed on
their foreign competitors, allowing the carriers toavoid paying
their own way.
• The governments ofQatar and the UAEhave banned unions and
suppress the rights oftheir employees, saving their carriers
billions ofdollars from below -market labor costs.
How This Hurts U.S.Carriers and Impacts American Jobs
The massive subsides for state-owned Gulf carriers undermine fair competition, provides substantial cost
advantage over U.S. and other non'Gu|fcompetitoo, and violates Open Skies. Even a small cost advantage can result
in a significant shift in market share tuthe Gulf carriers' advantage and substantial losses for their unsubsidized
competitors. Ultimately, the distortion caused byunfair competition isnot inthe best interests ofthe aviation
industry, or consumers.
Every round trip route lost or forgone by a U.S. carrier because of subsidized Gulf carrier competition results in a
net loss ufover 8O0U.S.jobs.
The Solution
We urge the U.S. government to request consultations about Gulf airline subsidization, through the existing Open
Skies agreements, to ensure fair and equal competition. The U.S. government should also freeze the introduction
ofnew passenger service bythe Gulf carriers during these consultations.
For more information visit Upenonoƒbirskiescomorƒo0om/usonTwitter ot @OpenFoirIkies