Impact of subsidies by foreign governments will be felt in Illinois
WASHINGTON, D.C. –(ENEWSPF)—April 20, 2015. In a letter to the Secretaries of Transportation and State, U.S. Senator Dick Durbin (D-IL) today cautioned that fair and open competition in the airline industry may be at risk if the three largest airlines of the Gulf States of Qatar and the United Arab Emirates (UAE) are receiving substantial government subsidies. Recent reports have indicated that these subsidies are distorting the market for air travel and giving airlines an unfair advantage over U.S. carriers.
In today’s letter, Durbin indicated that “the ramifications of these subsidies will be particularly felt in Illinois, which is home to Chicago’s O’Hare International Airport.”
As the second busiest airport in the nation, O’Hare is the only U.S. airport supporting two competing international hub networks. United Airlines and American Airlines support roughly 25,000 jobs in the state and have invested heavily to build international route networks at O’Hare that connect mid-sized and smaller Illinois communities– including Bloomington, Champaign, Decatur, Moline, Peoria, and Springfield–to the rest of the world.
Durbin urged the Obama Administration to provide rigorous oversight and consulting with Qatar and the UAE saying, “I urge you to carefully review this situation and consider appropriate action to uphold the legacy of our Open Skies agreements…Unfair competition by foreign subsidized airlines has the potential to overwhelm U.S. carriers on key international routes and cause air service cuts and job losses as U.S. carriers are forced to exit these routes.”
The United States has 114 Open Skies agreements which, according to the State Department, 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. Open Skies agreements do this by eliminating government interference in the commercial decisions of air carriers about routes, capacity, and pricing, freeing carriers to provide more affordable, convenient, and efficient air service for consumers.
Text of today’s letter is below and attached:
April 20, 2015
The Honorable Anthony Foxx The Honorable John KerrySecretary Secretary
U.S. Department of Transportation U.S. Department of State
1200 New Jersey Avenue S.E. 2201 C Street N.W.
Washington, D.C. 20590 Washington, D.C. 20520
Dear Secretary Foxx and Secretary Kerry:
I write to express my concern regarding recent reports that the three largest airlines of the Gulf States of Qatar and the United Arab Emirates (UAE) are receiving substantial government subsidies. Market distortion caused by state subsidies give these airlines an unfair advantage over U.S. carriers. As such, I urge you to carefully review this situation and consider appropriate action to uphold the legacy of our Open Skies agreements.
I commend the Obama Administration’s success in continuing the Open Skies policy of previous Administrations. Because of your efforts, the United States now has 114 Open Skies treaties and provides U.S. consumers and communities with greater choices in international air travel. While fair and open competition is the foundation of the Open Skies agreements, government subsidies by the Gulf States have disrupted the level playing field, forcing U.S. carriers to compete with foreign governments rather than foreign airlines. This distortion puts the foundation of our Open Skies agreements at risk and has the potential to render the agreements meaningless.
The ramifications of these subsidies will be particularly felt in Illinois, which is home to Chicago’s O’Hare International Airport. O’Hare is the second busiest airport in the nation and is the only U.S. airport supporting two competing international hub networks. United Airlines and American Airlines support roughly 25,000 jobs in the state and have invested heavily to build international route networks at O’Hare that connect mid-sized and smaller Illinois communities– including Bloomington, Champaign, Decatur, Moline, Peoria, and Springfield–to the rest of the world. Unfair competition by foreign subsidized airlines has the potential to overwhelm U.S. carriers on key international routes and cause air service cuts and job losses as U.S. carriers are forced to exit these routes. The Administration can help prevent these losses by providing rigorous oversight and consulting with Qatar and the UAE to encourage fair competition in the international aviation marketplace.
Thank you in advance for your attention to this important matter.
Sincerely,
Richard J. Durbin
United States Senate
Source: durbin.senate.gov
