Open Skies
The open
skies agreement with the US-EAU allows for flexibility and freedom while flying
into the members airspace. The agreement takes away government impact with
routes, fares, and capacity which allows for cheaper and more convenient
flights around the world (U.S Department of State, 2016). According to
Americans for open skies, both Qatar Airways and Etihad Airways have subsidies
that value close to 18 billion each.
I couldn't
find an airline that is subsidized for long haul flight. Since the
deregulation, US airlines have freedom and are not so bound by the government. I
did find an article in which Delta, American Airlines, and United Airlines are
discussing issues with U.S officials that government owners of the airlines
apart of the EAU are receiving a large amount of cash which goes against the
open skies agreement.(Britton, 2016)
With new
aircraft being built such as COMAC in China, there is starting to become a
competition in the US with other markets. The EXIM bank supports sales to the
foreign markets to help lower the playing field. With the new aircraft insight,
American suppliers are seeking help from EXIM to support sales to Airbus
airline customers. EXIM will finance the export of U.S produced goods and
services for
aftermarket (post-manufacturing) use on foreign-manufactured large aircraft for
U.S. exporters of all sizes. (EXIM, 2017)
Norwegian Air has
caused a lot of controversy between the US and Europe. There are labor concerns
as well as pricing concerns. As of now, they are approved to be a member of the
open skies agreement and are currently working out approval from Ireland which
has caused a lot of back lash due to issues within the company. There ridiculously
cheap flights will be a problem for the competition. This airline could drive
down the cost to fly overseas from all American Airlines. (Posaner, 2016)
I personally feel
there is somewhat of a disadvantage of long haul carriers. Every Country has
laws to follow and they may be different from other countries. No 2 countries
will have exact regulations on Airlines which makes it had for there to be a
level playing field. Cheap airlines such as Norwegian can become a force in the
long-haul carriers making it hard for many other airlines to compete with. For
these reason I feel there will never be a level playing field in this industry.
References
Britton, R. (2016, October 24). Subsidized Gulf
Airlines Continue To Dump Seats In The U.S. Retrieved March 11, 2017, from
http://www.huffingtonpost.com/rob-britton/subsidized-gulf-airlines-_2_b_12588256.html
The Facts About Open Skies. (n.d.). Retrieved March
11, 2017, from http://fairskies.org/the-facts/
Posaner, J. (2016, September 02). Norwegian
airline clouds open skies. Retrieved March 11, 2017, from
http://www.politico.eu/article/norwegian-airline-nai-ireland-us-open-skies/
I like that you were short and to the point, I have a hard times of going on a tangent while writing these blogs. I agree with your assessment of the long haul disadvantage,especially with companies that can cut any corners by selecting where the best place to put their labor force is. This allows for a lot of self sanctioning.
ReplyDeleteMost U.S long haul carriers are even though not considered subsidized by the WTO are given stipends do to 9/11 which helps to recover fro the loss of traffic flow since then.
Great blog!
ReplyDeleteThis is such a large topic with so much information that even after doing a lot of research myself, I still learned a lot from your blog as well. For example in question 1 I find it amazing how much money the government is putting into these companies. 18 Billion is a huge amount, and hopefully they are using it to the best of their ability. We also agree when it comes to the last question too. Majors still dominate in pretty much all aspects except when they run into low cost carriers. However, you get what you pay for at those airlines, so it is a consumer run market. If people are willing to pay, the majors will continue dominating. If people want to pay less, then the low cost carriers get some business as well.
I agree with your point that there will never be an even playing field in the airline industry. I personally feel that there are way too many layers to even in order to make a fair playing field. The aviation industry is very complex and no amount of regulation will ever make a 100% even playing field.
ReplyDelete