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What does the Open Skies agreement mean for flight passengers? And why do airlines have a problem with it.

AuthorThe AirHelper

In 1992, the United States pursued an Open Skies civil aviation relationship with international partners after concluding an Open Skies air services agreement with the Netherlands. The agreement sought to help “expand international passenger and cargo flights by eliminating government interference in commercial airline decisions about routes, capacity and pricing.” The goal of the agreement was to provide consumers access to more affordable, convenient and efficient air services. The assumption was that in so doing, it would promote increased travel and trade which would as a result spur high-quality job opportunity and economic growth.

This assumption proved to be true. According to the President and CEO of Airports Council Internation — North America, Kevin M. Burke, “U.S. Open Skies agreements have generated at least $4 billion in annual gains to travelers.” Prior to the agreement cities like Portland and Minneapolis had few or no direct international air connections according to the Bureau of Public Affairs. The agreement has allowed a city like Portland, Oregon to generate over $240 million in airport and visitor revenue.

Since its inception in 1992 and subsequent expansion to over 100 partners from every region of the world, the agreement has been successful in promoting economic benefits to cities, travelers and competing airlines. It has made travel cheaper for travelers, made more US cities accessible to the world and made the world more accessible to many US cities.

Recently, three major US carriers, American Airlines, Delta Airlines and United Airlines have sought to challenge the agreement. The CEOs from these companies have recently begun lobbying the Obama administration to restrict access by rival airlines based in the Persian Gulf. In addition to their appeal, domestic airlines have also sought to prevent the entry of the low cost Norwegian Airlines into the US market.

Many including CEO and President of the US Travel Association agree that “any move to abrogate Open Skies would fly in the face of competition and consumer choice, and ultimately harm demand for travel to the U.S,” as reported by the U.S. Travel Association.

The question is why: why is this now a problem after 20 years? The officially stated reason by the lobbying group is, “unfair competition from the Middle East carriers Emirates, Etihad Airlines and Qatar Airways.” 

Here are some facts to consider:

All things considered, what are your thoughts on the move to challenge the agreement by the big three US carriers?

 

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