Could Change in Administration Translate to Favorable Terms for Legacy Carriers?

The tail end of the Obama administration has seen Delta, American and United hit hard by competition from heavily subsidized Gulf carriers. Could things be about to change?

For U.S. carriers struggling to compete against the heavily subsidized state-owned airlines of the Persian Gulf nations, Donald Trump’s imminent presidency holds promise.

For the last eight years, American, Delta and United have unsuccessfully petitioned the Obama administration to renegotiate the terms of the Open Skies Agreements, a series of accords which allow airlines from more than 100 countries unfettered access to one another’s airports without undue interference from national governments. However, the rapid expansion of the likes of Etihad and Qatar airways and Emirates has raised alarm bells among America’s trio of international carriers, who say that the Gulf airlines threaten the livelihood of those within the U.S. commercial aviation industry.

Jill Zuckman, spokeswoman for the Partnership for Open and Fair Skies, told The Washington Post that, “We look forward to briefing President-elect Donald Trump and his new administration on the massive, unfair subsidies that the UAE and Qatar give to their state-owned Gulf carriers.”

She added, “The Gulf carrier subsidies threaten the jobs of 300,000 U.S. aviation workers and the American aviation industry as a whole, and we are optimistic that the Trump administration will stand up to the UAE and Qatar, enforce our trade agreements and fight for American jobs.”

The hope is that Trump’s protectionist rhetoric, as seen during his campaign for the presidency, will eventually translate into more favorable terms for American, Delta and United. During the last year, these three carriers say that competition from Etihad, Qatar and Emirates has resulted in a 20 percent drop in passenger load to Middle Eastern and Asian destinations.

While these Gulf-based airlines have rejected the notion that they are receiving subsidies from their respective governments, the American carriers maintain that Etihad, Qatar and Emirates are taking unfair advantage of the Open Skies Agreements.

[Photo: Getty Images]