The USA-UAE open skies agreement was created in the year 2002. This agreement
aimed at encouraging a global aviation system based on competition among
carriers in the industry with minimal government regulation and interference
(AFS, 2017). It also aimed at
facilitating the expansion of global air transport opportunities, allowing
airlines to provide traveling and
shipping public numerous service alternatives at reduced costs and desiring to
ensure a high degree of safety and security in global air transport, and
reaffirming their great concern about actions against the security of flights
(AFS, 2017). The agreement comprised twelve articles that include definitions, grant of rights,
designation and Authorization, revocation of authorization, application of
laws, safety, Aviation security, commercial opportunities, customs duties and charges, user charges, fair competition, and pricing. The two airlines
include Etihad and Emirates Airways. The U. S aviation
industry alleges that both airlines
received more than fifty million dollars (50M USD) as subsidies from the United Arab Emirates and Qatar governments.
There are allegations that the three U.S giant
carriers namely American Airlines, Delta Air Lines,
and United Airlines once received subsidies during the early 2000s due to
bankruptcy and subsidized fuel costs (Snoj, 2015). For instance, Delta Airlines received 84.8 million loan guarantees
from the Export-Bank in 2012 and significant fuel tax breaks. Based
on the alleged 2009 WikiLeaks report, the Federal government funded various
aviation participants including airports, the FAA,
and various airlines.
The major challenge,
in this case, is the increased demand for
aircraft. The UAE carriers order planes in bulk which might result in reduced
overall costs compared to the American Airlines (Snoj, 2015). Furthermore, increased
demand for airplanes also increases their
costs making most American airlines to spend additional resources in acquiring
the planes. Consequently, the American Airlines
purchase planes at higher costs compared to the UAE carriers.
Norwegian International Airlines (NAI) has some
controversies in its operations that threaten the United States’ aviation
industry. The Norwegian Air is based in
Dublin instead of Norway. Critics argue that NAI’s operations in Dublin enable the airline to take advantage of
Ireland’s employment regulations that are less stringent compared to the
Norway’s regulations. Consequently, they argue that NAI can employ lower-cost
pilots and cabin crew members from Asia to operate the trans-Atlantic routes. Some
aviation experts consider the NAI policy as a strategy of dodging laws and
taxes. These alleged issues have brought
a lot of pressure after the U.S Transport
Department established an open skies agreement with the airline. The aviation
participants view the move of granting NAI the permit to operate in the USA as
a betrayal to the America’s aviation employees. They further argue that the
move threatens a generation of US airline jobs and communicates a negative image of America worldwide. NAI
violates the labor protections by evading Norwegian taxes and planning to hire
crews based on Asian contracts. As such, Trump’s administration might cancel
the agreement to protect the American aviation industry from exploitation.
I believe the playing field is fair. It is the
responsibility of airlines to improve their operations and services as a
strategy for attracting more travelers.
It is evident that all governments usually establish open skies agreement with the aim of building their economy. For
instance, the three UAE carriers are the major clients of the Boeing
manufacturing firm, and they also create suitable
and job opportunities business ties between UAE and America. Consequently, the
United States gains a lot from such agreements,
and it is very difficult to cancel all the open skies agreements due to unfair
competition. It is advisable for airlines to develop alliances or establish
additional sources of finances to expand their operations to compete with the foreign
carriers.
References
AFS,
(2017). The U.S- U.A.E Open Skies Agreement. Retrieved from
Snoj, T. (2015). Open Skies Indeed. Retrieved from