Following the Spirit of the Fly America Act
The Fly America Act supports the transportation of U.S. government personnel, contractors, and cargo on U.S. airlines. A healthy and vibrant commercial airline sector is vital to our national security, and airlines seeking to bid on government travel awards must commit aircraft to military use in time of emergency. Recent decisions by the General Services Administration (GSA) fail to follow the Fly America Act.
GSA indirectly awarded government contracts to fly government passengers and freight to a long-haul foreign carrier, in which the foreign carrier agreed to a code-sharing arrangement, whereby it allowed a short-haul U.S. air carrier that could not operate the service with its own aircraft to sell seats on the foreign plane under the U.S. carrier’s two-letter designator code. This arrangement ceded the actual flying to the foreign carrier.
Since 1974, passengers and cargo whose travel is paid for by the U.S. government have generally been required to obtain transportation provided by a U.S. airline; this provision is known as the Fly America Act. The General Services Administration (GSA) implements this provision through the City-Pairs Program. Every year, the GSA awards more than 12,000 city-pairs at a government rate to airlines who bid for the privilege of carrying taxpayer-funded travel.
Up until 2015, the GSA required that, if an air carrier intended to serve a city-pair through a code share, the U.S. carrier must still be responsible for the service, receive a “substantial portion of the revenue,” and “not act as a mere booking agent on behalf of” a foreign partner. Recently, however, the GSA overturned this long-standing precedent by effectively awarding government contracts to Emirates Airline through a code share with JetBlue. For FY2017, JetBlue was awarded seven routes between the United States and Dubai, UAE, as well as the traffic between New York City and Milan, Italy. Unlike other code shares in which the United States and the foreign partners could operate the service, but for business reasons, one does not do so, JetBlue did not have aircraft economically capable of flying these routes, rendering JetBlue “a mere booking agent,” renting the use of its code to the foreign airline.
This reinterpretation of Fly America, which allows companies to bid on routes without any ability or intention to fly them, specifically excludes the airline employees whose income taxes support the cost of this travel. While the company might make a profit off these deals as a booking agent, the pilots, flight attendants, gate agents, and others are not paid if these passengers are not flying on their planes.
- GSA should cease the practice of awarding contracts for international carriage to airlines that do not have aircraft under their control capable of fulfilling the contract.
- The GSA should immediately correct its policy and regulations to ensure that no U.S. airline be allowed to rent its code to a foreign airline to win a Fly America contract.
- Congress should clarify the existing Fly America statute to give meaning to its original intent: government-funded travel should place maximum reliance on using U.S. flag carriers staffed by U.S. flight crews.