March 17, 2015

Fellow ALPA members,

Today, in Washington, D.C., hundreds of aviation stakeholders from across the industry met for the annual U.S. Chamber of Commerce aviation summit. Not surprisingly, unfair subsidies were a hot topic as Etihad Airways was a VIP sponsor of the event and the airline’s president and CEO was a keynote speaker and panelist.

ALPA pilots and staff were also out in full force and, along with other coalition members of the Partnership for Open and Fair Skies, drew attention to the competitive harm that unfair subsidies will cause to the North American airline industry and its workers, including a broad news media audience.

Early in the meeting, Carsten Spohr, chairman of the Executive Board and CEO of the Lufthansa Group, voiced his full support of ALPA’s position on subsidies, stating that he would convey that same message of support when meeting with U.S. government officials.

In his remarks Mr. Spohr said that other global airlines are being “increasingly attacked” by heavily subsidized Middle Eastern carriers, adding that his company will compete with anyone on a level playing field, but can’t compete with these subsidized Middle Eastern carriers.

Doug Parker, Chairman and CEO of American Airlines Group, echoed the same message in his keynote speech today.

Jeff Smisek, chairman, president and CEO of United Airlines also stated during his panel: "We're not competing against airlines. We're competing against the treasuries of Gulf nations."

During one of the panel discussions, James Hogan, president and CEO of Etihad Airways, was asked to agree that his airline received $6 billion in equity infusions. His answer: “I’m not agreeing to anything. We’d like to absorb [the report] and respond to appropriate channels. I’m not coming out with a baseball bat and saying this is a protectionist move. But why can’t a state invest in growing an airline to create jobs?”

I think Capt. Rick Dominguez answered it best when responding to a journalist inquiry:

“There is nothing wrong with having one shareholder or having a national airline except that you signed an aviation agreement where you said that was not happening. A deal is a deal. Live by the agreement that you signed with the United States,” he said.

In the face of the overwhelming evidence of subsidies, Hogan acknowledged: “Yes, we have shareholder equity and shareholder loans: that’s business.” And when Mr. Hogan was asked if he believed Etihad was in compliance with Open Skies. His response: “That’s an issue for the two governments to discuss” -- exactly what ALPA and the Partnership have been advocating.

ALPA’s General Manager, Lori Garver, also had the opportunity during the Summit to reiterate this union’s position to the audience, echoing Mr. Spohr’s comments:

“We agree with Carsten Spohr, Lufthansa’s CEO who said this morning ‘we can compete with any company – we just cannot compete with states.’ We need a level playing field. ALPA is here at the Summit, because we recognize that collaboration is the key to getting there.”

ALPA continues to call upon the CEOs of Etihad Airways, Emirates Airline, and Qatar Airways to be transparent and to compete on a level playing field. And ALPA and its partners will continue to request that the Obama administration open consultations with Qatar and the United Arab Emirates, as allowed by the existing air transport agreements, to get the facts about these airlines’ finances. These consultations must address the flow of subsidized air service to the United States. They must also include the request for a freeze on current passenger service for these countries while consultations are under way.

Two weeks ago, I wrote to you describing ALPA’s role in the Partnership for Open and Fair Skies. Today, that partnership is strong and continues to grow, adding more voices to the chorus of those concerned that if left unchecked, the billions of dollars in unfair Middle Eastern subsidies will mean the loss of American pilots’ jobs.

It’s time the CEOs of these three Middle East carriers commit to doing business transparently and explain the numbers. Because these airlines receive massive government subsidies, they are growing at an astounding rate and expanding their global presence without concern for financial returns.

If you have not already done so, join the more than 5,000 individuals who have already participated and sign the petition. Add yours to names of thousands of individuals who are calling for the U.S. government to restore fairness to Open Skies.

Together, we will continue to lead the fight for a strong and vibrant U.S. airline industry, one that can compete fairly in the global marketplace and one that continues to support North American aviation jobs.


Tim Canoll

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