1) Describe the US-UAE Open Skies Agreement. List and describe two long-haul carriers that are a part of this agreement that also receive government subsidies.

     The Open Skies Agreement is a policy that eliminates the governments involvement in the airline decision-making process. These decisions are routes, capacity, and pricing for international markets. (State Department) Two of the long-haul carriers in the Open Skies Agreement are Etihad Airways and Qatar Airways. Both airlines are based in the middle east and receive government subsidies.

2) Do any long-haul US carriers receive subsidies or have received subsidies in the past? If so, which airlines? Why?

     The answer is yes. According to Kevin Mitchell, Business Travel Coalition chairman, every airline is funded by its’ home government. (McGee, 2015) When you fly commercially there are taxes and fees on that ticket. These are used to fund commercial aviation. This is not a new idea. The government was instrumental in the formation of the legacy airlines through the Contract Air Mail Contract Act of 1925. These legacy long-haul carriers are Delta, United, and American.

3) Another complaint is that long-haul foreign carriers have made aircraft purchases at "below market interest rates" that are unavailable to US carriers. How is this possible? Please discuss the Export-Import Bank.

     The foreign long-haul carriers can secure better financing by going through the Export-Import Bank in other countries, as well as the U.S. Export- Import Bank. This enables them to get reduced borrowing costs which is then used to lower ticket prices to the U.S or even purchase new aircraft. (Weisman, Lipton, 2015) This is accomplished through the fact that Boeing’s main rival, Airbus, is in Europe This allows the German and French credit agencies to offer purchase guarantees.

4) Are there any current issues with Norwegian International Airlines (NIA) and the Open Skies Agreement? What about with carriers such as Emirates or Qatar?

     There are issues with Norwegian International Airlines and the Open Skies Agreement. The Department of Transportation approved the request from NIA to serve the U.S. This approval was granted in 2016. The issue is that Norwegian Long-Haul AS is based in Norway, but NIA is based out of Ireland. This give NIA the right to request permission to service the U.S. (Cranky Flier, 2016) The issue with Emirates and Qatar is that they are heavily subsidized by their home government and therefore have an advantage over the U.S. airlines.

5) Finally, critically analyzing the above information, do you feel that the global "playing field" of long-haul carriers is fair?

     I believe the players in the Open Skies Agreement are playing on a field that is even as it is going to get. Both the U.S. and the international players are receiving some sort of subsidy from their home governments and they are working within the ground rules of the Open Skies Agreement. Long haul carrying of passengers internationally, after all, is a business and each airline involved is using the rules to the best of their advantage.

REFERENCES
U.S. Dept of State. Retrieved March 16, 2018 from https://www.state.gov/e/eb/tra/ata/

Mcgee, Bill. (September 2, 2015) How much do taxpayers support airlines? Retrieved March 16, 2018 from https://www.usatoday.com/story/travel/columnist/mcgee/2015/09/02/how-much-do-taxpayers-support-airlines/71568226/

 

Cranky Flier. Retrieved March 17, 2018 from http://crankyflier.com/2016/12/05/if-you-dont-like-norwegian-air-international-being-approved-to-fly-to-the-us-blame-the-authors-of-the-open-skies-agreement/
Weisman, Jonathon and Lipton, Eric. (April 6, 2015) Retrieved March 17, 2018 from https://www.nytimes.com/2015/04/07/business/boeing-delta-air-lines-export-import-bank.html

Comments

Post a Comment

Popular posts from this blog

Military Current and Future Use of UAVs

     The use of unmanned aerial vehicles (UAV) for military applications is not new. The military has been using this technology in some shape or form beginning in the 19th century when Austrian forces launched balloons equipped with time-fused bombs against Italy. (Kantor, 2016) Even though the technology has advanced, the concept of using UAVs in the battlespace remains the same. Ask any soldier on the ground what their best friend is and they will answer "their weapon and battle buddy" followed closely by the "eye in the sky". The UAVs used today are so sophisticated that they can not only see over the next hill and farther, but can also be used to intercept and jam communications. They can also be armed with munitions and used as attack vehicles without putting soldiers in harms way.           If you have watched any news since we went to war with Iraq, you are familiar with the usual suspects in the military UAV aresenal. These are the Predator and all its v
Read more

Mental Illness and the Aviation Industry

            The Germanwings accident in 2015 brought the mental state of pilots top the forefront. According to the transcripts of the flight data recorder from that flight, Andreas Lubitz changed the autopilot settings to make a rapid descent that ultimately resulted in the aircraft striking the side of a remote spot in the Alps. The cockpit voice recorder recorded the sounds of the flight crew beating on the cockpit door after the pilot returned, probably from the bathroom. Also, just after the pilot left the cockpit, attempts to reach the aircraft were met with silence. The First Officer, Lubitz, had been grounded and had his training suspended in 2008 during a severe episode. (Huggler, 2017) He was later cleared to fly after he had recovered. In the months leading up to the crash, Lubitz was believed to be losing his eyesight. He had hidden this from Germanwings.             Mental illness in aviation is rare, but there are accidents and incidents that have occurred because
Read more