The airline industry group lobbying for a freeze on Open Skies agreements is serving up leftovers again. Here's why Open Skies is good for the U.S. economy, U.S. employment and U.S. travelers.
The airline industry group lobbying for a freeze on Open Skies agreements is serving up leftovers again with another “report” attacking Open Skies. Like previous iterations, the most current helping is meant to gin up support for protecting U.S. legacy carriers from any kind of competition, going so far as to call out specific U.S. cities—Orlando, Chicago and San Francisco—in a nativist attempt to cry foul on American jobs.
It’s not worth a lot of time picking apart this line of argument the Big 3 airlines have been pushing for some time; unlike many things, the more often they say this one, it’s never going to be true.
As an ardent advocate for U.S. economic growth, competition and travelers, U.S. Travel was curious about whether the airlines were at all correct about ill effects due to service from Persian Gulf carriers. We asked Oxford Economics to examine the question, and sure enough: the results the firm found utterly refute the assertions made by the Big 3.
Of the many compelling figures offered in the executive summary alone, I’ll highlight just two that are directly relevant to the Big 3’s recent round of publicity:
- Across the 11 US cities directly served by the Gulf carriers, tourist spending generated a more than US $ 4.1 billion contribution to GDP in 2014. This spending supported almost 50,000 jobs in these cities, provided more than US $ 2.6 billion in labor income, and generated more than US $ 1.1 billion in federal, state and local taxes. Further activity and employment was generated beyond the 11 cities because of passengers connecting through.
- In 2014, just 0.7 per cent of international passengers travelling on a Big Three flight had a Gulf carrier alternative on that route.
That second bullet has admittedly changed slightly because Gulf carriers have added a few routes (over the strident objections of the U.S. Big 3). And to that we say: good!
The Big 3 single out Orlando, Chicago and San Francisco as being particularly imperiled by the presence of the Gulf carriers. If they wanted a clear picture of the sense that those cities have about the economic dangers of Open Skies, the Big 3 might have saved themselves a lot of trouble if they had asked relevant interests in Orlando, Chicago and San Francisco.
A decision on the Big 3’s petition to freeze Open Skies is due from the Obama administration at literally any moment—and even though the docket is closed, it’s clear the major U.S. airlines are determined to keep litigating the issue in the media. Let’s hope 2016 puts an end to this attack on a policy that has inarguably benefited the U.S. economy, U.S. employment and U.S. travelers.