Arab American Institute Accuses U.S. Carriers of "Demonising" Gulf Airlines

The author of the report, James Zogby, president of the Washington, DC-based Arab American Institute, claims that the case of the U.S. coalition is weak, and the carriers therefore have "shamefully stooped to subtle and not-so-subtle Arab-baiting in the effort to demonise the Arab carriers."

Pumping petro dollars into aviation
Zogby notes that in one of the advertisements, which forms part of a coalition-sponsored TV and radio campaign, the three Gulf carriers are described as coming from the “oil rich Arabian peninsula” and receiving “billions of government oil money.” An accompanying graphic shows an Oriental-looking structure that turns out to be an Arab bank pumping dollars into an airplane.

"The crass comments and the content of the U.S. airline coalition’s ads are part of a tried and tested strategy used by politicians and businessmen alike," says Zogby, adding that the Arab-bashing is deliberate. "Polls on the subject have established that if a politician speaks about “dependency on oil” he gets a less emotional response than if he were to add “Arab” or “Arabian” or even “Middle East”. And just as politicians pay attention to such polling data, so do airline CEOs."

Washington aided U.S. airlines over decades
According to the Arab American Institute president, the U.S. airlines’ campaign is based on "flimsy" charges of subsidies and protectionism. He says that a little known U.S. Congressional Research Service (CRS) report on massive U.S. government subsidies and financial aid to the U.S. airline industry shows that, between 1918 and 1998, the federal government spent U.S.$155 billion dollars in support of aviation activities. The full report was never published. WikiLeaks secured a copy of the full report and quietly released it in 2009.

The 1999 CRS report states that the U.S. airline industry has benefited from billions of dollars of additional federal, state and local government subsidies and bailouts and unique structural advantages. U.S. carriers have significantly reduced expenses in bankruptcy proceedings, shift pension liabilities to the Pension Benefit Guaranty Corporation, benefit from general revenues from the U.S. Treasury that flow into the Airport and Airway Trust Fund and avoid ticket taxes on billions of dollars in revenues through ancillary fees and carrier-imposed charges.

Ongoing funding
In addition to the post 9/11 bailout and loan guarantee bills, the U.S. government continues to fund infrastructure and operational services and to provide subsidies to U.S. airlines for “essential air services” (subsidies underwriting costs for airlines to keep smaller markets on their routes) and the “reserve air fleet” (subsidies for agreeing to make their planes available, if needed, to the government).

There’s also an indirect subsidy in the form of the requirement that government employees must “fly American”. Airports and the air traffic control infrastructure are built and maintained by tax-exempt entities. And a federal law prohibits foreign carriers from flying passengers between U.S. cities.

Mounting rift between U.S. organizations over role of ME carriers
In a reaction to the CRS report, the Business Travel Coalition (BTC) has urged Washington to not lose sight of the enormous benefits of vigorous airline competition and the economic value that Open Skies, versus more restrictive aviation policies, has delivered to consumers, tourism, the U.S. aerospace sector, express and cargo carriers, shippers and the U.S. national economy.

In a related development, U.S. airline unions, which are supporting the U.S. carriers' claims, have accused U.S. Travel Association president, Roger Dow, of “defending companies with abhorrent labor standards.”

“Employees of these airlines aren’t granted fundamental human rights that are enjoyed by most workers in today’s world,” the unions wrote. “Mr. Dow is standing up for companies that demand female employees obtain permission before getting married or pregnant. And he is defending companies that bar lesbian, gay, bisexual and transgender people from employment."

Afraid of healthy competition?
Dow responded to the union criticism by accusing U.S. airlines of trying to “smear” Middle Eastern airlines because they are afraid of competing with them.

"Casting about for ways to smear the Gulf carriers won't change the fact that Open Skies has been overwhelmingly beneficial for US consumers, U.S. job creation and the U.S. economy,” he said in a statement. “Just because the Big Three have an air service oligopoly, other sectors of the economy that create scads of jobs thanks to international visitors should not be harmed just because the legacy carriers are afraid of a little healthy competition."

Nol van Fenema