One of the hottest “political” topics in the airline industry this year has been the battle for Open Skies, going on between the “big three” US carriers (American, Delta, and United) and the “big three” Gulf carriers (Emirates, Etihad, and Qatar).
As I’ve explained, I think the US carriers are right for expressing their grievances, regardless of whether anything comes of it or not. Unfortunately the way the US airlines have been trying to make their case has been nothing short of humiliating, so the Middle Eastern carriers are almost winning by default.
While there are six “primary” airlines involved in this debate, it’s interesting when other airlines chime in. For example, British Airways has denounced the argument of the US carriers, probably thanks in no small part to Qatar Airways having a stake in them.
Now we’re seeing JetBlue chime in on the topic, and they have an interesting perspective. Admittedly they have their own motives, but at least they’re making a good point.
So the US legacy carriers think that the Gulf carriers are stifling competition? JetBlue has a different take, and thinks the US legacy carriers are stifling competition with their joint ventures. Via BloombergBusiness:
U.S. regulators should review the agreements known as immunized joint ventures to ensure they are “truly benefiting the traveling public,” JetBlue said in a letter to the secretaries of the State, Commerce and Transportation departments Tuesday. The accords should be re-examined periodically, the airline said.
“Left unchecked, this U.S. government-sanctioned collusion will continue to stifle innovation and competition in international aviation and will directly harm JetBlue and consumers,” said the letter signed by Robert Land, senior vice president for government affairs.
“Just as the three U.S. legacy carriers currently alleging unfair subsidies have exhibited anti-consumer behavior domestically, they have relied upon their immunization from antitrust laws, granted by DOT, to thwart competition internationally,” JetBlue said. The three “have a history of overcharging consumers whenever the opportunity arises.”
And JetBlue is probably onto something. Each of the three major alliances has a transatlantic joint venture, whereby they share revenue and fix pricing. Given how focused the US airlines are on “unfair pricing,” that’s a point that’s worth bringing up. Of course JetBlue isn’t making this point out of the kindness of their heart. JetBlue has codeshare agreements with dozens of airlines, so they want fewer joint ventures, and not more of them, so they have more codeshare opportunities outside those joint ventures.
How does the “Partnership for Open & Fair Skies” respond?
The big three U.S. airlines say that the immunized agreements are good for passengers. Venture partners share revenue, reducing the need to boost prices on the segment each carrier operates, the U.S. Transportation Department has said.
“Experts have long recognized that joint venture agreements between airlines allow passengers to fly more easily to more places around the world for lower fares,” said Jill Zuckman, spokeswoman for the Partnership for Open & Fair Skies formed by Delta, American and United.
Kudos to JetBlue. They’re the only US airline which is calling the US legacy carriers out on their shenanigans, as far as I know.
@washeelers: KLM and LH had some of the most outdated, awful hard product of any airline. They still don't have lie-flat seats in business across their whole fleets. Ever tried the old KLM and LH seats? I'd rather sit in economy, honestly.
So they are in fact lagging many years behind the big 3 US carriers in that respect (UA has had lie-flat seats for years, DL even better seats now for a couple...
@washeelers: KLM and LH had some of the most outdated, awful hard product of any airline. They still don't have lie-flat seats in business across their whole fleets. Ever tried the old KLM and LH seats? I'd rather sit in economy, honestly.
So they are in fact lagging many years behind the big 3 US carriers in that respect (UA has had lie-flat seats for years, DL even better seats now for a couple of years, AA is getting close to have great lie-flat seats across their whole international fleet). The "massive investment" of LH and KLM is about 10 years too late, and won't be finished for about another year.
Also the big 3 have a lot of new planes on order etc so I don't know where you get the idea they're not investing in their product.
It's long been my hope that Jetblue can grow further into an international airline - if they do, I will switch to them exclusively as I prefer them to any US airline. Already I'm thrilled with "Mint"!
Zuckman must smoking some good stuffs.. TATL JV partners offer lower fares? LOL. Everyone remember days when it's reasonable to find $400-500 deals to Europe.
Btw, good reminder why competition is good for customers.. LH and KLM announced massive investment to improve their products. Kudos for trying to improve instead of sit and whine like US3
The big three should stop whining and instead make their airline better so Americans actually WANT to fly them. That will speak louder than any argument they make in the press about unfair subsidies.