Trump Needs To Save US Airlines From Collapse

Filed Under: Misc.

…at least that’s what some are suggesting.

I feel like we live in a time where facts simply don’t matter anymore, and I think sometimes those have to be called out, even if it’s like beating a dead horse.

Townhall has a story about how President Trump will be meeting with the Emir of Qatar on July 9, 2019, and how this is an opportunity for Trump to “school” him. The story explains that Trump should confront the Emir of Qatar about many things, including the following:

President Trump can also discuss Qatar’s disregard of commitments made between our two countries to help ensure fair international airline operations outlined in the Open Skies trade agreements. Qatar and the United Arab Emirates ignored those commitment for several years, subsidizing their airlines, which violated the rules and gave their airlines an unfair advantage.  This put our airlines – and the many who they employ – in a dangerous position.

As @kenblackwell points out, Qatar’s state subsidies for it airline industry is going a long way towards putting US carries out of business. This is in violation of an agreement with the US—and something you’d think @realDonaldTrump would care a lot about.

This is so absurd and far from having any basis in reality that I can’t help but call it out.

US airlines are on the verge of collapse?

I mean, I feel like I don’t even need to comment here. All things considered, US airlines have never been in a better situation.

The US airline industry is bigger than ever before. The US airline industry is employing more people than ever before. American’s CEO even bragged about how the airline will never lose money again, and will make a minimum of three billion dollars per year.

As a passenger I sure feel like there’s not enough competition in the US. Just look at how uncompetitive the “big three” US airlines are with one another.

What’s next, should we start being sympathetic towards telecom companies?

Qatar is violating their Open Skies agreement?

In early 2018 the US and Qatar reached an agreement, which stated the following:

  • Within one year, Qatar Airways will release audited financial statements in accordance with internationally-recognized accounting standards, and within two years they will disclose any transactions with other state-owned entities, such as caterers or other companies that support airline operations
  • A side letter states that Qatar’s civil aviation authority is “unaware of any plans by Qatar Airways to start fifth freedom flights;” note that Qatar Airways doesn’t say they won’t, just that they don’t have any plans to as of now

That has completely been adhered to. Heck, even beyond what they agreed to, I think most would agree they’ve been reasonable. Qatar Airways has added virtually no service to the US (including not launching Las Vegas and San Francisco flights, both of which were in the cards), and they’ve added no fifth freedom flights.

Furthermore, plans for Air Italy were already known when that agreement was in place, and very few people are using the Air Italy flights to & from Europe as fifth freedom flights. Qatar Airways would have no reason to route people via Milan, since they can also add capacity themselves between Doha and the US, but choose not to.

Facts just aren’t convenient in this debate

Let me be clear — if an argument was to be made about how subsidized airlines shouldn’t be allowed to participate in the Open Skies agreement, then I think that would be fair enough. But that’s not what’s being done.

Instead three airlines are being targeted.

What about Saudia, which operates a similar business model, but which belongs to SkyTeam and works with Delta? What about Alitalia, which Delta has a transatlantic joint venture with (meaning they’re sharing profits) even though Alitalia has received a countless number of subsidies?

Bottom line

It sure sucks when facts get in the way of fantasy. Qatar isn’t in any way violating their Open Skies agreement, and there are zero concerns about US airlines being on the verge of collapse.

Let me once again emphasize that a debate can be had about the role of subsidies in an agreement based on free competition. However, that argument needs to go way beyond the “big three” Gulf carriers.

This post isn’t a defense of Qatar, but rather it’s intended to point out how silly it is that this has become a topic of bumper sticker patriotism.

(Tip of the hat to @erichert)

Comments
  1. Ben,

    Many of us vastly prefer u over sites like “the points guy” because u are straight to the point.

    Please don’t use clickbait titles.

  2. I completely agree. The US3 have no right to complain, especially considering the amounts of subsidies all major US businesses get. It’s just embarrassing that they keep coming back to this issue.

    There is one thing though – subsidized airlines are better for the consumer in the short-term because they offer lower prices and better service. This means that the discussion about airline subsidies should be even more complex than just ‘should they be allowed’.

  3. One can begin with “Tricky Dick Anderson” while at DL started this whole debate and of course Parker both airlines are heavily “subsidized” through tax incentives bear witness to the fuel storage deal Delta has. All this to mask the abysmal service, uneatable food and dirty planes they expect us to endure all in the name of “US Airlines” And then these two airlines buy more foreign made metal than US, having said that it sickens me what Boeing has done to our image internationally and now frankly don’t blame airlines from going away from Boeing, Maybe Boeing can have AB private label planes for them.

    Good work Lucky

  4. God, one can hope. Has someone reminded them Qatar also plays host to US SOCCENT FWD, helping America on military operations including the Iraq War?

  5. American Air is on the verge of collapse but that’s not due to Qatar or Air Italy, it’s due to the incompetence of Doug Parker and other executives. Been waiting for the board of directors to clean house. It’s long overdue.

  6. Trump is being briefed by the same guy who told him that British airports were overrun during the war of independence( as per the speech yesterday).

  7. Has it ever occurred to them that people are picking those airlines over the US3 simply because they are better on every comparable parameter?

  8. Ben, I appreciate you keeping this post as non polarized as possible. I think both Conservatives and Liberals should be against this idea. In my opinion this goes back to the three legacy carriers ( American in particular) knowing that they lag behind the competition in some aspects and wanting US government intervention just to help themselves out. It is funny how they can go from hating regulations to loving them overnight based on if it will help them or not.

  9. Townhall = National Enquire = The Sun = Bild. For most of us, these dont worth the paper it’s printed on unless of course if u r “healthy” overweight person stirring on couch watching soap operas all day

  10. Cannot argue any of the points. US airlines are doing well and better. I’m flying with US airlines, precisely with AA but through London since none of the US carriers fly to and from Dubai.

  11. Sir,

    Please stop with the political tie-in’s in your articles. It devalues your entire site and position as an authority within the airline world.

    You are simply better than this tripe.

  12. @ Mel:

    Congratulations for “Washington Compost”… A great line if there ever was one.

    May I suggest a slightly different graphic, as Washington ComPost, for a better visual?

    And if you have one in the same vein for the NYT, please give it to us. My “Pravda” pales in comparison and it’s not even fair to the Russian newspaper. I just saw that “MAD Magazine” is going out of business, maybe there’s an opportunity there.

  13. Anyone else think Debit should be able to comment on posts like this? I could use the entertainment, Lucky! 😀

  14. What Trump should do is to stop Qatar from hosting the World Cup. It is inhumane to force player run around in 120+ degree weather. In additional, the construction of their stadium was done by forced labor where migrants were forced to work after their passport were taken away.

  15. You’re right, US Airlines are doing quite well in the markets in which they can effectively compete, as is the rest of the airline industry. That said, I’d like to see some journalistic analysis showing how well the world’s airlines compete in those markets where they go up against state funded airlines like Qatar. And then take it a step further and look at ticket prices in markets where these state funded airlines have little or no competition from non-state funded entities. Everyone loves to complain about how unfair the ticket prices are in and out of America’s fortress hubs but aren’t using enough foresight to see these airlines are using state fubds to establish themselves as fortress airlines where they can set the price of flying at whatever levels best fills the coffers of the Princes and Kings who own them and other industries, like OPEC. America has spent over 3 decades countering that cartel… Are you sure you want to endorse and 30 years of doing the same in a different industry like commercial aviation?

  16. Your Oompa Loompa in Chief ain’t gonna do anything except make agreements to line his own pockets.

  17. State funding is an interesting term…

    Qatar injects money directly into its airline. Probably state funding?

    US Gov provides huge tax breaks to us airlines. State funding ?

  18. What is most comical about this situation is the US3 are so fixated on the ME3 but are completely cool with the Chinese carriers.

  19. Qatar/Iran/hezbollah vs USA/Israel/saudi/uae

    The reasons for this rift are complex and would be pretentious of me to explain in a blog reply.

    War is coming to the Middle East. Let’s make sure we know which side is fighting for us.

  20. Good for you Lucky. The US 3 are whimpering overweaning jackasses.
    They use government for all they can get.

  21. Trying to figure out what you actually expect Trump to do? Not sure any of his assets would be enriched by getting involved. You don’t think he would do something to benefit the public do you?

  22. For those who try to compare tax breaks in the US to state funding in other countries, the difference is, one starts with a bank balance of zero and suddenly has billions of dollars to spend, where the other works hard to earn their billions of dollars through profits on revenues and the government takes a smaller percentage. While both benefit there respective recipients, there’s a huge difference between the two.

  23. Bed, you are in love with Qatar money 🙂
    you always defend Qatar like its your own Country and we all know why.
    Money, money, money …

    BTW, Qatar against LGBT
    Against you Ben ..

    Don’t make the money change your mind..

  24. @Harry – Qatar hosts a big US military base. You need to work on your geo-political knowledge before you start predicting wars.

  25. Serious question. Why are US carriers so worried by Qatar Airways and the ME3 in general? Geographically, the US is far more protected against alleged aggressive pricing by the ME3 than say the legacy carriers in Europe, Asia, and Australia. The ME3 are not going to directly compete with the US legacies on European routes or most routes to East Asia.

    I imagine a huge part of the ME3 traffic out of the US is going to places like India, the Middle East, Africa, and maybe Thailand, but US carriers underserve these markets. I spend most of the year in South East Asia and getting to the US west or east coast is still far more convenient over the Pacific. A flight on Qatar to the US will add a good 4-5 hours to your journey if you are in big markets Hong Kong or Singapore. Are a lot of people taking eating the extra hours for a cheaper fare?

    Please help me understand what I am missing here?

  26. I would not suggest that the title was clickbait… But to describe how I felt/reacted as I read it, and as I waited for the page to load: mouth open, jaw hanging, mind racing with thoughts about how stupid such a claim is! (I guess that makes it clickbait…. Hahahaaa)…

    That said, and while Trump may be able to further solidify his support base if he were to choose to instigate this matter with Qatar’s Emir, I would offer that the same reason he will not touch this issue with a 40 foot pole, is the same identical reason why he refuses to go after Saudi Arabia’s MBS for killing Khashoggi.

    That reason is: $$$

    In fact, Trump’s visit to Qatar is, in and of itself, a complete contradiction of his unbridled support for the Saudis (think “Saudi + Egyptian + UAE Blockade of Qatar”) and a demonstration of what a hypocrite the man is…

    But hey…. A paycheck, is a paycheck no matter where it comes from or how much of some peoples’ principles they may compromise while seeking to get it.

  27. I will fly Qatar and Qantas every time from Australia much better than Emirates and Etihad . Best planes best service and best Airport lounges.
    Love Doha as it’s not as glitzy as Dubai.

    Hope the blockade continues !!!

  28. @Pierre. MAD Magazine is going out of business solely because the Trump Family has sucked all the oxygen out of that corner of comedy with their antics. Sad, as the Orangeman would say.

  29. I read the story with great interest to see how the Trump mention would play out. The fact that Trump was basically ignored in favor of the underlying story was refreshing. Very well done. The idea that the ME3 are threatening the survival of the US3 is, indeed, preposterous. I wish someone would threaten the US3. Especially the two with hubs at O’Hare.

  30. I believe Qatar Airways has pretty much killed all other airlines in Qatar, hmm..

    My home country & airport has two daily flights on QR. While they have occasionally good sales, they are not in general that cheap compared to the competition. Their route network may sometimes be of advantage, or level of service, easy transit through Doha. Same with Emirates.

    They are an option, nothing more.

  31. Qatar heavily subsidized no transparency in their financials. Dreadful treatment of their staff at times by management. QR can offer services to secondary cities and absorb losses as they know the Qatari government will bail them out. I just hope the Aussie government never gives in to their request for additional traffic rights. With QR it is not a level playing field.
    No loss if they leave OW, as an Aussie we have a great airline in QF and their partners EK etc all offer world class services. I am off to NBO next week QF codeshare operated by EK, always very happy.

  32. @Austline~ Your defense of QF is vastly overblown. As an international airline it is a shadow of what it once was, now having to rely on EK, with its ageing fleet, for European connections. Have you checked the loadings on QR ADL-DOH and beyond? Full all the time as QF doesn’t operate any international direct flights out of Adelaide. Important enough to put on a daily A350; no subsidy needed there!

  33. SMH. Overly entitled millennials on their self-righteous high-horse want to lecture the Internet. Y’all ain’t better than good old Donald.
    Shouldn’t you post a trip report instead? Barley see any here.

  34. Endre: “healthy overweight person stirring on couch watching soap operas all day” — are you referring to your own pathetic life?

  35. Typically American mindset: set the playing field to their own advantage and if one disagrees call him out. Then even though the playing field is set and they start losing, as the opponent is better, start whining about all being unfair and corrupt. Just a bunch of wimps with a big mouth really

  36. @VJ

    Harry is right and there is very high tension with Iran right now. Not sure how Qatar will be involved eventually. But there are rumors that predict a conflict. Not sure how many will be involved.

  37. As an Australian, I have to say the way the 3 big US airlines use bankruptcy laws and so called restructuring is hardly “being on a level playing field” either. Many nations don’t have the same generous corporate bankruptcy laws which allow Airlines for example to accumulate massive debts, declare bankruptcy, reorganise and return to formidable profits, all whilst others (suppliers, employees, pension funds) cover the costs. Isn’t that the same as state funding?

  38. @Dn10. Qatar has an open sky agreement with the US and so it can. Qatar doesn’t have one with Australia. Unlike Emirates and Etihad, it can only operate 28 flights per week to major Australian cities: Brisbane, Sydney, Melbourne, Adelaide and Perth. That’s why it flies to Canberra via Sydney so it can service Sydney as well. It cannot add any more flights but Etihad and Emirates can! Once again, QF doesn’t receive subsidies to fly internationally but some to fly to remote places in Australia but to me its treatment of QR is not very fair.

  39. I really don’t care if the so-called legacy carriers do go under. All they care about is their ratings on Wall Street. After 9/11/01 they whined that they needed to charge fees for checked bags so that passengers wouldn’t check so many bags in order to reduce weight and save fuel. So what are they doing? They’re cramming more seats into their planes and making restrooms smaller so they can squeeze more seats in a plane. What happened to needing to reduce weight by reducing the amount of bags passengers checked in order to save fuel? It’s a joke and there’s nobody to regulate the airlines to curtail this rip-off.

  40. Currently I live in Doha, so there is probably a lot of things that I can say here in reference to Qatar Airways:

    1) I believe Qatar Airways has pretty much killed all other airlines in Qatar, hmm..
    A. Qatar Airways did not come up until 1993 and also was a part of Gulf Air (owned by Bahrain) until 2003.

    2) Qatar heavily subsidized no transparency in their financials. Dreadful treatment of their staff at times by management. QR can offer services to secondary cities and absorb losses as they know the Qatari government will bail them out. I just hope the Aussie government never gives in to their request for additional traffic rights. With QR it is not a level playing field.
    No loss if they leave OW, as an Aussie we have a great airline in QF and their partners EK etc all offer world class services. I am off to NBO next week QF codeshare operated by EK, always very happy.
    A1: Ok.
    A2: For an American living in Qatar, it has been a god send that they are in One World considering I can book a ticket at a reasonable price out of Doha to get out for vacation. If they leave, than literally for Americans the number of options drop to what, British Airways to London and what else. For certain Americans living and working over here they are restricted by corporate policy to what they can fly to get back Stateside.

    3) My home country & airport has two daily flights on QR. While they have occasionally good sales, they are not in general that cheap compared to the competition. Their route network may sometimes be of advantage, or level of service, easy transit through Doha. Same with Emirates.
    A: Well, that is true. That is why admittedly I use American Airlines and just have one Qatar leg. But with the Gulf Blockade still ongoing, personally my options are limited.

    4) I will fly Qatar and Qantas every time from Australia much better than Emirates and Etihad . Best planes best service and best Airport lounges.
    Love Doha as it’s not as glitzy as Dubai.

    Hope the blockade continues !!!
    A: @Tim, good point. Doha is not as glitzy and you can find great stuff to do here in the country. But living here as an expat, I do wish the blockade would end. It does suck that we have to take long routings to get anywhere within the Gulf and on top have to pay $600-$700 roundtrip for what used to cost $100 (Bahrain/Dubai/Abu Dhabi). A lot of residents here used to do that as they do in other Gulf countries, but once the blockade started, most of them just wait till they get holiday (which is in the summer months for a majority of people) and take one massive vacation.

    5) What Trump should do is to stop Qatar from hosting the World Cup. It is inhumane to force player run around in 120+ degree weather. In additional, the construction of their stadium was done by forced labor where migrants were forced to work after their passport were taken away.
    A: FIFA is the organizational body that controls the World Cup. For 2022, FIFA made a concession to Qatar to host the world cup in November and December where the weather here in Doha can be as hot as 90 degrees. Granted it will be humid because of how close it is to the Gulf. In the second part of your portion, the UN did tell Qatar for them to stop. By Qatari law, the passport holding is illegal here in Qatar, and they are working to try and get better conditions here for all workers. All workers also must have a bank account so that payments are audited by the Qatari govt and by the UN Human Watch Organization.

    6) God, one can hope. Has someone reminded them Qatar also plays host to US SOCCENT FWD, helping America on military operations including the Iraq War?
    A: @ Ray Not just that, but AFCENT and CENTCOM FWD are located here plus a big massive base of about 15,000 airmen and contractors here.

    Also, here in the country, if you know someone that works on the staff for Qatar Airways, they have a very great program for family and friends where they have a massive discount for I think up to 5 people and then you can put nearly 50 people (I think) on a standby flight program where it is very cheap. A few of my co-workers use this to get a non stop flight back to the states. I have known a few expat pilots, flight attendants and some of the corporate staff here. Some of the most respected residents of the country work for the airline here.

    Also a tip for any of those that want to take Qatar Airways and get a reasonable business class fare. It has been roughly $2K more expensive to fly out of Doha than it is to fly out of Kuwait and/or Muscat (or even Colombo, Sri Lanka). You will get more competitive fares. Just for us here in Doha, it means we are taking a hop to Kuwait or to Oman and stay for a couple of hours and then just go backwards.

    If there are any other questions of Qatar, I am willing to answer.

    (Sorry for not posting the names of comments in where I answered)

  41. Why not eliminating the open-sky agreement?
    Simple and easy!!!
    Then we don’t need to argue about this BS anymore.
    Now it is ME3 begging us, not vice versa!!!

  42. SOE shouldn’t be called a company. You might like to fly them (I do too) but you definitely won’t want to invest in them (at least airlines SOE, many SOE from singapore and china are thriving).
    If you do, go ahead and invest in struggling ME3…

  43. Staggered anyone is indicating Qantas is a world class airline. It’s simple; they’re not – the service is poor, the food mediocre, the biz seat simply not comparable to pretty much all other airlines and so on

    Qatar has a great biz product… And for anyone on US East Coast, other than on SIA out of NYC, Qatar is basically the easiest and quickest way to get to Asian destinations like Phnom Penh, Ho Chi Minh etc. given the east coast cities they serve.

    The US domestic market is an oligopoly and to/from Europe pretty much the same. Just look at prices for any US destination domestically served only by a traditional carrier. Look at how transatlantic prices are nuts from majority of US cities (other than NYC, Miami, Chicago, LA, Dallas) to destinations like Paris, Amsterdam, Rome due to the Skyteam monopoly; often you can fly Delta Biz to Delhi thru Paris or Amsterdam cheaper than if you fly to Europe alone!

    Bottom line – there’s nowhere near enough competition in multiple instances; agreements with ME3 are sufficient to ensure transparency; and US3 are and will continue to make huge profits.

  44. Go Lucky! It’s good to state the truth once in a while, just so people don’t forget it exists.

    This whole gaslighting of America thing is so exhausting. You can’t get anyways good if you can’t even agree on basic facts

  45. By any reasonable definition of clickbait, this was clickbait. The headline is the opposite of the thesis of the article designed to attract clicks on the basis that most people would be shocked to see Lucky espousing such a position.

    That it has to do with politics has no bearing on the issue. He might as well have written “Ten Reasons American Is The Best Airline In The World” with a cheeky list of sarcastic items. That would be clickbait. This is clickbait.

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