Impossible to Parody. The CEOs of United, Delta, and American are meeting with President Trump this afternoon to promote protectionism and argue that the U.S. should abrogate its treaty obligations with the U.A.E. and Qatar because those smaller airlines receive subsidies from their home countries — an argument the carriers have spent the past four years making without credibility or success.
Heads of airlines to raise with @POTUS concerns about the Open Skies Agreement and subsidies by #Qatar and #UAE, reports @Reuters.
— Steve Herman (@W7VOA) July 18, 2019
They’ve been negging the President over Qatar Airways’ support for Air Italy, claiming that while they weren’t able to convince anyone with a straight face that subsidies are a violation of Open Skies treaties (they aren’t, and U.S. airlines are subsidized too) that Qatar made a promise they didn’t have to make in order to make the gripes go away — that they weren’t planning flights between Europe and the U.S. — and broke it by supporting Italian carrier Air Italy, a plan that was well known by everyone at the time of agreement.
It seemed as though the US airlines, having reportedly spent $50 million lobbying without success, had finally let the issue of Qatar, Emirates, and Etihad drop. Instead they had been focused on the Air Italy issue despite Europe warning of a trade war if the U.S. acted against European carrier Air Italy in violation of the U.S.-Europe Open Skies treaty.
However last week Doug Parker, Ed Bastian, and Oscar Munoz all signed their name to an egregiously misleading op-ed in USA Today where they brought back the attack line not just against Air Italy but against Etihad, Emirates, and Qatar again as well without anything new to offer (other than perhaps encouragement from Trump trade svengali Peter Navarro).
So who knows what the U.S. government will be willing to do, picking the pockets of U.S. consumers in the form of higher prices (Delta’s admitted goal) and less choice, redistributing money from passengers to airline shareholders despite the most dubious of arguments.
Oh Lordy….. here come the ignorant, bigoted, racist, low IQ dumbFs racing to their bloated incredibly stupid orange monkey-president’s defense.
Careful Gary, if you criticize America or it’s leader then it means you hate America and the mob will mobilize to send you back. Criticism of America and the President was patriotic up until January 2017, it’s treasonous now, try to keep up.
Apparently the CEO’s aren’t making enough $$$$$$$$$$$$$$ for themselves????
Wrong – airfares have been going up – mileage awards – if you can find them have higher mileage caps to use them – and service – HAHA non existent
@ Another Steve — Clearly Gary Hates America. I am printing the t-shirts now.
I’m sure they’re all staying at the Trump International DC hotel for as many nights required to get their quid pro quo.
@Another Steve – Trump only tells people of color (and only women, it seems) to go back to where they came from, even if born here in the U.S. White men are totally safe.
Forgot to mention – White men are safe, unless they are journalists or Jewish, in which case Kellyanne Conway wants to know more about your ethnic origin.
What’s next, they convince Trump that the ME3 are violating The Monroe Doctrine? Sheesh.
I could see Trump doing something with Qatar, but Emirates/Etihad seems pretty unlikely due to the administration’s fealty to the Israel/Saudi/UAE alliance, no?
trump being a savvy & better businessman will see thru the smokescreen they put up in 5 min.
Gary said: “Trump trade svengali Peter Navarro”. You do realize that Trump has been making the same comments about trade for 20+ years. Common Guy.
Gary said: “European Union Warns that Delta, American and United are About to Start a Trade War” Yea, of course, if some bureaucrat tells the USA not to do it, like 7 of 9 Borg Woman (played by Jeri Ryan), we should comply. Who the Europeans are going to call if they go to war to protect them. Sure, the Ghostbusters.
To all the anti-Americans above, go back to the countries you came from. Wait, you came from USA. Darn. On an unrelated topic. I live in New York. Do a bug bomb, the cockroaches deport themselves to the next apartment, then they come back again. Cannot get rid of the creepy crawly fellows.
@02nz. Trump is wildly popular in Israel. He is the most pro-Jewish President in recent history. The Democratic party and most college campuses are trending rapidly in an anti-Semitic direction. To be honest, it is shocking to me.
@Other Just Saying – You are confusing being anti-Israel with being anti-Semitic. It’s not the same.
@Other Just Saying – Just because Herr Drumpf has a Jewish son-in-law, Jewish converted daughter and supports Netanyahu (along with every other despot he’s ever met) does NOT mean he actually supports Jewish people. Do you honestly think anyone shouting “Send Her Back!!!” at his rallies sees Jews any differently than minorities, LGTBQ, immigrants, Muslims, etc.? The fact that Israel is one of the only countries in the world to have a favorable opinion of Drumpf is for one reason alone: quid pro quo. As long as Drumpf keeps supporting Netanyahu’s initiatives to increase development in the West Bank, relocate the US embassy to Jerusalem, and continually thwart any Israeli-Palestinian peace process, he’ll remain popular there. Remember the Pittsburgh and Poway synagogue (or Christchurch mosque) shootings orchestrated by Jew-hating democrat college professors/students? Oh that’s right, they were by white nationalists motivated by the hateful rhetoric coming from the self-professed nationalist president. Those silly tiki-torch waving progressive snowflakes and their “Jews will not replace us” chants (wait, MAGA fans again)? Anyone that thinks Drumpf or the majority of his followers are not patently anti-semitic is either grossly ignorant, or a bold-faced liar (or likely both). Reminds me of someone…
I do believe that the Democratic party has taken a hard turn toward antisemitism and anti-Israel. People that support Israel and Jewish issues should reconsider their support for Democratic candidates.
BTW: The Trump administration has launched a global campaign to end criminalization of homosexuality. Google it.
@Other Just Saying – Yes, Trump has been ignorant on trade for decades. There are some things he gets, trade isn’t one of them. However my point is literal that Navarro has weighed in in favor of the big US airlines and has been pushing this, it wasn’t going anywhere before that, and when there were counterweights to Navarro in the administration it wasn’t going anywhere either. Trump’s general vision of trade alone doesn’t tell him how to handle the implications vis-a-vis treaties, the EU, and competing interests of Delta/American/United on the one hand and smaller US airlines + Fedex on the other.
They started all the nonsense with code shares- then they get afraid their greed will be less and blame it on subsidy’s. The airline employees subsidize their ridiculously high stock options and bonus and salary. Such Hippocrates
@Gary: I am surprised you answered me. I will give you what I consider to be a serious answer.
I did not like the word “svengali”. Saul Alinsky said: “Pick the target, freeze it, personalize it, and polarize it.” One of my ex-girlfriends went on a rant about Navarro about two years ago. She does not know anything about economics nor about Navarro. The mainstream media is going after him. Trump chose Navarro, because Navarro agrees with him, not the other way around. Trump is very much his own man. When he makes a decision, blame him, and not Navarro. Further, if you read negative stories about Navarro in the press, that means that someone leaked the story, probably to gain political advantage. They don’t call it the swamp for nothing.
“Trump has been ignorant on trade for decades”. Perhaps. During the campaign, Trump did not have a team of policy adviser to give him a 1 million (slight exaggeration) point plan like Romney did. Also, he did not speak in platitudes from a teleprompter like Obama. Also, Trump go on about how the force of their moderation would solve all problems like John Kasich or John Hickenlooper. Trump would just say what he thought. Many of Trump’s comments struck me as anachronistic, some wrong. Also, I belong to the economic religion of free trade and comparative advantage which meant I did not entirely agree with his approach. However, it is easy for my economics professors to ramble on about the purity of free trade. But this is the real world. It would be naive to believe that actual pure free trade exists between different countries. The regulations, taxes, tariffs and so on between countries does not lend to pure free trade. Right now Trump is trying to use tariffs as a cudgel to get better “free” trade agreements. Some of his comments about being tariff man and winning trade wars are tactical in my opinion. I think the jury is out on whether he succeeds. For one thing, unless he turns the House back to Republican, I think his trade deals will be blocked in the House. Secondly, who knows whether or not his trade deals, if approved might even be worse than we have currently. Time will tell.
Sheese. Too many typos. Stupid.
The ME3 get much more out of us than we get from them in open skies treaties. They are the Cayman islands of air travel, leaching off other countries economically by manipulating intl treaties and trade laws. If they were just flying passengers back and forth between the USA and their home countries then the open skies treaties would be fair, but they have instead created a worldwide transit center. Since they get more out of the treaties, then it makes perfect sense to renegotiate them.
Air Italy on the other hand is just an egregious sneaky workaround for them further take advantage of other countries’ goodwill, but probably not much can be done about it.
I think the day Trump is out of office should be a national holiday, so you know where I am coming from. But I think we could focus more on the CEOs and their role. They do not even try to compete with the ME3 on product or service, much less on route networks where most ME3 passengers want to go. They have actively and intentionally degraded their own products. So they want the government to protect their inferior companies, no matter what the law says. I think the new government should launch an antitrust investigation in 2021.
@Other Just Saying – “pure free trade” isn’t necessary, and hasn’t ever existed, more trade has benefited people and less is harmful in fact it was one of the proximate causes of the Great Depression (the other was monetary).
Trade deficits tend to be inversely correlated with economic growth in the US, when the economy is healthy consumers buy more stuff. Growth is what’s important for well being. When you buy something at the grocery store you get stuff and they get money, you have a trade deficit with the grocery store but that’s not something you worry about. US unemployment is at uniquely low levels, so where exactly is the supposed harm here?
Other than your bizarro fervent support of these economically irrational Middle East carriers, it’s hard for me to understand why you would oppose Trump sitting down the US airline CEOs with Qatar’s CEO to try to work out this trade problem. Seems like a good idea to me, no? Or are you afraid that these negotiations could impact your ability to fly in first class on subsidized ME3 flights?
@chopsticks – there isn’t a trade problem, it’s completely ginned up, the US airlines shouldn’t be trying to use the government to pick consumers profits – limiting choice (Air Italy is the only non-stop LAX-MXP and SFO-MXP) and raising price. It’s ironic that the US airlines are crying subsidy as a justification for government protectionism.
The real concern here is lack of a profit motive, not necessarily pure subsidies – you can define a subsidy as a cash infusion, loan forgiveness, cheap fuel, cheap labor, taxpayer funded infrastructure, the bankruptcy code, etc. Some of these are structural and some of them are very specific and targeted – i.e. airport infrastructure is specific, the bankruptcy code is structural in that it benefits anyone incorporated in the US.
That lack of profit motive make it exceedingly difficult to compete on product and service – unless you think that a major US airline should start losing money again by investing more in a product than they can charge for it. It’s just the opposite side of the coin of what the Chinese carriers are doing – they’re state backed, but have chosen the public good side of the equation, fly as many seats as you can and fill the planes so that Chinese passengers can travel where they please affordably – just because the ME3 have chosen to go upscale in the endeavor doesn’t make it any different. The difference is that there is a limit on the amount of flying Chinese carriers can do into the US and no such constraint on the ME3 side.
You can make a public good argument here – fares are lowered by the capacity, therefore it’s a good thing – but to make the argument that the US airlines and the ME3 are playing on a level playing field is pretty spurious.
@Gary. Thank you for a serious response.
I have several comments:
(1) “in fact it was one of the proximate causes of the Great Depression”. This is an economic straw horse type of argument. Right now, the Trump administration is trying to renegotiate the rules of the road in the trading relationship between USA and China. To motivate the Chinese to negotiate, Trump increases tariffs. It is really the only tool Trump has. The economist might wax eloquent about the tariff war that was one of the causes of the 1930s worldwide great depression. The economist wins the argument. However, at the end of the day, the rules of the trading relationship between USA and China still need to be renegotiated.
(2) “more trade has benefited people and less is harmful” Not sure if I would make it so axiomatic. Nevertheless, I agree that more trade is usually good.
(3) “Trade deficits tend to be inversely correlated with economic growth in the US”. I am skeptical of most “correlation” arguments. Correlations only mean something if there is an underlying cause/effect relationship. In real world data, it is difficult to accurately establish cause/effect relationships. Further, as a former quant, with data mining I can almost always find a correlation which supports my preconceptions.
(3) Following up on your simple example, if I increased my Sapphire Reserve card balance to pay for the grocery store food, it would not be sustainable in the long runs. Also if I quit my day job (ie hollowed out my manufacturing base) to live on my Reserve card, there would be definitely be “harm”. Of course, your simple explanation and my simplistic response are both facile. The impact of trade deficits/surpluses are complicated.
Someone earlier mentioned The Monroe Doctrine.
I’ll bet my life savings El pResidente has no clue what it is.
@Other Than Saying — Bravo!
Great reporting as always Gary. LOL. According to Lucky, Qatar CEO Al Baker was there along with other anti-US3 CEOs from jetBlue and FedEx. The best part was the DL CEO Bastien (aka hypocrite in chief) chickened out and no showed.
@Jose – I wrote yesterday before the meeting based on reporting of what the white house was saying would happen, lucky wrote today based on information after the fact, two separate things
https://www.cnbc.com/2019/07/19/trump-hosts-us-airline-executives-and-qatari-rival-amid-tensions-over-middle-east-subsidies.html
Sounds like the U.S. carriers didnt get what they want. And DL’s CEO bailed on the meeting, but QR’s CEO was there:
“The real story,” said a senior White House official, “is that Delta refused the invite. That didn’t help their cause.” The airline’s absence stuck with Trump who brought it up several times during the Oval Office session, according to a person familiar with the meeting.
At one point, Qatar Airways CEO Al Baker underscored the president’s point about Delta, noting that he had been willing to fly all the way from Qatar for the meeting, said the person familiar with the meeting.