Sometimes it is what is not said in the summaries and followups that is the most telling about some conversations. This is especially true of the July 10, 2019 meeting between President Trump, the big three US based airlines ….American, Delta and United Airlines.… and the Qatar airlines. The reports of the meeting show complaints regarding government funding of the Qatar airlines as being unfair competition, and its 49% purchase of the Air Italia as a breach of the US-Qatar ‘Open Skies’ agreement on civil aviation. President Trump’s response was to tell the US airlines to use the normal procedures for complaints; he will not intervene. Now why would he do this when he is normally a pro US industry, US employer president with an America First agenda?
The truth is President Trump focused on the issues of the jobs and economic activity and the Qatar government supports our airplane manufacturing industry through buying our planes and serving our shipping business.
What was not said in the room is this: the big three airlines of which American Airlines is the largest, have had record profits in the last 5 years and skyrocketing ticket prices to go with it. They are hardly hurting. At the end of 2015, American Airlines Group had an operating profit of 15.14% with higher net profits and record gross profits. Delta scored even higher.
While there is some evidence of badly needed investment in new planes and infrastructure, there is the issue of what is reasonable. It is clear that the ticket prices are not in that category. The president, in not taking sides in that problem, tells the big three airlines that Competition will decide this issue of what is fair.
I would add one more offering to this dilemma regarding government sponsored airlines. There is no way the American people win LONG TERM in competition with government subsidized industries when our airlines are not subsidized. In that respect, the big three airlines are right to be concerned, record profits not withstanding, although it is a bit disconcerting to have an industry complain about unfair competition when they are riding a huge profit wave. My personal preference as an independent voter in settling these conflicting interests is to focus on the ‘America First’ and do the following:
For ONLY GOVERNMENT SUBSIDIZED airlines, establish a tariff that is able to be reduced by the percentage of US manufactured planes in their fleet and the percentage of US employees in their staff.
I believe President Trump can do this by Executive Order, and should tactfully do so with the request for Congress to send him legislation to sign. In the meantime, his Executive Order will be in effect. While this tariff is likely to become a part of the ticket price, it is not something that is directly associated with that metric and in theory, is not consistent enough to be easily forecast. The tariff is fair in that it balances the subsidies of foreign airlines by creating a direct pass through of that subsidy to our airline industry by either a tariff, jobs, airplane, or other American airline industry orders…. a ’subsidy,’ if you will, of their choosing and at a level they find acceptable. This tariff on government subsidized airlines will essentially double down on his original focus and thought process: American jobs and the American economy.
Perspective is everythingwhen you are experiencing the challenges of life.
Joni Eareckson Tada
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