Delta is told to release study on airline subsidies

US-UAE Business Council President issued a counter response to a recent letter written by Senior VP of Delta, Ms. Andrea Newman.

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Published: Sat 28 Feb 2015, 1:38 AM

Last updated: Thu 25 Jun 2015, 9:45 PM

Dear Ms. Newman,

Thank you for your prompt response to my February 18 letter. We welcome an informed and responsible discussion on the benefits of Open Skies. Richard Anderson’s comments linking 9/11 to Open Skies certainly fell well below that measure. Delta’s CEO never publicly apologised and your company’s indifferent apology did little to acquit either Delta or its CEO.

Furthermore, we strongly disagree with your assessment about the allocation of benefits under Open Skies. Open Skies did exactly what was promised — spurring rapid growth in bilateral airline services, generating huge sales of U.S. commercial aircraft, and stimulating the overall trade relationship.

While US airlines were distracted by mergers and bankruptcies or focused on expanding their own Asia routes or locking in antitrust immunity with their European partners, UAE airlines expanded rapidly. They saw an opportunity to connect the US and Europe via ideally located Dubai and Abu Dhabi hubs to rapidly growing markets in Asia, Africa, and the Middle East.

These new services have brought tens of millions of additional travelers into the global and US aviation networks.

For example, in a letter to DOT Secretary Anthony Foxx, JetBlue Airways noted that new Emirates Airlines service between Dubai and Boston allowed the airline to “successfully launch new domestic service between Boston and Detroit,” increasing passenger traffic between those two cities by nearly 70 per cent (and lowering fares on a route previously monopolised by Delta by 33 per cent).

These compelling and irrefutable benefits may be the reason that virtually every single stakeholder in US commercial aviation has lined up against Delta in its efforts to restrict Open Skies. This includes US airports, travel and hospitality companies, business travelers, and cargo airlines.

The positive impact of Open Skies on the US-UAE relationship is clear and was documented in a 2013 study commissioned by the US-UAE Business Council:

• More than $16 billion in benefits to the US (direct and indirect spending), more than 100,000 jobs, and over $1.6 billion in tax revenue.

• Aircraft orders that total $37 billion (at list prices) and over time will support more than 200,000 high-paying U.S. manufacturing jobs (with aircraft exports to the U.A.E. sustaining over 30,000 US jobs).

• Nearly $6 billion in economic activity generated as a result of increased inbound tourism to the U.S.

• Over 2,000 airport jobs at U.S. gateways.

This report was released publicly and is available for review on the Business Council website. Delta still has not publicly released its “study”, effectively preventing any fair and independent analysis.

In any event, Delta should see what other US companies already have — that the UAE is a major success story for US business. The UAE is the largest export market for US goods and services in the region, generating a US trade surplus of more than $20 billion in 2013 alone.

There clearly is a lot at stake in the US-UAE commercial relationship. On behalf of our members in both countries, the Business Council will continue to promote and protect free trade and open markets between the US and the UAE.

Danny E. Sebright , President

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