When President Trump meets with the top CEOs in the US aviation industry on Thursday, one issue will surely be a divisive force in the room: what to do about Emirates, Etihad, and Qatar Airways.
Over the past 15 years, the trio of cash-rich Middle Eastern carriers or ME3 have barnstormed their way to the forefront of the global airline market.
Most recently, their expansion has brought them into direct competition with the US trio of American, Delta, and United Airlines.
The three US legacy carriers or US3 allege that the ME3’s growth has been artificially enhanced by more than $50 billion in unfair government subsidies and their continued growth in America puts US aviation jobs at risk.
According to the Partnership for Fair and Open Skies — an organisation tasked with speaking on behalf of the US3 on the matter — the ME3 is in violation of the Open Skies agreements that govern air travel between the US and various countries around the world. As a result, the US3 will likely petition the Trump administration to renegotiate these treaties.
In January, Emirates announced a new route between Newark, New Jersey and Athens, Greece. The response from the US3 was swift and furious.
“By flagrantly violating its Open Skies agreement with the United States at the start of the Trump administration, Emirates is throwing down the gauntlet,” Partnership for Open and Fair Skies chief spokesperson, Jill Zuckman, said in a statement. “We look forward to working with President Trump and his team to enforce these agreements and protect American jobs — something that the Obama administration failed to do.”
Foreign passengers, domestic business
However, there’s another group of US companies in this debate and it is siding with the Middle Eastern carriers. This coalition — called US Airlines for Open Skies (USAOS) — features JetBlue, Hawaiian as well as cargo carriers Atlas and FedEx.
“United Airlines, Delta Air Lines, and American Airlines do not speak for all US airlines,” the group writes on its website. “This is not US Airlines vs. Gulf Airlines, this is a small group of big US airlines seeking to restrict competition, against the interests of other US airlines, the US travel and tourism industry and US consumers.”
The USAOS believes that meddling on the part of the US government in relations to the Open Skies agreements with Qatar and the United Arab Emirates, will put similar agreements with numerous other nations in jeopardy — possibly restricting future access into the foreign markets for US carriers.
“Foreign airlines bring thousands of passengers to the United States, creating demand for connecting flights for smaller U.S. airlines,” the USAOS’s website states.
Since foreign airlines are prohibited from flying between points within the US, smaller domestic airlines such as JetBlue, Hawaiian, and Alaska Air benefit greatly from the connecting passengers carried to the US airports by the ME3’s wide-body jumbo jets. As a result, the group argues, a slowdown of international traffic into the US
On February 7, in a joint letter to Secretary of State Rex Tillerson, the CEO’s of JetBlue, FedEx, Hawaiian, and Atlas Air wrote that “regrettably, three large legacy U.S. airlines — Delta, United, and American — are making demands that would jeopardize Open Skies and reduce competition in an already overly concentrated U.S. airline market.”
A similar letter was also dispatched on the same day to Transportation Secretary Elaine Chao.
NOW WATCH: The reason millennials became obsessed with payment app Venmo has nothing to do with money
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.