Hoffa: When ‘Open Skies’ Means Unfair Advantage

By Teamsters General President James P. Hoffa
Published in the Detroit News, April 15, 2015

Unfair labor practices are once again hurting U.S. workers and threatening jobs here in Michigan and across America. This time, the threat is coming from overseas, as three airlines from the Middle East — Qatar Airways, Etihad Airways and Emirates — are embracing shady financial practices and anti-worker policies to undercut U.S. companies.

These Persian Gulf region air carriers are distorting the market with unfair advantages, and hoping no one notices. U.S. airlines are accountable to their shareholders and operate as private businesses. They respond to pressures in the marketplace and must negotiate contracts with their unionized employees.

In contrast, Qatar Airways, Etihad Airways and Emirates are run as extensions of the countries they serve. In direct violation of the international Open Skies agreement, recent evidence shows the governments of Qatar and the United Arab Emirates (UAE) are pumping billions of dollars into these companies through subsidies, supportive public policies and state-funded construction. These billions provide the airlines with an enormous benefit that upends the international aviation market and undermines global competition standards.

A recent report shows that these subsidies and unfair benefits have totaled $42 billion over the last decade alone. With that much government cash, no wonder these airlines are expanding! With no pressure to earn profits, provide a living wage or control costs, these state-funded enterprises jeopardize American businesses, threatening jobs and consumer choice in the process.

It’s as if a foreign government were manufacturing cars on the cheap in its own country and then selling them by the thousands in U.S. cities at below-market rates. That’s not competition — it’s a tactic straight out of the old monopolist playbook. It’s also one the U.S. government has rejected for decades.

To make it worse, these airlines operate with minimal oversight. In stark contrast to the U.S., airline regulators in Qatar and the UAE are anything but independent. The chairman of Emirates, for example, also serves as the president of the Dubai Civil Aviation Authority, Dubai’s equivalent of the FAA. He is also a director of the UAE’s General Civil Aviation Authority. This would be an absurd conflict of interest anywhere else, but for big companies in these countries, it’s just how they do business.

The Gulf airlines tilt the playing field through other, more sinister policies enforced by their governments. Both Qatar and the UAE outlaw labor unions and offer almost no protection for their workers. The abysmal treatment of workers in Qatar has already drawn widespread condemnation in the lead up to the World Cup, for example, and rightfully so. Conditions for workers in these countries are so poor that their jobs are often compared to indentured servitude. Workers are suffering in Qatar and the UAE, but the airlines save billions as a result.

Access to our skies must be equitable. Like any international accord, these agreements must be enforced. The Teamsters urge U.S. negotiators to revisit the Open Skies protocols with the countries that are receiving governmental support to ensure fairness. American workers can compete with anyone in the world when the playing field is level, but everyone has to play by the same rules.