WASHINGTON (AP) — U.S. airlines have ramped up an aggressive lobbying campaign that seeks nothing less than converting the government from industry regulator to business ally.
Delta, American and United are pressing the Obama administration to protect them from what they say is unfair competition from foreign airlines able to sell cheaper tickets because of government subsidies or lower wages for workers.
U.S. carriers are also trying to roll back or forestall consumer protection rules, including a requirement that airlines show ticket-buyers the full cost of their fares, including taxes and fees, instead of burying the information in fine print.
They are getting results.
At the urging of the big three and the Air Line Pilots Association, 262 House members and 22 senators have written the administration for a freeze in the number of flights to the U.S. by Persian Gulf airlines Emirates, Etihad and Qatar and an opening of discussions with the United Arab Emirates and Qatar about whether those carriers are violating aviation treaties with the U.S.
Such “open skies” agreements, a hallmark of U.S. policy for two decades, permit U.S. airlines broad access to aviation markets in more than 100 countries in exchange for similar access to the U.S. market for those countries’ airlines.
PHOTOS: Big 3 airlines flexing their political muscle in Washington
The U.S airlines say the Gulf carriers have received $40 billion in government subsidies since 2004, allowing them to charge lower fares and gain market share. But consumer advocates say the U.S. carriers, having carved up about 80 percent of the lucrative trans-Atlantic market through joint ventures and alliances with overseas carriers, and are now trying to ward off competitors that offer a cheaper alternative.
The big three and their pilot unions have blocked an application by Norwegian Air International, a subsidiary of Norwegian Air Shuttle and the third largest low-cost carrier in Europe, to fly to the U.S. from Europe and Asia. They say the subsidiary’s business model will drive down wages and undermine safety, which Norwegian denies.
Delta Air Lines, which carried more passengers last year than any airline in the world, has been campaigning to block the U.S. Export-Import Bank from helping foreign competitors such as Air India and the Gulf carriers finance the purchase of planes from Boeing. Delta says the planes are used to compete on routes Delta also flies. Boeing is the nation’s largest exporter in dollar terms.
Calling the bank “corporate welfare,” tea party conservatives in the House have prevented Congress from renewing the bank’s lending authority, which lapsed on July 1.
U.S. airlines are not united on these issues. Delta is alone in its opposition to the bank, and some airlines like JetBlue oppose the big three’s position on the Gulf carriers. JetBlue transports passengers arriving in the U.S. on those carriers to other cities.
What does unite the airlines and their trade association, Airlines for America, is opposition to consumer protection rules issued or proposed by the Transportation Department. Several airlines took their case to the Supreme Court in an effort to block a regulation that requires airlines to display ticket prices that include taxes and fees. After they lost, they were able to persuade the House to twice pass a bill to roll back the rule. The measure has stalled in the Senate.
Airlines also oppose a proposed requirement that ticket sellers inform consumers of the cost of a first and second checked bag, an advance seat assignment and a carry-on bag on the first computer search screen where airfares are displayed, rather than waiting until a buyer has selected a fare and is checking out. That way, the department reasons, consumers will know the full cost of the trip from the beginning and won’t be surprised later by fees, which can vary widely.
In general, airlines say it’s in their interest to keep passengers happy, so consumer regulations are unnecessary.
Airlines also are fighting airports over whether to raise from $4.50 to $8.50 the “passenger facility charge” included in tickets. The fee hasn’t increased in 15 years. It generates money primarily used for additional airport runways and gates.
Airlines say the $4-increase per segment will reduce ticket sales. But airports and industry observers say the real issue is about who controls access to airports. Airports want to use the money to enlarge terminals and add gates in order to attract more airlines. But airlines already there have an interest in keeping out competitors. Because of mergers, one or two carriers control a majority of the market at most airports.
At the same time, airlines are under pressure from the Obama administration.
The Justice Department is investigating whether Delta, United, American and Southwest have colluded to limit available seats and keep fares high. United’s chairman and CEO, Jeff Smisek, stepped down on Sept. 8 amid a probe into the airline’s dealings with the agency that operates New York-area airports. The Transportation Department is investigating whether airlines engaged in price gouging in the Northeast after a deadly Amtrak crash in Philadelphia in May left passengers scrambling for travel alternatives.
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