Global Airlines- Is it a fair playing ground?

     The open skies agreement is exactly as the same makes it seem. "Open Skies agreements do this by eliminating government interference in the commercial decisions of air carriers about routes, capacity, and pricing, freeing carriers to provide more affordable, convenient, and efficient air service for consumers." ( US Department of State, N.d.)  There are hundreds of companies across the world that are a part of this agreement. One of the downsides to this act is that some foreign carriers receive government subsidies. Two major carriers that receive these bonuses are Emirates and Qatar airways.

      It seems to be a split controversy, but U.S. carriers were, and still are being subsidized. "The very first large aircraft order by American Airlines was subsidized by the Reconstruction Financial Corporation. It was hardly a coincidence that future Democratic administration Secretary of Commerce C.R. Smith, then chairman of American Airlines, was best man in FDR’s son’s wedding.Delta Airlines and United both have their substantial Tokyo operations as a result of the spoils of World War II.In recent times airlines received big fuel tax breaks, and Delta has an oil refinery in Pennsylvania that received nine-figure tax breaks." (Leff, 2015) Although some airlines in the Middle East region are receiving money from their governments, US air carriers are getting many benefits that help save them money. These benefits help keep US carriers in competition with the higher end airlines from around the world.

     Another major issue rising from the Open Skies Agreement. This complaint is that foreign carriers are buying aircraft below the market interest rates. This is essentially an incentive for foreign carriers to buy american. "Those are low interest rate loans that entice foreign businesses only to buy Made in U.S.A. manufacturing. The U.S. government sees those loan programs as a way to subsidies foreign buyers of high paying U.S. jobs." (Rapoza, 2015) There shouldn't be an incentive for US air carriers to buy from their own country. In order to keep money flowing around our economy, we should invest in companies that are in the United States. This subsidy is only to get foreign carriers to buy american products. This enables job security for american aircraft manufacturers.

     Overall, I do feel that the global "playing field" of long haul carriers is fair. While some governments give money to companies for their services, the US government offers the airlines large amounts of benefits in order to stay competitive. I do not see an issue with the government also "discounting" fleets for foreign carriers. This is an easy way to make other countries want to buy our products. It also allow for job security for working men and women in the United States.

Sources:

Leff, G. (2015). US Airlines Have Received More Subsidies than Middle East Ones - View from the Wing. Retrieved November 04, 2016, from http://viewfromthewing.boardingarea.com/2015/04/08/us-airlines-have-received-more-subsidies-than-middle-east-ones/

Open Skies Agreements. (n.d.). Retrieved November 04, 2016, from http://www.state.gov/e/eb/tra/ata/

Rapoza, K. (2015, May 16). Etihad Airways Sticks it to American Airlines. Retrieved from http://www.forbes.com/sites/kenrapoza/2015/05/16/etihad-airways-sticks-it-to-american-airlines/2/#34bd54104ffa