Will Trump as president spell bad news for fast-expanding Gulf carriers?
Dubai’s Emirates Airline, Abu Dhabi’s Etihad Airways and Qatar Airways have been in the crosshairs of US aviation groups since January 2015
Having pledged to build a wall on the Mexican border, repeal Obamacare, tear up the Iran nuclear deal, and “bomb the hell out of ISIS”, Donald Trump is unlikely to treat civil aviation as an urgent priority when he becomes the 45th US President next year.
However, presuming the Republican’s protectionist rhetoric was not mere bluster, there is little doubt that a Trump administration will soon take aim at the Middle East’s three super-connector airlines.
Dubai’s Emirates Airline, Abu Dhabi’s Etihad Airways and Qatar Airways have been in the crosshairs of US aviation groups since January 2015, when lobbyists presented President Barack Obama’s administration with evidence of state subsidies totaling $42 billion. These handouts, the lobbyists contend, give the Gulf carriers an unfair advantage over US competitors that have to operate on purely commercial terms. Their proposed remedy is to revoke the Open Skies treaties that America has signed with Qatar and the UAE, in effect blocking the Gulf carriers from launching additional US routes.
One emotive claim by the lobbyists – that 821 American jobs are lost every time a US-operated daily flight to the Gulf is axed – will be impossible for Trump to ignore given his repeated promises to stop other countries “taking our jobs”.
For their part, of course, the Gulf carriers deny receiving unfair subsidies and accuse their older US counterparts of exploiting comparable benefits over the decades. Many analysts and travel-industry groups have endorsed their stance, citing the broader economic benefits that accompany Gulf route launches. Other pundits remain skeptical, pointing to the reluctance of Etihad and Qatar Airways to publish full financial disclosures.
The Obama administration has so far shown little appetite for intervening in the commercial dispute; possibly because it disagrees with the moral or legal justification for revoking Open Skies; more probably, because it does not want to antagonize key allies in the geopolitically unstable Gulf region.
But Trump’s dual pledges to reinvigorate domestic US industry and re-negotiate liberal trade deals with foreign governments suggest that he will take a far tougher line.
“We look forward to briefing President-elect Donald Trump and his new administration on the massive, unfair subsidies that the UAE and Qatar give to their state-owned Gulf carriers,” said Jill Zuckman, spokeswoman for the Partnership for Open and Fair Skies, the main lobbying vehicle representing US interests.
“The Gulf-carrier subsidies threaten the jobs of 300,000 US aviation workers and the American aviation industry as a whole, and we are optimistic that the Trump administration will stand up to the UAE and Qatar, enforce our trade agreements, and fight for American jobs.”
Reacting to news of the Republican’s electoral victory, Akbar Al Baker, the chief executive of Qatar Airways, downplayed the likelihood of an imminent change in US policy.
“I have always said that the rhetoric that surrounded Mr Trump's campaign with respect to our region is only political in nature,” he was quoted as saying by aviation news website Flightglobal. “I am certain that the road ahead will clearly demonstrate that Qatar and the United States have enjoyed a longstanding partnership and are close allies.”
Al Baker had previously weighed in on Trump’s threat to temporarily ban Muslims from entering the US, telling CNN that the Republican – whom he describes as a friend – was “naïve to make such statements” but that they were solely intended to “gain political mileage” from the electorate.
The Qatari boss is probably correct on that front given the huge constitutional, logistical and cultural hurdles awaiting Trump if he attempts to deport people or deny visas based solely on religion. But enacting protectionist measures in the aviation sector would be a much easier task, and one that still delivers on the Republican’s pledges to “put America first” and “bring back our jobs”.
Separately, European aviation is also now bracing for a Trump presidency. While there are no efforts to roll back EU-US Open Skies, several American unions have sought to block low-cost carrier Norwegian Air Shuttle from expanding in the transatlantic market. They accuse Norwegian of exploiting a flag of convenience in Ireland that allows it to undercut unionized labor costs. In May, Hillary Clinton’s campaign endorsed their stance.
Until Trump publicly comments on these two disputes, we can only speculate as to his administration’s future policies in the aviation sphere. The billionaire’s penchant for pragmatic compromises and opportunistic deal-making means that even a tough line in public will not necessarily be matched by actions behind the scenes.
But one thing is clear: the President-elect has an uphill battle delivering on the myriad promises he made during his campaign. Back-tracking and goalpost-moving will inevitably be needed.
And as that reality sinks in, Trump’s supporters will demand evidence that the revolution is still on-track. Civil aviation – both a symbol for, and enabler of, global connectivity – seems an obvious target.