Weak and flimsy charges of subsidies and protectionism
Delta Airlines is leading an effort to petition the US government to sanction Etihad Airlines, Emirates Airlines, and Qatar Air. They charge that these three airlines have received government subsidies and are unfairly competing with US carriers resulting in a loss of jobs for American workers. Delta and its partners in the coalition it has formed, “Americans for Fair Skies”, have submitted a brief of their complaint to Congress, started an online petition campaign, and are sponsoring TV and radio ads to make their case against the three Arab air carriers.
I’ve read the brief and listened to the content of their ads and the statements made by their spokespeople and I am concerned — not because the US coalition presents a compelling argument. They do not. What is troubling is that precisely because their case is weak, the US coalition has shamefully stooped to subtle and not so subtle “Arab-baiting” in their efforts to demonise the Arab carriers.
In one ad, for example, Etihad, Emirates, and Qatar Air are described as coming from the “oil rich Arabian peninsula” and are guilty of receiving “billions of government oil money”. If you didn’t get the point, there’s a graphic accompanying the ad showing an Oriental-looking structure that turns out be an Arab bank/gas pump that is pumping dollars into an airplane. So much for subtlety.
One of the leaders of the effort, Delta Air Lines CEO, Richard Anderson, threw all subtlety to the wind in a mid-February CNN interview. Noting that the Arab carriers had rebutted the allegations that their governments had “subsidised” their operations and countered with the charge that the US airlines, themselves, had been the recipients of a $15 billion Congressional financial package after 9/11, Anderson said, “It’s a great irony to have the UAE from the Arabian Peninsula talk about that, given the fact that our industry was really shocked by the terrorism of 9/11, which came from terrorists from the Arabian Peninsula”.
At the 2013 Dubai Air Show, three UAE-based airlines announced purchases of Boeing aircraft totalling $130 billion, which according to Department of Commerce estimates will support almost 500,000 US jobs
An Emirates spokesperson responded by noting, in part, that “we believe that the statements made this week by Mr Anderson were deliberately crafted and delivered for special effect.” His assessment is “spot on” because Anderson’s crass comments and the content of the US coalition’s ads are all part of a tried and tested strategy used for effect by politicians and businessmen alike.
For example, in their effort to win public support for renewable energy, liberals, environmental groups, and companies that would benefit from the expanded use of wind and solar power, could make an environmental impact argument or a case for resource conservation — all of which are important and defensible concerns. Instead, they have, all too often, fallen-back on “Arab-baiting”. Speaking at the Democratic Convention in 2008, for example, then Montana Governor Brian Schweitzer repeatedly referenced “Arab oil” or “Middle East oil”. Each time he did so with snarl and each time he was greeted by thunderous applause. And in a famous 2009 TV ad promoting energy independence, sponsored by T. Boone Pickens, the same point is made by ominous-sounding Arabic music against a desert backdrop featuring burning oil wells guarded by American soldiers, with Arabic script thrown in for good measure.
All of these efforts have been, in fact, studied and deliberate. Pollsters who have conducted focus-groups on this issue have established that if a politician speaks about “dependency on oil” he gets a much less emotional response from his audience than he would get if he were to add “Arab” or “Arabian” or even “Middle East” as a modifier. And just as politicians pay attention to such polling data, so do CEOs about to launch a major campaign.
The campaign, itself, is based on a series of weak and flimsy charges of subsidies and protectionism. In reality, the US aviation industry was founded on both. To make the point, in 1998 Congressional Research Services completed a study of US government subsidies to American aviation from 1918 to 1998. The total was $155 billion and was deemed essential “to foster the growth of what has become the commercial aviation industry…in keeping with the aviation sector’s embryonic nature”.
The bottom line is that the US coalition’s case is weak, at best, and disingenuous, at worst. And because they don’t hold up, “Arab-baiting” appears to be the coalition’s last resort
In addition to the post 9/11 bailout and loan guarantee bills, the US government continues to fund infrastructure and operational services and to provide subsidies to US airlines for: “Essential Air Services” (subsidies underwriting costs for airlines to keep smaller markets on their routes); the “Reserve Air Fleet” (subsidies for agreeing to make their planes available, if needed, to the government); and an indirect subsidy in the form of the requirement that government employees must “fly American”. In addition, airports and the air traffic control infrastructure are built and maintained by tax-exempt entities. And then there is the Federal Law prohibiting foreign carriers from flying passengers between US cities.
As for the charge that the growth of Etihad, Emirates, and Qatar Air has cost thousands of American jobs, in fact, the opposite is true. At the 2013 Dubai Air Show, three UAE-based airlines announced purchases of Boeing aircraft totalling $130 billion, which according to Department of Commerce estimates will support almost 500,000 US jobs. Add to that the jobs created and supported by past purchases by just Etihad and Emirates and over 200,000 American workers have benefited from the growth of these two airlines. And then there are the thousands of jobs supported by these airlines at US airports and maintenance of aircraft.
One additional charge made by the US coalition to make their case is that Emirates is “stealing passengers from US carriers” is that Dubai is building a mega-airport too large for the UAE’s small population. What, of course, this charge ignores, is that the new airport is being constructed to support Dubai’s hosting of the 2020 World Expo.
The bottom line is that the US coalition’s case is weak, at best, and disingenuous, at worst. And because they don’t hold up, “Arab-baiting” appears to be the coalition’s last resort. It may be a way to prey on fear and deep-seated biases, but it’s a shameful way to try to win an argument. Shame on them.
