Washington — Michigan legislative and business leaders are backing Delta Air Lines and other major U.S. carriers in seeking to freeze new routes from state-owned Persian Gulf airlines.
The top four members of the state Legislature wrote the Obama administration saying without action it could force Delta to make cuts at its hub at Detroit Metropolitan Airport.
The letters criticized subsidies received by Qatar Airways, Etihad Airways and Emirates Airline, and said that American Airlines, Delta Air Lines and United Airlines “have thoroughly documented the more than $42 billion in subsidies and other unfair government benefits that have been funneled to the Gulf carriers over the last decade.”
“If Delta and the other major U.S. carriers are forced to cut back on international routes due to the unfair competition, cities with major airports like Detroit and throughout Michigan will feel the pain,” said the letter signed by Sen. Majority Leader Arlan Meekhof, R-West Olive; House Speaker Kevin Cotter, R-Mount Pleasant; Sen. Minority Leader Jim Ananich, D-Flint; and House Minority Leader Tim Greimel, D-Auburn Hills.
“As U.S. airlines are then forced to also trim domestic routes, the pain will spread to cities and towns with small and mid-sized airports. Given that every daily international round trip flight lost by U.S. airlines equates to more than 800 U.S. jobs lost, we know that the pain would be severe. Delta and its regional carrier Delta Connection employ 10,000 people statewide in Michigan.”
The letter, posted on a federal website last month, criticized the “Gulf airlines’ massive and unfair subsidies.”
Delta employs more than 7,500 people at Detroit Metro and generates over $210 million in annual tax revenue, the letters said. Delta accounted for nearly 80 percent of the 32.5 million passengers that flew in or out of Metro last year.
The Michigan Chamber of Commerce and Detroit Regional Chamber of Commerce also wrote letters to the Transportation Department. Dearborn Heights Mayor Daniel S. Paletko also wrote on behalf of U.S. carriers. The Romulus City Council — where Metro is located — also approved a resolution in April in support of the U.S. carriers.
Earlier this month, the U.S. Transportation, Commerce and State Departments said they will consider public comments until Aug. 3 on “assertions that three foreign airlines — Emirates Airline, Etihad Airways and Qatar Airways — have received and are benefiting from subsidies from their respective governments that are distorting the global aviation market.” Updates on previously filed comments can be submitted through Aug. 24.
Paletko wrote the “situation must be addressed, there is too much at stake to ignore it. The University of Michigan-Dearborn recently calculated that DTW generates more than 86,000 jobs and about $10.2 billion in total economic impact throughout Michigan. DTW is a vital contributor to Dearborn Heights and the surrounding cities’ economies.”
Michigan Chamber President Rich Studley wrote: “Michigan businesses become less competitive if our airlines are forced to cut back flights and we will all lose if jobs are cut.”
But U.S.-UAE Business Council President Danny E. Sebright criticized the claims by American, Delta and United as “misleading and threatens to undo the substantial economic benefits that Open Skies has provided to the U.S. economy, to U.S. airlines and to the U.S. aviation industry at-large.”
Sebright wrote that the “Big Three U.S. airlines meanwhile are attacking Gulf carriers for receiving subsidies while ignoring the enormous amount of direct U.S. government aid that they themselves receive and have received for decades. Since 2001, U.S. carriers have received some $15 billion in direct cash payments and loan guarantees from the U.S. government.”
He noted that four carriers handle 80 percent of U.S. airline seat capacity. “We believe that the accusations being made by the Big Three are in-fact a cover for fair competition, which is what truly threatens to reduce their market share. By actively lobbying against foreign carriers from gaining permits to establish footholds in the U.S., domestic carriers have been able to reap massive gains from consumers by placing a monopolistic premium on ticket sales – directly hurting customers,” he wrote.
Last month, 21 U.S. Senators signed on to a bipartisan letter urging consultations with Qatar and UAE, as did 262 House members in May.
“We are concerned that these actions by Qatar and the UAE may be distorting the market in favor of their state-owned airlines, and violate our bilateral Open Skies agreements,” said the letter that was signed by Sens. Debbie Stabenow, D-Lansing, and Gary Peters, D-Bloomfield Township, among the 21 senators.