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US Travel Association Weighs in on Open Skies Debate

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Following a meeting between President Donald Trump and several top airline executives to discuss the Open Skies agreements, the U.S. Travel Association reiterated its position that Middle East carrier Qatar Airways is not harming U.S. travel interests.

“We have closely scrutinized Open Skies agreements and we simply do not agree that they are doing any harm to American businesses,” U.S. Travel Association Executive Vice President for Public Affairs and Policy Tori Barnes said in a statement. “On the contrary, our research shows immense benefits to the U.S. economy, jobs base and exports, and considerable harm if Open Skies is tampered with.”

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The Big Three U.S.-based airlines—American, United and Delta—have long contended that the Gulf region carriers (Etihad, Emirates and Qatar) have gained an unfair advantage in international flights by being subsidized by their respective governments.

The Middle East airlines have either flat-out denied the accusation or said any funding from the governments in Qatar and the United Arab Emirates have been loans that need to be paid back.

To his credit, Trump and Vice President Mike Pence airline-executives-meet-with-us-president-donald-trump.html” target=”_self” rel=”nofollow noopener noreferrer”>hosted the CEOs from both sides of the debate when he sat down with the heads of American Airlines and United Airlines, as well as Open Skies proponents JetBlue Airways, FedEx Corp, Atlas Air and—in something of a surprise—Qatar Airways CEO Akbar al-Baker.

“The president shares our concerns and instructed us to keep working with the U.S. Department of Transportation, which we plan to do,” Partnership for Open & Fair Skies managing partner Scott Reed told Reuters.

American Airlines Chairman and CEO Doug Parker also released a statement after the meeting:

“Today, we met with President Trump to discuss Qatar’s continued violation of its 2018 agreement with the United States. These violations represent a serious threat to the U.S. airline industry and the more than 1.2 million American jobs it supports,” Parker said. “The American Airlines team appreciates the opportunity to meet with the President and look forward to working with his administration to hold Qatar accountable and protect U.S. jobs.”

But the U.S. Travel Association’s Barnes said that’s simply not true.

“Apart from the Big Three, the entirety of the U.S. travel and tourism industry—including the rest of the aviation sector—strongly supports keeping Open Skies intact,” Barnes said.

This post was published by our news partner: TravelPulse.com | Article Source |

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Expect Airlines to Supply Fewer Options and Higher Fares After COVID-19

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While many in the air travel industry are, of course, hoping for a swift and complete rebound in passenger traffic once the COVID-19 crisis finally comes under control, others aren’t as optimistic.

In fact, aviation analysts are saying that the diminished demand for air travel brought on by the coronavirus pandemic will likely persist for quite some time, even once the threat of contagion has passed.

CNN Business’ coverage looked back at the commercial aviation industry’s path to recovery after the 9/11 attacks in 2001, pointing out that passenger traffic didn’t fully bounce back until 2004. And, in the wake of the 2008 Global Financial Crisis, it wasn’t until 2013 that passenger traffic again reached the levels seen in 2007, just prior to the recession. The slumps seen in air traffic during those two crises were just a fraction of what the world has witnessed over the past four weeks.

It’s likely to take a long time for passenger air traffic to rebound from this unprecedented downturn, even once people are able to start flying again. As airlines resume operations, they’ll be selective about the routes they maintain and reduce frequency in order to fill more seats per plane, which will lead to higher fares than were seen before the crisis.

Chief credit analyst for airlines for S&P Global, Philip Baggaley, explained that, as airlines return fewer planes to service and fill those in operation to maximum capacity, many of the low-costs seats that fliers once enjoyed booking will vanish. “Fewer seats flying means fewer cheap seats at the margin,” he said.

“There’s going to be fewer airplanes. That means less flying,” industry consultant, Mike Boyd, told CNN Business. “So, there’s going to be less choice, and you’ll be paying more. There’s no way around that.”

Historically, major economic blows to the industry have resulted in bankruptcies and mergers for the airlines. Prior to the 9/11 attacks, there had been nine major U.S. carriers, which afterward merged into today’s four major carriers, which last year accounted for 80 percent of passengers flown aboard U.S. airlines: American Airlines, United Airlines, Delta Air Lines and Southwest Airlines.

It’s possible, then, that a new wave of airline failures and mergers is on the horizon, especially given that the $50-billion federal bailout promised to the industry won’t even cover the near-$65 billion in revenue that U.S. airlines would have otherwise collected, even if they only matched last year’s numbers.

“In the near term, we’re going to see a shakeout,” said Joe Schwieterman, a transportation expert and professor at DePaul University in Chicago. “The weaker players may not survive this. Most industry leaders are expecting a long, painful recovery.”

This post was published by our news partner: TravelPulse.com | Article Source

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