American, Delta, and United are about to escalate their fight with Gulf rivals via the Senate’s new tax bill. Bloomberg explains that rules that protected foreign carriers from having to pay corporate taxes are going to be repealed in a very targeted way.
If a country’s carriers are to qualify for the exemption, a tax treaty with the U.S. must be in place and U.S. airlines with at least $1 billion in annual revenue must have at least two weekly arrivals and departures there. That’s a remarkably efficient way of singling out Emirates, Qatar Airways Ltd. and Etihad Airways PJSC without being seen to do so. Large U.S. airlines have hardly made a secret out of the fact they no longer fly to the Gulf, something they blame squarely on unfair competition in the region. As a result, the repeal will only affect the countries that America’s big three want to exclude, leaving friendlier rivals in Europe and Asia intact.
The move has angered Alaska and JetBlue who say the move won’t work. They predict retaliation by foreign governments which will impact the big 3 US carriers, and more importantly jeopardize the numerous partnerships Alaska and JetBlue have with many foreign carriers.
Earlier this year, American, Delta, & United placed ads in Trump’s Favorite TV shows and newspapers at a six-figure cost. The Partnership for Open & Fair Skies, an advocacy group that represents American, Delta, United, and five flight attendant and pilot unions was behind the campaign. They asked Trump to protect American jobs by stopping “illegal competition” from Emirates, Etihad, and Qatar.
TV shows targeted included Fox and Friends, a show that the President is known to watch…and tweet about.
They then targeted his favorite newspapers, The New York Post and The New York Times (“favorite” in terms of hate reading I guess). They directly refer to the new Emirates EWR-Athens flight in the first line of the ad. Interestingly the letter is signed by all of the big three, but not in alphabetical order… Delta, United, American. Delta is known to be the most invested in the group.
“The billions of dollars in illegal Gulf carrier subsidies are brazen violations of our Open Skies agreements and a perfect example of the type of trade cheating that President Trump abhors,” said Jill Zuckman, chief spokesperson for the Partnership for Open & Fair Skies. “There are 1.2 million quality American jobs that are being threatened every day by Emirates, Etihad and Qatar airlines. We are respectfully looking to President Trump and his administration for help.”
The print ads will run in The New York Times and New York Post featuring a letter to President Trump signed by: American Airlines, Delta Air Lines, United Airlines, the Air Line Pilots Association, the Allied Pilots Association, the Southwest Airlines Pilots’ Association, the Association of Professional Flight Attendants and the Association of Flight Attendants-CWA. The six-figure television ad buy will run for the next three weeks.