America’s Biggest Airlines Echo Trump’s Trade Rhetoric
Much of corporate America may cringe over some of Donald Trump’s policy positions, in particular his stance on trade. But the billionaire’s rhetoric bears a striking resemblance to arguments that have been made by a critical segment of the American business community—U.S. airlines and their unions.
The three largest American carriers contend that three rivals in the Middle East, subsidized by the governments of United Arab Emirates and Qatar, don’t compete fairly on international routes. Emirates, Qatar Airways Ltd., and Etihad Airways PJSC threaten the U.S. airline industry and some 300,000 jobs, according to the Partnership for Open & Fair Skies, a lobby group funded by American Airlines Group Inc., Delta Air Lines Inc., and United Continental Holdings Inc. Seven unions that represent pilots and flight attendants are also on board.
The Big Three U.S. airlines say that the Middle East trio has received more than $50 billion in subsides “and other unfair benefits” from their governments, violating the Open Skies agreements the U.S. has signed with Qatar and the UAE. Trump has made trade a central issue in his campaign, and a former Democratic presidential candidate, U.S. Senator Bernie Sanders, shared similar views on some trade deals, a position credited with prompting Democratic Party nominee Hillary Clinton to drop her support for the Trans-Pacific Partnership, or TPP.
Regardless of who wins in November, the clamor over trade—and the TPP in particular—means the issue is likely to be front and center come 2017. But the warnings from the big airlines about foreign encroachment and unfair advantage clearly sound like the views of one candidate in particular.
Asked about the airline industry effort in Washington, Delta Chief Executive Officer Ed Bastian said the Big Three are hopeful their fight will resonate under a new president.
“In a future administration, candidly, this argument sells even stronger,” Bastian said in a May interview at his Atlanta office. “With the rhetoric that’s going on about trade and the U.S. having been taken advantage of, I think there is a much bigger ear there than ever before. And we’re not going to stop.”
“It’s clear that both campaigns, both Sanders’s campaign and the Trump campaign, has sparked a dialogue, a national dialogue that wasn’t happening a couple years ago,” he said.
Trump has regularly criticized U.S. trade policy under President Barack Obama, portraying current deals as enormously advantageous to trading partners such as China and Mexico—at American expense. “I like fair and smart trade because every trade deal we make stinks,” Trump has said. He vowed to scrap the TPP, which includes the U.S. and 11 Pacific Rim nations, and force a renegotiation with Canada and Mexico of the 1993 North American Free Trade Agreement, “to get a better deal by a lot—not just a little, by a lot” for U.S. workers. Absent a renegotiation, Trump pledged to withdraw the U.S. from that pact.
And for the U.S. airlines, it’s not just about the Middle East. As a candidate, Sanders also waded into another specific industry issue. It involved a dispute between Norwegian Air and U.S. carriers. The suburban Oslo-based low-cost airline wants to use subsidiaries based in the U.K. and Ireland to expand its trans-Atlantic service. American airlines and its unions have opposed the Norwegian carrier’s applications with U.S. regulators, which have languished since late 2013. Sanders listed the Norwegian Air dispute as a specific issue on the platforms section of his website, entitled “Preventing a Global Race to the Bottom in the Airline Industry.”
The rhetoric from both major candidates suggests that Trump is more of a “true believer” on trade deals and might seek to reverse globalization across a range of industries, but Clinton may help U.S. carriers “at the margins,” said Seth Kaplan, a managing partner at trade journal Airline Weekly and co-author of Glory Lost and Found, a recent book that details Delta’s dramatic turnaround. “It’s fair to think that their grievances might get more of an airing under the next administration,” Kaplan said.
Not all U.S. airlines oppose the Middle East trio’s expansion. That fight has split the U.S. industry, with carriers that include FedEx Corp., JetBlue Airways Corp., and Alaska Air Group Inc. pitted against the three large passenger carriers. Delta said Wednesday it had contested a General Services Administration award to JetBlue of a government contract for flights between New York and Milan, a route JetBlue sells under a codeshare with Emirates. Delta contends that travel awards to Emirates violate the Fly America Act, which requires U.S. government-funded travel to be on a U.S. airline. The actual awards are to JetBlue, though it doesn’t fly its own aircraft to Europe or the Middle East.
“The GSA awards contracts that deliver the best value to the U.S. taxpayer, and JetBlue is honored to have this traffic with our codeshare partner,” the airline said in a statement. In January, United ended its service from Washington to Dubai following a similar GSA award it lost to JetBlue-Emirates.
This summer, U.S. State Department officials met with representatives of the UAE and Qatar in Washington, and further meetings are scheduled this fall. “Both Hillary Clinton and Donald Trump say they care about American jobs and are concerned about foreign government subsidies undermining U.S. businesses,” said Jill Zuckman, a spokeswoman for the U.S. airline group. “We have thousands of good-paying, middle-class American aviation jobs at risk due to more than $50 billion in subsidies propping up the government-owned Middle East carriers.”
But despite the similar, protectionist sentiments, the money isn’t headed Trump’s way. Several airline industry executives have donated to candidates in the current presidential election, led by Delta Chairman Richard Anderson. He and his wife have given more than $353,000 to groups supporting Hillary Clinton, according to the Center for Responsive Politics, which tracks campaign contributions. In past races, Anderson has also given to Republicans, and he continues to donate to the party’s congressional candidates. United CEO Oscar Munoz donated $2,700 to former Florida Governor Jeb Bush in his failed campaign for the Republican nomination, while American CEO Doug Parker and Bastion have contributed only in Congressional races this cycle. Delta President Glen Hauenstein has given Clinton $2,700, as did American’s new president, Robert Isom Jr., who also gave Texas Senator Ted Cruz $1,000 last year in his bid for the Republican nod.
Whether Clinton or Trump wins, Bastian said he is confident that “both administrations, given what I understand about their respective platforms … should be receptive to our concerns.” When asked which candidate he’d like to see occupy the White House, Bastian had a quick answer: “I’m not going there.”