WorldTraveler said:
the only question that matters is whether the ME3 airlines are subsidized by their governments.
http://atwonline.com/blog/thoughts-emirates-subsidy-filing-us-government
...The Emirates document also focuses on some of the side stuff that the US side has latched to its campaign, including trying to apply WTO anti-subsidy rules to Open Skies agreements. I’m not a lawyer, but this has always seemed to me a potential hole in the US carriers’ argument that they could and should have avoided; commercial aviation treaties are not governed by traditional trade agreements or the WTO and, because of the airline industry’s continued attachment to cabotage and ownership rules, doesn’t really desire to go that route. The US carriers are cherry-picking their “desires” from each set of rules, but the truth is that WTO rules are a moot point and for the most part US carriers and their labor groups would not support them.
Emirates, quite rightly, underscores this fact: “Much of the Big 3’s case rests on the legal premise that the WTO’s anti-subsidy rules apply to international aviation or is implicitly incorporated in the US Open Skies Agreements. This is fundamentally wrong. The WTO Agreement on Subsidies and Countervailing Measures (SCM agreement) does not apply to services, which are covered by a separate WTO Agreement, the General Agreement on Trade in Services (GATS). GATS explicitly excludes air transport services, and does not include rules on unfair subsidies.”
In another legal counterpoint, Emirates says, “the Big 3 also build their case for a unilateral freeze on Article 11 of the Open Skies Agreement, but this is the wrong article. Article 11 (“fair and equal opportunity”) deals with access. Subsidies are addressed in Article 12 which sets out specific procedures for dealing with artificially low prices “due to direct or indirect governmental subsidy or support”. In addition, both Articles 11 and 12 prohibit unilateral actions with very limited exceptions that do not include subsidies.”
This point allows Clark to address the broader issue of US government commitment to maintaining its Open Skies policy – one that, by all accounts, the US is indeed committed to. “By asking the US government to take unilateral action, the Big 3 are asking the US to breach its own negotiated international obligations. This would put in jeopardy America’s Open Skies relationships with 113 other countries, and all the significant public and competition benefits that the Open Skies program has generated,” Clark says.
Essentially, the Emirates document is part rebuttal of specific allegations made against the carrier; part a broader recap of the legal framework of Open Skies and aviation treaties; part a summary of the customer benefits that the Gulf carriers bring to US passengers (particularly those who want to get to the sub-Indian continent without inconvenient, long stop-overs through congested and strike-ridden European hubs); and part a reminder to the US government of the benefits that the three US carriers have received via Chapter 11, consolidation, antitrust alliances etc., while not necessarily, in the eyes of some, delivering on the customer service promise.
Each of the US carriers has very smart legal and government affairs teams. But I think they will have a hard time unraveling Emirates’ document from a legal and policy perspective. And that’s why I wrote in an
editorial during the very early days of this campaign that the three US majors should be careful what they ask for.