Open Skies: An Update

  In April 2015, I wrote about the fight brewing in the U.S. between the three major international air carriers (American, Delta and United) and the three Gulf carriers (Qatar, Emirates and Etihad).

My thesis was that this was part of a strategy to get better treatment from the U.S. government in a variety of areas, and to attain a favorable outcome during consideration in the US Congress of legislation to reauthorize the Federal Aviation Administration (the legislation includes many of the taxes and fees airlines and their passengers must pay).  While there were some wild statements from both sides, I believed this was a more limited strategy. And if you read, for example, the speech given by Airlines for America CEO Nick Calio at the International Aviation Club in Washington last Fall, there is much evidence for that.

What Has Happened Since?

In my view, the US airlines have taken a strategy that was plausible and pretty well considered and made a hash of it.  They began to believe their own rhetoric, a cardinal sin of such campaigns.  The fact that several major European carriers joined in just spooled them up further.  They made new enemies along the way including the cargo carriers and some of the other passenger carriers and they even questioned the motives and integrity of some of the individuals involved (another cardinal sin, don’t make new enemies along the way and don’t make it personal).  They also failed to understand that in the rapidly changing Middle East, their issues would pale in comparison to Iran and ISIS (as Benjamin Disraeli once said, “a leader must know himself and the times in which he lives.”  (The airlines made the cardinal sin of forgetting this).

The more attention they got, the more they overplayed their hand.  And now, with the Justice Department opening an investigation into their pricing and capacity practices, the going has gotten a whole lot harder.  (Though I am not sure how much there is to these allegations).

The US airlines were, in fact, gaining some traction with their arguments.  As a tactic in an overall strategy to get what they saw as better treatment from the government and Congress, their plan was starting to work.  

But just as it was starting to work, they overplayed their hand and committed three cardinal sins of such campaigns. They:

  • Began to believe their own rhetoric.
  • Made it personal and started to make enemies.
  • Forgot the larger context.

It is not too late for them to realize this and change tactics.

But there is little in the history of such fights to lead me to believe this will happen.