EU air levy plan set to heighten tension with US
By Daniel Dombey, Francesco Guerrera and Michael Mann in Brussels
Published: March 8 2002 20:12 | Last Updated: March 9 2002 13:25
US airlines could face tariffs under European Commission plans set to be unveiled days after the US enraged Brussels by announcing anti-dumping duties on steel imports.
At its meeting on Tuesday the Commission is scheduled to approve a proposal to levy duties and restrict landing rights on non-European Union airlines that benefit from unfair subsidies, a step likely to aggravate trade tensions.
The US expressed concern. "We think this is the wrong path to take," said an official on Friday.
EE-Kay From Ireland, joined Nov 2001, 152 posts, RR: 2 Reply 4, posted (11 years 2 months 2 weeks 1 day 8 hours ago) and read 3870 times:
STT757: You're right - EU carriers are more vulnerable now. The European Commission no longer permits hefty subsidies and grants from governments... but in the US, the contrary seems to be going to hold true .
STT757 From United States of America, joined Mar 2000, 16255 posts, RR: 52 Reply 5, posted (11 years 2 months 2 weeks 1 day 8 hours ago) and read 3855 times:
If you take away international routes, flights, large widebody aircraft, landing fees, crew costs etc from the big 6 and just look at the Domestic market they most certainly make money.
It's airlines like UAL and NWA's huge fleet of widebodies like the 747s , astronomical crew pay associated with those large aircraft and long routes, and exposure to economic downturns like the Asian financial crisis which have put them in the red. Take all that away (without taking a charge for it) and im sure the reduced costs would offset the lost revenue (atleast in the last couple of years).
Airlines that built themselves on their strong Domestic networks like AA, DL, and UAL have grown while airlines dependent on international travel like Pan Am and TWA are gone.
AA, DL, and UAL made huge profits from domestic travel in the 60's through the mid 80's. In the early 80's UAL, AA and DL had almost no international flights. The profits from their Chicago-NY and Coast-Coast business travelers gave them tremendous capital to go on a spending spree in the late '80s and early '90s buying up international networks from Eastern, Pan Am and TWA.
Prior to lets say 1986, you could probably count the number of international routes AA, DL and UAL had on one hand. But they were still much bigger and twice if not 3x more profitable than PA or TWA who were big Interantional players.
STT757 From United States of America, joined Mar 2000, 16255 posts, RR: 52 Reply 6, posted (11 years 2 months 2 weeks 1 day 8 hours ago) and read 3845 times:
European carriers don't get subsidies ?..
What would you call British Airways near monopoly at Heathrow, the British Gov't refuses to allow CO, DL and NWA landing rights. Why?.. To protect British citizens from the lower airfares more competition would bring. Ha!.
DeltaSFO From United States of America, joined Nov 2000, 2488 posts, RR: 24 Reply 7, posted (11 years 2 months 2 weeks 1 day 8 hours ago) and read 3873 times:
Apart from WN how many of them are profitable domesitcally?
Delta's domestic system is consistently profitable. You'll find the same is true of the other Big 3, as well as the rest of the majors, who don't have nearly as much international exposure as UA, AA, and DL. Check the 2000 Annual Reports.
It's a new day. Every moment matters. Now, more than ever.
777236ER From , joined Dec 1969, posts, RR: Reply 9, posted (11 years 2 months 2 weeks 1 day 8 hours ago) and read 3844 times:
This is a direct relatiation to the steel tarrifs. A few days ago I could have said "The US needs to tread very lightly. If the EU adds tarrifs to their steel producers, we'll probably see a few more heading into bankruptcy."
And btw, people go bankrupt, companies go insolvant.
Bmi330 From United Kingdom, joined Nov 2001, 1449 posts, RR: 1 Reply 10, posted (11 years 2 months 2 weeks 1 day 8 hours ago) and read 3832 times:
just the eu and the us trying to have a face off as always to see who is bigger. if you ask me all airlines should be abile to fly what everv they want anywere in the world like ba could fly jfk-lax ans ual could fly lhr-cdg whats it got to do whith anything where an airline is from they should fly where every they dam want and as menay flight as they want if you ask me
Aerokiwi From New Zealand, joined Jul 2000, 2410 posts, RR: 4 Reply 12, posted (11 years 2 months 2 weeks 1 day 8 hours ago) and read 3830 times:
So the United States continues along the lines of "Do as I say, not as I do." Typical. the hypocrisy here from the Bush Admin is increadible. Why should anyone listen to him about free trade and access to markets ever again?
Magyar From Hungary, joined Feb 2000, 596 posts, RR: 0 Reply 14, posted (11 years 2 months 2 weeks 1 day 7 hours ago) and read 3785 times:
If the international market is so irrelevant or even loss making
for the US airlines then why they are participate in it? Why
don't they just sell those big loss maker birds and concentrate
on the domestic market?
STT757 From United States of America, joined Mar 2000, 16255 posts, RR: 52 Reply 16, posted (11 years 2 months 2 weeks 1 day 1 hour ago) and read 3729 times:
"Just like DaimlerChrysler, Daimler makes billions of profit, while chrysler loses billions "
Um excuse me but your pompous ignorance is untolerable.
Are you forgetting a little episode called WWII, where NAZI Germany started a World War in which tens of millions of people were killed.
The German war machine included many companies such as Daimler Benz.
The US had to spend Billions of our own tax payer money and millions of mothers had to give their son's lives to defeat Germany.
And after the War what did we do with the ruble of Western Europe, make them Suffer as the Russians did with the Eastern European Countries. NO!
President Truman and the US Congress went ahead with the Marshall plan which spent BILLIONS more of US tax payer money rebuilding the lives and economies of the same people who were trying to kill us.
50 years after WWII Western Europe's people and companies like Benz thrive because the US SUBSIDIZED THEM, so the people of Western Europe could work and not starve. Go ask the folks who lived in the Eastern block countries like Poland, the former East Germany and Romania how they faired after WWII.
I laugh when the EU complains about US subsidies, because if the US had not spent the Billions to rebuild Western Europe there would be no EU, no Airbus, no Daimler Benz, no Siemans. Nothing.
STT757 From United States of America, joined Mar 2000, 16255 posts, RR: 52 Reply 18, posted (11 years 2 months 2 weeks 1 day 1 hour ago) and read 3723 times:
Cheap steel has been dumped on the markets by Asian and European companies, where's everybody missing the picture?..
You make the assumption that UAL wouldn't be here if it weren't for the grants because of economic circumstances or mis-mangement , that may be true to an extent. However that alone isn't enough to get the Congress to throw them money.
More likely it was due to the fact that teams of International terrorists had targeted US airline flights on 9-11 as symbols of the US GOV't, the pilots of these flights had their throats slashed and the planes were crashed into buildings killing thousands.
US AIRLINES were targeted for attack by terrorists who viewed thm as symbols of the US.
This caused a (short term) crisis in the US airline industry, which was alleviated by the grants.
THE GRANTS WERE NOT SUBSIDIES to weak performing companies, but were compensation for victims of the attacks. The tens of thousands of airline employees were as much targets as the actual victims who lost their lives on 9-11, the terrorists were purposly commiting acts of terrorism on many levels economic, psychological etc.
The airlines and their employees were compensated for their economic losses just as the families of victims who lost their lives on 9-11 are being compensated for the lost wages their loved ones could have earned over their lifetimes.
Lj From Netherlands, joined Nov 1999, 4142 posts, RR: 1 Reply 20, posted (11 years 2 months 2 weeks 20 hours ago) and read 3678 times:
STT757, you should get your facts straight. US airlines DID dump seats on the European market. Maybe the grants weren't intended as subsidies but the US airlines did use them as subsidies to get traffic. Maybe the best proof is that all US airlines lowered their fares ex Amsterdam to real rock bottom levels (one US airlines was even willing to sell AMS-NYC for EUR 100).
However, the fact that US airlines dumped on the Europe-Amrica route was understandable. What wasn't (and triggered a very negative response by the European airlines) was that US airlines also started dumping on the Europe-Latin America route. Fares on Amsterdam - Sao Paulo and fares to many other Latin American destinations reached a new low point after September 11th with the US airlines taking a lead in selling the real rock bottom fares. Without any doubt these fares were below cost and thus may be considered dumping.
Fortunately the US airlines discovered they were doing something stupid and stopped most dumping fares late December. However, they EU already started an inquiry by then.
BTW before you say that EU airlines did also receive compansationm I have to point out that the EU airlines only received compansation for the 4 days that they couldn't use American and/or Israeli airspace. The numbers are very low. Finally, next time anyone accuses EU airlines of getting subsidies they must know that these things are all over and subsidies from governments are forbidden and the EU Commission looks after that it won't happen (and the majority of European airlines haven't received state support for years.
Cyprus-Turkish From United States of America, joined Nov 2001, 199 posts, RR: 0 Reply 23, posted (11 years 2 months 2 weeks 19 hours ago) and read 3642 times:
EU's action against the US carriers is totally understandable and it is a strong way to retaliate against the US protectivism. WTO allows US administration to enforce import controls upto a certain level and Bush has taken advantage of that to protect the domestic companies. In the very same way the EU is placing its own restrictions without breaking any international agreements.
There has not been anything done by either administration which can be classified as illeagal, but EU is trying to show that it can stand up against the US to protect the economic interests of its countries. Hardening the commercial environment is not going to help either side. It will only reduce competition and hamper the consumers so it is to our best interest that the restrictions are removed we have a freer atmosphere for trade.