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EDITORIAL

Keep air travel competitive, fair

Detroit Free Press Editorial Board

There's a once-daily Delta Airlines flight from Detroit to Marquette, in the Upper Peninsula, that wouldn't seem to have much to do with a fight over the huge expansion of international flights by three Middle East airlines.

But it does.

And that Marquette flight, along with air service to small communities around the nation, is at risk if the Obama administration doesn't confront — first through negotiation, and then maybe restricted market access — the unfair advantage those foreign airlines have appropriated for themselves.

A report comissioned by Delta, American and United airlines found that Qatar and the United Arab Emirates have funneled more than $42 billion in subsidies to Emirates, Qatar and Etihad airlines in the last decade, fueling a huge expansion in those airlines' international business.

Essentially, the report says the foreign governments are coordinating with the heads of the airlines, and are directing government resources toward huge airport expansions, low-cost equipment acquisitions and government-backed or sponsored loans — all to help the airlines grow their international passenger service.

The countries and the airlines deny breaking trade rules, but there's no question that whatever they're doing is working.

Emirates, Etihad and Qatar are the fastest-growing airlines in the world, and are doubling down on the wide-body jets (such as the massive, 544-passenger Airbus A380) that are used on long-haul international routes. Emirates is taking nearly half of all the A380s produced or under production, and the three airlines will soon have more wide-body capacity than the entire American wide-body fleet.

And remember — these are small countries whose international travel isn't growing nearly at the rate of these airlines.

So much of that capacity is being filled by pass-through traffic at sub-market prices made possible, the U.S. carriers say, by the government subsidies. And the effect is a poaching of customers from U.S. carriers that can't offer the same rates because they don't have the government subsidies.

The U.S. airlines' international business operates on a hub-and-spoke network that relies on passengers starting out in smaller communities, flying to larger hubs and then connecting to international destinations.

But that traffic is increasingly bypassing the initial stages of that network in this country — and flying through destinations in U.A.E. or Qatar instead.

Delta, for example, used to have a direct flight from New York to India. But the airline has stopped the flight, while Emirates Airlines has increased its capacity on a flight from New York through Dubai to India.

If Emirates were winning that fare battle without subsidy, Delta would have no complaint. But because of the suspect relationships between the government in U.A.E. and Emirates Airlines, this raises serious fair trade issues.

If the trend continues, U.S. carriers will have to dump more than international flights. The other spokes in the network will be at risk, too, and places like Marquette or Alpena or Lansing — small communities whose air service operates on the thinnest of margins — would likely be hit hardest.

This doesn't yet have the makings for a trade war, but the Obama administration would be smart to back the idea of an earnest sit-down with the Middle East governments and carriers. Let them open their books to reveal how close the transactions are between the government and industry. Let them defend their practices in frank talks.

That's not much of an ask by the U.S. airline industry. And if it will ultimately protect air service in small-market U.S. destinations, even better.

The administration can't act soon enough.