Las Vegas Tourism Saw Visitor Decline After Mass Shooting

Isaac Brekken  / Associated Press

The mass shooting that took place in Las Vegas on October 1 has led to a 4.2 percent drop in tourist numbers for the destination. Isaac Brekken / Associated Press

Skift Take: It’ll most likely take months for Las Vegas to see the record tourism numbers the city is used to having, but it’s a resilient travel destination and likely always will be.

— Deanna Ting

Trip cancellations and postponements in the wake of last month’s mass shooting prompted a 4.2 percent decline in visitors to Las Vegas for the month of October.

Some 3.6 million people visited the city last month, the Las Vegas Convention and Visitors Authority said Thursday. Even a 36 percent surge in convention attendees, to 687,000 people, wasn’t enough to overcome the fallout from the massacre. Gambling revenue on the Las Vegas Strip fell 6.1 percent to $528.7 million, according to data released separately by the Nevada Gaming Control Board.

A gunman firing from MGM Resorts International’s Mandalay Bay resort killed 58 people and wounded hundreds more on the night of Oct. 1. Las Vegas hotels remained open for business, but casino operators stopped marketing for a week or more out of respect for those killed and injured.

MGM Chief Executive Officer James Murren said on a Nov. 8 conference call that cancellations subsided by mid-October, with the exception of Mandalay Bay, where the company took longer to resume marketing. “We’ve seen bookings improve, our business improve, here in November,” he said.

©2017 Bloomberg L.P. This article was written by Christopher Palmeri from Bloomberg and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to

Ryan Wolkov

PRC Time Shares

Author: Ryan Wolkov

Powered by WPeMatico

Uber Lost $1.5 Billion in the Third Quarter So Can It Be Profitable?


Uber CEO Dara Khosrowshahi addressed Uber employees on his first day in the post on August 30, 2017. He is tasked with finding a way to make the company profitable. Uber

Skift Take: Can Uber ever be profitable? One thing is clear: The company will have to find a way to ensure its big payouts for legal woes become truly one-time — and not ongoing — expenses.

— Dennis Schaal

With so many scandals, it’s easy to lose track of one of the biggest problems over at Uber’s San Francisco offices: figuring out how to make money, or at least lose less of it.

I got my hands on some never-before-published financials and talked to Uber insiders about what to make of them. The blood-letting is jarring. Over just three months this year, the ride-sharing company lost $1.5 billion.

We’re getting this information now because SoftBank and Dragoneer finally launched their bid to buy Uber shares at an implied $48 billion valuation. I’m getting messages from former employees who are trying to figure out the deal. One wrote, “Uber. Where longterm former employees ask reporters for information about their tenders.”

Interested Uber shareholders got an overwhelming packet of information on the deal from NASDAQ Private Market, including Uber’s financials. A few noble employees read me the numbers over the phone.

Here are the numbers you should pay attention to mixed in with some useful financial information that Uber has provided me in the past.

Gross bookings: $8.9 billion
Net revenue: $2.01 billion
Total cost and expenses: $3.33 billion
Loss from operations: ($1.33 billion)
Net loss: ($2.66 billion)

Gross bookings: $20 billion
Net revenue: $6.45 billion
Total cost and expenses: $9.42 billion
Loss from operations: ($3 billion)
Net loss: ($319 million)

2017 Second Quarter
Bookings: $8.74 billion
Net revenue: $1.66 billion
Non-GAAP gross profit: $749 million
Pro forma EBIT loss: ($645 million)
Adjusted EBIT loss: ($894 million)
GAAP loss: ($1.06 billion)

2017 Third Quarter
Bookings: $9.71 billion
Net revenue: $2.01 billion
Non-GAAP gross profit: $865 million
Pro forma EBIT loss: ($743 million)
Adjusted EBIT loss: ($1.15 billion)
GAAP loss: ($1.46 billion)

It’s worth noting that in 2015 and 2016, Uber’s net revenue included the total fare for the carpooling service UberPool, inflating the amount of revenue. Uber has since changed its accounting practice based on revised GAAP rules, and only includes its share of the revenue from UberPool.

OK. What to make of all this? Let’s look at the bull case first. Here’s how Uber has pitched investors over the years: Focus on gross bookings. That’s the figure that reflects the total value of fares paid to drivers. It is a massive number and it keeps doubling.

Gross bookings have grown exponentially for years, from $685 million in 2013 to $2.9 billion in 2014 to $8.9 billion in 2015 to $20 billion last year, according to a chart Uber provided in April. Last year, Uber more than doubled at massive scale.

Now look at 2017, Uber has said that its first quarter gross bookings were $7.5 billion. Add that to the gross bookings numbers disclosed to investors and we get to $26 billion over nine months this year. Uber’s fourth quarter is traditionally Uber’s best quarter thanks to holiday travel. If Uber’s fourth quarter grew by half as much as it did last year, it would reach $11 billion. That would translate to $37 billion in gross bookings for the year. Uber would come just short of doubling its gross bookings compared to the previous year.

(In the summer of 2016, Uber told prospective investors that the company was targeting gross bookings between $38 billion and $42 billion for 2017. So even with a truly terrible, god awful year, the company could just miss its target.)

The bull case is also buoyed by signs that Uber can increase its share of gross bookings, what the company calls its take rate. In the second quarter of this year, Uber’s share of gross bookings came in at 19 percent. In the next quarter, Uber took nearly 21 percent. That increase is good news for Uber’s shareholders and bad news for drivers. Uber has told investors in the past that it thinks that it can sustainably reach a take rate of from 22 percent to 26 percent of gross bookings.

HOWEVER, unless you’re Amazon, eventually you have to make a profit. Enter the bear case.

Uber had previously disclosed to investors and the press a number it refers to as “pro forma adjusted EBIT.” That is, its loss excluding one-time expenses like legal penalties and write-downs. It also excludes interest, taxes and stock-based compensation. According to that way of doing the math, Uber’s loss was only $743 million in the third quarter of this year.

I can see why the company likes that number. The question is whether fines, lawsuit settlements and write-downs are unusual or a perpetual feature of Uber’s business model. I’d recommend re-reading my story on Uber’s legal problems.

Uber’s true net loss, which the company is disclosing for the first time to investors, is jarring. Uber lost $1.46 billion in the third quarter. Uber’s loss from continuing operations is on track to significantly surpass the $3.2 billion achieved in 2016. (One note: Uber’s 2016 loss looks so small because the company took credit for the sale of its China business to Didi. Look at operating loss if you want to understand the outflows that year.)

As worrying as the depths of Uber’s loss, is its trajectory. Even when you look at the numbers as Uber likes to count them, the company’s loss grew by 15 percent in the third quarter from the previous three months. At the end of the first half of this year, Uber had $6.6 billion cash on hand so it won’t run out anytime soon.

As gross bookings continue to soar, the question remains whether Uber will ever be able to make a profit.


©2017 Bloomberg L.P.

This article was written by Eric Newcomer from Bloomberg and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to

Ryan Wolkov

PRC Time Shares

Author: Ryan Wolkov

Powered by WPeMatico

Vietnamese Agency Vntrip Raises $10 Million: Travel Startup Funding This Week


A user tries to book travel on Vntrip. The startup’s fundraising in the past year makes it the third-most successful Vietnamese startup at fundraising after two non-travel companies Momo, which raised $28 million, and F88, which raised $10 million. Vntrip

Skift Take: After years of following startup funding trends, it’s tempting to move to a developing country to start an online travel agency or metasearch company. On the other hand, we can list dozens of reasons not to.

— Sean O’Neill

Each week we round up travel startups that have recently received or announced funding.

The total raised this week was more than $22 million.

>>Vntrip, a Vietnamese online travel agency that is essentially a white-label affiliate of, has raised $10 million in a Series B funding round. Hendale Capital, a Hong Kong-based firm, led the round.

Vntrip debuted for consumers in 2016, when it raised a $3 million Series A round led by former Alibaba chief technology officer John Wu.

The company wants to repeat the funding feat accomplished by Traveloka, an online travel agency in Indonesia that raised about $500 million in the past year.

Smaller Vietnamese competitors include Abay, Atadi, Tugo, and VietnamUniquetour, but foreign brands dominate the market.

There are Vietnamese businesses which were originally set up as tour operators but have shifted to become OTAs, such as.

>>Airside Mobile, an Arlington, Virginia-based maker of a mobile passport app, raised $6 million in Series A equity funding.

Blazar Ventures and Grotech Ventures led the round. Bain Capital Ventures and 8VC also pitched in.

The company, which launched in 2014 and is led by CEO Hans Miller, said that more than 2.5 million travelers have used its mobile passport, which gives expedited processing through U.S. passport control and customs at 24 major airports and Port Everglades in Fort Lauderdale, Florida.

The company intends to use the funds to add its service to additional airports and other locations and to create other identity-related products. U.S. Customs and Border Protection authorizes the app, and the Airports Council International-North America, the Boeing Co., and Port Everglades are sponsors.

>>Travlr, a travel marketing, trip curation, and booking platform, has raised a $3.7 million, or $5 million Australian, in Series A funding from private investors.

The company has been around for 2.5 years but is an outgrowth of The Bali Bible, a travel guide that emphasized the social sharing of recommendations. It draws more than 2 million monthly visits to its 290,000 pages of user-generated recommendations, it said.

The husband-and-wife co-founders have great marketing traction on Instagram. The hashtags #thebalibible and #balibible have been used 1.6 million times on the image-sharing site.

In January Travlr plans to enhance trip booking by accessing the data feeds of airlines and companies like and Agoda. By selling placement of ads on its existing platform, it claims to earn revenue of $2.83, or $3.75 Australian, per user, on average.

>>FewoFerien, a vacation rental, hotel and flight metasearch company, received $2.1 million, or €1.8 million, in a convertible debt by undisclosed private investors.

The Frankfurt am Main startup has nine employees across its FewoFerien and U.S.-facing HolidayHomes brands.

Founded earlier this year, FewoFerien claims it has already become the second-largest platform in Germany by buying traffic and using feeds from providers like HomeToGo and Skyscanner for content. SimilarWeb reports 1.03 million visits for, 404,124 visits for, 374,921 visits for, and 336,420 visits for for the three-week period between October 23 and November 11.

Check out our previous startup funding roundups, here.

Ryan Wolkov

PRC Time Shares

Author: Ryan Wolkov

Powered by WPeMatico

Asian Activities Booking Platform Klook Heads to the Americas

Klook  / Facebook

Klook employees at a booth. Klook is targeting the U.S. for its first office outside Asia. Klook / Facebook

Skift Take: Hong Kong-based Klook has selected the Americas as its first stop for expansion outside Asia. To beat the deeply entrenched competition, it will have to find partners that can adapt to the needs of Asian travelers.

— Raini Hamdi

Editor’s Note: Gateway is a Skift series featuring first-hand, original stories from our correspondents embedded in cities around the world. The logo reflects where the correspondent is based and not necessarily the article’s focus. Read about the series here.

Travel activities booking platform Klook, which recently took on Goldman Sachs as a new investor, will open an office in the U.S. after sensing a rising tide of Asian independent travelers to the U.S., Canada, and Latin America.

Klook plans on having a U.S. team operational from January in either San Francisco or New York. The team will source travel activities in the Americas that fit Asian travelers’ interests, and ramp up outbound marketing.

Klook’s president and co-founder Eric Gnock Fah would not go into details on how big the team will be, only saying “the U.S. market is so dynamic, our local team will be moving rapidly and work in an agile way.”

“We hope to create a notable impact to both activity providers and travelers in the U.S. by the end of 2018,” he added. “Our [Asian] travelers will start to see more diverse offerings in the Americas from the end of Q1 in 2018.”

The company also aims to tap the U.S. market heading to Asia. Klook currently has offices in 13 cities including its headquarters in Hong Kong.


Klook is entering a market ruled by giants like TripAdvisor-owned Viator and Expedia, but Gnock Fah believes the timing is right for Klook to expand.

The Series C funding of nearly $60 million led by Goldman Sachs should help open doors for a U.S. expansion. After amassing over nine million visitors each month to its website and app since launching in 2014, Klook wants to open doors for U.S. travel providers to reach the fast-growing Asian market.

Klook’s success in Asia has hinged on helping Asian travelers book services at the last minute or upon arrival in destination. These include local transportation, Wi-Fi, single-day tours, outdoor excursions, and food and dining options. Other platforms often require users to book more than 24 hours in advance and don’t offer a best-price guarantee.

As Asia’s largest in-destination travel activities booking platform, Klook’s goal is to help U.S. travel providers tap into the fastest-growing travel markets in the world like Greater China, South Korea, Indonesia, and Thailand.


There’s a gap where U.S. travel companies “are unable to effectively reach out to users in Asia-Pacific region,” according to Gnock Fah.

While the U.S. has vibrant resources in terms of travel partners, and many popular destinations for many Asian travelers, Gnock Fah said there is a lack of experiences tailored for the Asian market.

A deeper understanding of the home market is where he thinks Klook can make a difference for travelers.

“On the supply side, it will be our priority to find service providers who are able to adapt to the diverse Asian traveller interests,” said Gnock Fah of his strategy. “It will be our priority to find partners who are able to adapt to accommodate the varying languages, socio-economic levels, payment channels, and dietary restrictions of Asian travelers.”

At a glance, it may seem that Asia’s outbound travel market, estimated at over 180 million travelers per year, is distributed rather evenly, with mainland China taking up 37 percent, the rest of North Asia totalling 31 percent, and Southeast Asia and India at 32 percent. Gnock Fah points out, however, that Asia isn’t homogenous; it consists of numerous markets with their own distinctive languages, cultures, and religions.

“There isn’t one formula that fits all as each country comes with its unique travel preferences and purchasing behavior,” he said. “We foresee we may spend more time to help enhance U.S. operators’ understanding of Asia including knowing the priority of which market to target for their offerings.

“Since our launch in 2014, we’ve seen success in forming merchant partnerships in Asia. Our team has helped merchant partners to successfully tap into markets they knew little about by leveraging Klook’s expertise of Asian travelers. We hope to ensure that merchants in U.S. will also have the chance to take advantage of Klook’s market knowledge and tech solutions to diversify and optimize their revenue source.”


Gnock Fah believes its strong supply network and exclusive benefits from direct partnerships will give it an edge for U.S. travelers headed to Asia. As of October 25, it claimed over 30,000 attractions, tours, activities, and essential travel services offered in more than 120 destinations, with over 3,000 industry partners.

Upcoming international events like Winter Olympics and Summer Olympics held in South Korea and Japan in 2018 and 2020, respectively, pose another opportunity.

“We are expecting a further influx of travelers from the Western countries into Asia,” said Gnock Fah. “As Asia’s largest in-destination travel activity booking platform, we hope to attract these travelers with our wide variety of activities in Asia and our user experience is also designed for native English speakers.”

Klook is also cementing its mobile-first and instant confirmation solutions, and creating personalized experiences through artificial intelligence tools since demand for spontaneous travel will keep growing. Its statistics show that 50 percent of users book Klook upon arrival, and 70 percent of those bookings are made via mobile.

The company is investing in voice search technology along with personalized experiences for users. Some of these features will likely be rolled out by mid-2018.

Ryan Wolkov

PRC Time Shares

Author: Ryan Wolkov

Powered by WPeMatico

Half of European Business Travelers Shun Their Corporate Booking Tools

Mark Fischer  / Flickr

Flyers walk in front of a mirror at Charles de Gaulle Airport in Paris. Mark Fischer / Flickr

Skift Take: Business travelers in Europe are completely divided on how they prefer to book their work travel. Travel management companies need to make their online booking tools more compelling and easier to use.

— Andrew Sheivachman

Safety and security have taken on a newfound importance in the corporate travel ecosystem as the world has become a more dangerous place.

For international business travelers in Europe, however, the benefits of travel management company safety measures don’t outweigh the ease of booking a trip how they want.

The Global Business Travel Association and Concur polled 735 business travelers in the UK, Germany, and France on their business travel booking habits and security concerns. The research found that business travelers will book outside of policy, even if travelers know it’s less safe for them.

This is bad news for travel management companies, which have introduced traveler tracking and safety tools in recent years. If traveler data isn’t in the system, they can’t be tracked and helped out if something goes wrong, which can pose legal and liability issues.

“During these times of global uncertainty, business leaders have a responsibility to know where employees are and keep them safe and informed,” said Scott Torrey, Concur’s chief revenue officer. “One of the most surprising results of the study is that half of business travelers know that not booking through company channels can affect their safety but a majority still book outside.”

In fact, corporate booking tool usage has decreased in some European countries despite technological advances in recent years. About half book using a company-approved tool.

Business Travelers With Access to an Online Booking Tool Who Used It Each Year
Germany UK France
2015 52% 51% 60%
2016 57% 59% 60%
2017 51% 51% 51%

“While the majority still book through an [online booking tools], the irony is that roughly 7 out of 10 travelers booked outside of company channels at least once in the past year, even when they had access to an [online booking tool],” states the report.

Travelers were totally mixed on their preferred booking channel. Online booking tools obviously don’t offer an attractive use case for business travelers rnow with so many other options out there.

If Business Travelers Had No Restrictions, How Would They Book?
Germany UK France
Supplier Direct 23% 27% 32%
Online Travel Agency 26% 31% 23%
Online Booking Tool 27% 24% 25%
Travel Management Company 23% 19% 18%

The research also provides more insight into the awareness gap between what travel programs offer and whether travelers know about all the services available to them.

“…. Access to various risk management services is far from universal. Roughly one-third or more do not have access to various basic risk management services. This could reflect that many travelers are not part of a fully managed program.

“However, even when travelers say their company uses a ‘travel management company for any product or service,’ more than one-fifth do not think they have access to various key services. These travelers may not be aware of services that are actually available to them or work for companies that use [travel management companies] in a limited way.”

More than half of those polled said their company provides travel safety training, for instance, but the content and quality of that training varies wildly between organizations.

Ryan Wolkov

PRC Time Shares

Author: Ryan Wolkov

Powered by WPeMatico

Lyft Begins Its Business Travel Journey — Corporate Travel Innovation Report


A woman catches a Lyft in a Lyft promotional photo. Lyft

Skift Take: One should expect Lyft to officially partner with more big travel management companies over the next year. It’ll be interesting to see how the company’s corporate travel push lines up with its international expansion aspirations.

— Andrew Sheivachman

We took last Thursday off to gorge on turkey and stuffing, but we’re back today with the latest in corporate travel.

Lyft’s first major foray into corporate travel, through a partnership with Carlson Wagonlit Travel, has finally been unveiled. Travel managers will have access to better analytics about what their travelers are up to, so that’s good.

Uber has a commanding lead in popularity among business travelers, but when has Uber’s scale ever stopped Lyft from making pragmatic, useful upgrades to its service? We’ll see where Lyft goes from here as it gets ready for an IPO sometime in the future.

There’s a lot more below, ranging from a look at Hogg Robinson Group’s airline distribution aspirations to updates on how global airlines are (finally) making business class better for travelers again. Check it out.

— Andrew Sheivachman, Business Travel Editor

Business of Buying

Lyft Finally Goes Corporate With Carlson Wagonlit Travel Deal: Lyft is playing catch up in the corporate travel sector, and partnerships with the major global travel management companies are a good way to increase adoption. Uber’s lead, however, remains enormous.

IAG Is Bringing Discount Airline Level to Paris: IAG is obviously pleased with Level’s performance in Barcelona, but Paris is likely to be a bigger challenge given the strength of Air France-KLM in that market and its new millennial-focused airline Joon.

Lufthansa to Offer Revamped Business Class With Seats 7 Feet Long: Lufthansa had nothing approaching an on-time arrival when it came to introducing lie-flat seats in 2013, and now it hopes to get a leg or two up on the competition. We’ll leave it to the reviewers to give us the pros and cons once the new seats are airborne.

Delta Brings Back Complimentary Upgrades for Frequent Flyers: Delta is slowly restoring benefits once-lost to SkyMiles members, but it’s more of a competitive move against other carriers than an olive branch for passengers.

Airline Food Conundrum – Paid Meals Winning Out Over Freebies: Airline food isn’t always tasty, but passengers probably shouldn’t compare it to what they find in a restaurant. Delivering food to an aircraft is a logistical challenge, and it’s amazing the system works as well as it does.

Safety + Security

New Expensify Feature Raises Privacy Concerns: Maybe using a marketplace to scan receipts isn’t a good idea if any of its workers can access your customers’ data. Just a thought.

Disruption + Innovation

Blockchain for Hotel Distribution Will Come Down to the Economics: Decentralized applications for hotel distribution will soon live side-by-side with existing channels.

Onefinestay CEO Views Hyper Personalization as Next Stage of Luxury Rentals: In other words, don’t expect AccorHotels to be vying for Wyndham’s European vacation rental business anytime soon.

Hogg Robinson Thinks It Has a Technology Edge on Its Corporate Travel Competitors: IATA’s New Distribution Capability appears to finally be gaining traction in corporate travel. Airlines want it to succeed as much as travel management companies, which will have access to a greater amount of content like seat upgrades and other ancillary products.

Airbnb Will Finally Let You Split Payments Among Multiple People: Paying for Airbnb rentals just got easier for small-to-medium sized businesses.


Skift Business Travel Editor Andrew Sheivachman [] curates the Skift Corporate Travel Innovation Report. Skift emails the newsletter every Thursday.

Subscribe to Skift’s Free Corporate Travel Innovation Report

Ryan Wolkov

PRC Time Shares

Author: Ryan Wolkov

Powered by WPeMatico

American Airlines Vows to Fight Racial Bias But Is It Enough?

Tony Gutierrez  / Associated Press

American Airlines CEO Doug Parker met twice with NAACP officials to address complaints about racism at his airline. Tony Gutierrez / Associated Press

Skift Take: CEO Doug Parker clearly doesn’t want to see the airline take a brand hit on race relations. American Airlines is saying all the right things, but is its response to the NAACP complaints a crisis communications maneuver or a game-changing attempt to change its culture?

— Dennis Schaal

Under pressure from the NAACP, American Airlines is promising changes in the way it trains employees and handles passenger complaints about racially biased treatment.

The airline announced the steps Thursday after a meeting between CEO Doug Parker and NAACP President Derrick Johnson.

The civil rights organization issued a travel advisory in in October warning African-Americans they could face discrimination when flying on American. The alert followed several high-profile incidents including one involving an organizer of the Women’s March who was booted from a flight after a dispute over her seat.

American pledged to hire an outside firm to review its diversity in hiring and promotion, train all 120,000 employees to counteract so-called implicit bias, create a special team to review passengers’ discrimination complaints, and improve resolution of employee complaints about bias.

The NAACP did not immediately respond to a request for comment.

The airline’s promise followed the second meeting between Parker, Johnson, Women’s March organizer Tamika Mallory and others at American’s headquarters in Fort Worth, Texas.

In October, Mallory called an American Airlines pilot a racist after he ordered her off a flight in Miami. She posted an emotional video about the incident on Facebook, which has been viewed 530,000 times, and mulled whether to take legal action against American.

Two weeks later, the NAACP issued its warning to African-American travelers.

Parker’s initial response was to defend his airline’s diversity — about 15 percent of its employees are African-American, slightly more than the national average — but call the NAACP’s criticism an opportunity for the airline to improve and become a leader on issues of diversity and inclusion.

On Thursday, Parker said in a note to employees that the criticism has led to conversations with outside groups as well as the airline’s own employees “that we may not have otherwise had.”

Since the start of 2016 through September, American has been the subject of 29 racial-discrimination complaints by passengers, more than any other U.S. carrier although a tiny fraction of the airline’s passengers.

Paul Argenti, a professor of corporate communication at Dartmouth University who wrote about racism at the Denny’s restaurant chain in the 1990s, called American’s measures Thursday a good first step but inadequate to significantly change the airline’s culture.

“This is the kind of thing you do to get by. I don’t think it’s enough,” he said.

American should take bolder steps, including naming more minorities to senior executive positions and the board of directors, Argenti said.

However, David Margulies, president of a Dallas firm that advises companies on crisis communications, said American had handled the NAACP’s criticism well — in part by not being overly defensive or argumentative.

“This says, ‘We want to do better, we recognize there could be an issue, and here’s what we’re going to do,’” he said. “I think they’ve been smart and strategic about it.”


David Koenig can be reached at


This article was written by David Koenig from The Associated Press and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to

Ryan Wolkov

PRC Time Shares

Author: Ryan Wolkov

Powered by WPeMatico

Lawmakers Ask Transportation Department to Intervene in U.S.-Gulf Carrier Spat

Carlos Delgado  / Wikimedia Commons

An Emirates Boeing 777-300ER on approach to Madrid. Some U.S. lawmakers would like the Department of Transportation to solve an ongoing dispute between U.S. and Gulf airlines. Carlos Delgado / Wikimedia Commons

Skift Take: This is more complicated than the trade group representing the three largest U.S. airlines likes to suggest. Yes, Gulf carriers probably steal business from U.S. airlines. But if the U.S. punishes them, there could be consequences for other American businesses. This saga requires a delicate solution.

— Brian Sumers

U.S. airlines have spent three years pleading for federal action to curb fast-growing Persian Gulf carriers, claiming their rivals benefit from billions of dollars in unfair government aid.

But now, a group of lawmakers is offering a more modest solution: vetting those claims through a decades-old Department of Transportation process created to prevent foreign governments from meddling in airline competition. Sending the dispute to DOT would be a way to diffuse the longstanding dispute, and preserve ties with the growing tourist and commercial hubs, they say.

Under the 1974 law, U.S. transportation officials have six months to decide whether a claim merits federal action. That is the proper channel to evaluate claims against Emirates, Etihad Airways PJSC and Qatar Airways Ltd., the lawmakers say in a letter they are circulating that will be sent to Secretary of State Rex Tillerson, Transportation Secretary Elaine Chao and Commerce Secretary Wilbur Ross.

It’s the latest development in a more than two-year quest by Delta Air Lines Inc., American Airlines Group Inc. and United Continental Holdings Inc., the three largest U.S.-based carriers, to combat what they say is tens of billions of dollars in subsidies that have flowed to the Gulf carriers from the governments of Qatar and the United Arab Emirates.

A decision reached under the law would allow Congress and the White House “to develop a fact-based response” to the allegations, “rather than responding to the politically-charged rhetoric,” said the letter, drafted by Tennessee Republican David Kustoff and so far signed by 13 other GOP lawmakers and two Democrats.

The U.S. airlines have lobbied both the Obama and Trump administrations to intervene on their behalf. They’ve asked to block the Gulf carriers from gaining access to new routes and want the U.S. to revamp Open Skies treaties with Qatar and the U.A.E.

President Donald Trump in March said he would help U.S. airlines compete with overseas players getting government help, saying, “It’s a very unfair situation.”

But other airline companies, including JetBlue Airways Corp. and FedEx Corp., and U.S. hotel and gaming businesses have contested the legacy carriers arguments, the lawmakers say in their letter. The letter, signed mostly by Republicans from Southern states, asks the Trump officials to resist those requests for a more-aggressive response.

The lawmakers cite concerns that meddling with the Gulf states’ Open Skies agreements would endanger other agreements with more than 100 other nations, putting billions of dollars at risk for smaller airlines, the tourism industry and manufacturers such as the Boeing Co.

“We understand that there are great American businesses on both sides of this issue,” Kustoff said in a statement. “That is why we are clarifying that there is a legal process in place to resolve this dispute, enacted by Congress in 1974, which has been used more than 75 times.”

–With assistance from Michael Sasso

©2017 Bloomberg L.P.

This article was written by Ryan Beene from Bloomberg and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to

Ryan Wolkov

PRC Time Shares

Author: Ryan Wolkov

Powered by WPeMatico