America is still in a fugue state following what is likely the most ridiculous election since 1876. A lot of people are still trying to come to grips with what it means to have a Trump administration – I myself can’t believe I just wrote those last two words. And yet, before the final votes are even counted, the carrion birds are circling.
Delta, American, and United are lobbying Trump for support against the rapidly expanding Gulf carriers. Now, let me start by admitting that there is some merit to the argument that the Gulf carriers are heavily subsidised by their respective governments.
Given this argument you might call me a bit dramatic in my headline. But, trust me, the airlines aren’t being any less dramatic when they argue that “the Gulf carrier subsidies threaten the jobs of 300,000 U.S. aviation workers and the American aviation industry as a whole.”
This statement is alarmist scaremongering because the Aviation industry has never been healthier. And, while the profits have been skyrocketing, the airfares themselves have been predictably inelastic. Now, granted, we are seeing a drop in fares across the board in a lot of markets but those drops are “a pittance compared to the profits airlines are reaping thanks to phenomenally cheap fuel costs“
So, given how invariably in all scenarios it is the general public that ends up getting the wrong end of the stick, I’m not sure that the increased competition from the Gulf carriers is a bad thing. Indeed, it might help drive some of those increasing profits into the pockets of the consumers.