March 20, 2015

The Honorable Anthony R. Foxx Secretary of Transportation US Department of Transportation 1200 New Jersey Ave SE Washington, DC 20590

The Honorable John F. Kerry Secretary of State US Department of State

2201 C Street NW Washington, DC 20520

Dear Secretaries Kerry and Foxx :

On behalf of the California Chamber of Commerce, I’m writing to you today about an important step we can take to level the playing field for American businesses and maintain the environment of fair market competition that has been a hallmark of America ’s success.

Over the past decade, Qatar Airways, Etihad Airways and Emirates Airline have received at

least $42 billion in government subsidies and other unfair benefits in violation of U.S. Open Skies policy. The CalChamber is asking that the U.S. government open consultation s with
Qatar and the United Arab Emirates (UAE) in order to address the massive , market

- distorting subsidies that those nations provide their state

- owned airlines.

As you may know, the California Chamber of Commerce is a broad

- based nonprofit membership organization through which business, industry and agricult ure join forces to work toward positive action on key issues that affect California ’ s economic climate.

The organization, established in 1890, is the largest and most broadly based employer representative in California. Our members include over 14,000 fir ms of all kinds and sizes, representing three million jobs

-- one quarter of the state ’ s private sector workforce, as well as

450 affiliated local chambers of commerce and 200 trade associations.

The California Chamber supports expansion of international trade and investment, fair and equitable market access for California products abroad, and elimination of disincentives that impede the international competitiveness of California business.

To be clear, the CalChamber firmly support s Open Skies and recogniz es the considerable

benefits that the policy has brought to U.S. travelers and the U.S. economy. We are not seeking to end the agreements with Qatar and the UAE, nor are we raising concerns with regard to any of the more than one hundred other Open Skies agreements. The CalChamber is requesting c onsultations, which are provided for within the Open Skies agreements

themselves.The tens of billions of dollars in subsidies are distort ing the free market framework established

by Open Skies and they will ultimately have a negative economic impact here in the United

States if we allow them to continue

. The heavily subsidized competition by the Gulf carriers is contributing to excess capacity, which draw s passengers and revenue from U.S. airlines. If

U. S.

- based airlines continue to lose market share, it will lead to service cuts and ultimately American job losses. In fact, according to a white paper released by the Partnership for Open &
Fair Skies, each route that is lost to Qatar, Etihad or Emirates wi ll result in an average net loss

of 821 good U.S. jobs. These are jobs that we cannot afford to lose and they should not be lost

as a result of unfair competition from foreign carriers

.

In response to these very serious concerns , some have stated that Am erican, Delta and United must simply do more to compete and offer better services. The CalChamber is familiar with these airlines and their services in our region

, and can assure you that they can compete with any airlines in the world as long as they are co mpeting on an equal playing field and everyone

is playing by the same set of rules

. It is the U.S. government’s responsibility to en sure that is the case with regard to Open Skies policy , which is why the CalChamber is asking you to open

consultations on this issue so that the flow of subsidized capacity into the U.S. market can be

addressed

.

Thank you for your consideration of this important issue.

Sincerely,

Allan Zaremberg

President and CEO

California Chamber of Commerce

cc : Senator Dian n e Feinstein

Senator Barbara B oxer