May 20, 2015

The Honorable Anthony R. Foxx Secretary of Transportation US Department of Transportation 1200 New Jersey Avenue SE Washington, DC 20590
The Honorable John F. Kerry Secretary of State US Department of State 2201 C Street NW Washington, DC 20520
The Honorable Penny Priztker Secretary of Commerce US Department of Commerce 1401 Constitution Avenue NW Washington, DC 20230
Dear Secretaries Fox, Kerry and Pritzker:
On behalf of the Minnesota Chamber of Commerce, I am writing to you today to express our concerns regarding information that we have recently received relating to significant subsidies that Qatar Airways, Etihad Airways and Emirates Airline have received from their home governments. These subsidies, estimated to be $42 billion over the past 10 years, are a violation of the Open Skies agreements that the United States has with Qatar and the United Arab Emirates ("UAE") and has created an uneven playing field. If allowed to continue, these subsidies could result in American carriers being forced to shut down previously profitable routes and putting thousands of well-paying U.S. jobs at risk. This ultimately could lead to the loss of critical air service at the Minneapolis/St. Paul International Airport and jobs throughout our region.
Home to a major hub of Delta Air Lines, Minneapolis/St. Paul International Airport provides a vital link between Minnesota and the world. Delta operates more than 400 flights per day to over 130 domestic and international destinations making the airline an integral part of Minnesota's economic development. The strong level of air service that our region enjoys has helped fuel Minnesota's economic growth and put our state on the global map.
Since their inception in 1992, the Open Skies agreements have brought significant benefits to the State of Minnesota and the U.S. economy by establishing a level playing field and clear guidelines for international air travel. While the MN Chamber of Commerce is not seeking an end to the agreements with Qatar or the UAE, we are concerned about the issues that have been raised. Some have argued that Qatar, Etihad and Emirates are stimulating economic growth in the United States by driving more air traffic and tourism to our cities and

www.mnchamber.comtherefore the massive subsidies they receive should be overlooked. However, nothing could be further from the

truth. With the subsidies that they are receiving, these three airlines are taking over routes that are not profitable (in fact they lose money) and most of their planes operate half empty. Since 2008, nearly 11,000 daily seats have been added between the United States and Abu Dhabi, Dubai and Doha- 95% of those seats by these Gulf Carriers. Yet over the same period, the average daily bookings between the U.S. and the three Gulf hubs have only increased by 85 passengers a day. Only 85 passengers but 11,000 seats: that's not stimulating traffic and tourism, its dumping seats in a marketplace in anticipation of exploiting their inflated market share down the road.
If this issue of unfair competition is not addressed, Delta's hub in Minnesota, and other airline hubs across the country, could be significantly impacted. U.S. carriers may be forced to reduce or terminate their own services on international routes, or forego entry on routes they would otherwise have entered. In addition, the loss of international routes has the potential to reduce passenger flow on domestic routes putting those routes in jeopardy as well. Any of these actions would have a significantly negative impact on the State of Minnesota.
Open Skies agreements only work if all of the parties are playing by the same rules. Please help to keep all Open Skies agreements open and fair by addressing the subsidies that are being unfairly provided to these three carriers.
Sincerely,



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William A. Blazar Interim President



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