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What Chicago Leaders Need To Know About Open Skies

August 1, 2015 Destination North America No Comments Email Email

The Big 3 U.S. airlines—American, Delta and United—are on a mission to selectively “freeze” some service from foreign carriers that threatens their competitive stranglehold, but provides untold benefits to travelers and Chicago’s economy and jobs market. The Big 3 tell horrific tales about jobs losses and fair play, but here are the facts:

Open Skies brings more overseas visitors to Chicago, fueling economic growth, job creation and higher tax revenue.

  • According to research by Oxford Economics, last year, the Gulf carriers brought 95,000 passengers to Chicago, who spent $183 million at Chicago area businesses. This spending contributed nearly $197 million to GDP, generated $53 million in tax revenue and supported nearly 2,500 jobs.1
  • Many of these new international visitors come from the growing travel markets of India, the Middle East and Africa, which are poorly served by the Big 3 U.S. airlines.

Big 3 warnings about cutting jobs and flights are just tired, empty threats.

  • Three years ago, Houston approved a project to expand the city’s William P. Hobby Airport, which would allow Southwest Airlines to offer international service in competition with the Big 3. United CEO Jeff Smisek vowed to “cut jobs and service” and warned that Houston would “suffer the consequences of this decision for decades to come.”2
  • Yet in May, United broke ground on a new 265,000 square foot terminal at Houston’s George Bush Intercontinental Airport, even as upgrades to the airline’s home-city hub at O’Hare continues to languish. The buildup in Houston following the United-Continental merger has led Chicago business reporters to question whether United is “two-timing Chicago.”3

Flights by Gulf carriers complement, and do not overlap, service by the Big 3 U.S. airlines to Chicago.

  • The Big 3 U.S. airlines and the Gulf carriers do not compete on a single route to Chicago.
  • Of the 1,700 worldwide routes served by the Big 3 and the Gulf carriers, the two airline groups compete on exactly two routes.4

U.S. airlines get hundreds of thousands of new passengers and hundreds of millions in new revenue from additional traffic generated by international carriers.

  • Over 620,000 passengers arriving in the U.S. on a Gulf airlines flight transferred directly to a flight by a U.S. carrier. These feeder passengers generated $140 million in revenues by U.S. airlines in 2014.5

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