Global Competition

Unfair Business Practices Threaten U.S. Airlines

For decades, the United States has pursued Open Skies agreements to increase market access for carriers, employees, passengers, and shippers. These agreements create fair and equal opportunities for all countries to compete, establishing a mutually beneficial marketplace where foreign carriers gain access to the U.S. market while U.S. carriers gain access to theirs, creating more jobs for all. However, some foreign airlines have adopted unfair business practices that undermine competition, weaken aviation safety, and threaten U.S. pilot jobs.

If left unchecked, these practices will disrupt labor relations, aviation safety, and the stability of the domestic airline industry. The U.S. government must enforce fair competition and prevent job-killing business models from taking root.

Key Issues Impacting Fair Competition

These unfair business practices threaten U.S. airlines and weaken global aviation safety standards:

Flag-of-convenience airlines register in countries with weak labor and safety laws to cut costs.
Atypical employment models misclassify pilots as independent contractors, undermining job security and safety reporting.
Regulatory gaps allow unfair competition, putting U.S. airlines and workers at a disadvantage.

Congress and regulators must protect U.S. airline jobs and ensure a fair marketplace.

Global Competition FAQ

A flag-of-convenience airline is one that registers in a country other than where its headquarters or primary operations are based to take advantage of weaker employment, tax, and safety laws. This practice was originally used in the maritime industry and has now made its way into aviation.

Flag-of-convenience airlines and other atypical employment practices allow foreign carriers to avoid labor protections and undercut U.S. airlines, threatening job security, wages, and benefits for American pilots and aviation workers.
To ensure a level playing field and protect U.S. airline jobs, the U.S. government must:
- Conduct a public-interest test before granting foreign air carrier permits to prevent unfair business models.
- Enforce the labor protections in Open Skies agreements to ensure international airlines follow fair employment standards.
- Strengthen oversight of foreign carriers to prevent flag-of-convenience schemes from undermining labor and safety regulations.
- Prioritize labor standards in aviation policy to protect airline workers from unfair competition.
- Hold airlines accountable for employment practices that misclassify pilots and cabin crew, weakening labor protections.

Flags of Convenience: A Race to the Bottom

For more than a decade ALPA has fended off "flag of convenience" airlines from spreading in the U.S. These foreign carriers typically structure their operations in atypical ways and "forum shop" for the lowest wage, regulatory, or tax laws. These practices, if allowed to continue, will undermine the stability of the U.S. airline industry, aviation safety, and cost U.S. jobs.

International aviation should not be a race to the bottom for worker wages and benefits, and the U.S. should do more to promote and protect U.S. airline workers and U.S. airlines. The U.S. Department of Transportation should prioritize U.S. workers as part of the standard public-interest analysis when evaluating foreign and domestic airline certification and joint ventures between air carriers.