U.S. and UAE strike Open Skies agreement

16 May, 2018, 12:11 | Author: Regina Silva
  • AP United States and Emirates strike deal resolving airline spat

"This agreement will freeze Emirates and Etihad Airways from adding additional direct flights from the United States to Europe and Asia", Reed clarified in a statement.

The US airlines contended that Gulf carriers are being unfairly subsidized by their governments with more than $50 billion in support over the last decade.

USA carriers claimed vindication this week after a deal was signed May 11 to end an acrimonious war of words with Gulf carriers over alleged government subsidies. The trade-off is that the existing 2002 Air Transport Agreement remains in force with all rights and provisions.

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The document does include language that requires airlines from the US and UAE to produce audited financial statements that meet internationally recognized standards at least annually. "The Record of Discussion also makes clear that the UAE and its designated carriers are and have always been in full compliance with the Agreement, and that there were never any violations of the Agreement by UAE carriers", Emirates said in its statement.

The voluntary agreement, which applies to Etihad and Emirates airline, is similar to a deal announced in January between the United States and Qatar in which Qatar agreed to release detailed financial information about state-owned Qatar Airways.

The financial disclosures are an attempt to assuage concerns among United States airlines that Emirates received substantial subsidies from the UAE government, resulting in unfair competition. Currently, Emirates offers flights directly from New York-area airports to Milan, Italy, and Athens.

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But this was muddied by a statement by the UAE Foreign Minister welcoming the agreement.

UAE airlines now serve 12 U.S. gateways with 131 flights a week and supporters of the Gulf carriers estimate the services generate tens of billions of dollars into both economies and support hundreds of thousands of jobs.

In an email Monday, State Department spokeswoman Farahn Morgan said that the UAE had informed the department that Emirates and Etihad "have no current plans to make changes to the Fifth Freedom services that they operate to the United States".

Delta CEO Ed Bastian said the deal will allow the carrier to re-launch flights from Atlanta to Dubai, which it discontinued in 2016 due to heavy competition.

Delta stopped flying to Dubai, home of Emirates, in 2015.

Delta and competitors American Airlines and United Airlines have complained for years about the expansion of three Persian Gulf carriers - Qatar Airways, Abu Dhabi-based Etihad Airways and Dubai-based Emirates Airline, saying they receive state subsidies that have created unfair competition for the US airlines. "For us this was leveling the playing field for our U.S. stakeholders and there's the added benefit here of increased financial transparency".

"[Dubai] was one of the markets that we've been run out of", Bastian added.



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