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What to Expect After the UAE-U.S. Open Skies Deal
On Friday, American and Emirati officials quietly signed a deal that should help end the battle that has been going on for years between airlines over the freedom of the skies.
In a private meeting at the State Department on Friday, Emirati Ambassador Yousef al-Otaiba and Assistant Secretary of State Manisha Singh signed the agreement, which, according to the Associated Press, will require Emirati carriers—chiefly Emirates and Etihad—to make public their financial statements in addition to stating separately that, at the moment, they have no plans to launch further fifth-freedom routes to the U.S.
Both sides touted the agreement, which bears a striking resemblance to that announced between the U.S. and Qatar earlier this year, as a victory.
“The UAE is very pleased that our understanding with the U.S. preserves all of the benefits of Open Skies for travelers, airlines, communities and aerospace companies in both countries and around the world,” Otaiba said.
He added Emirati carriers would still be “free to continue to add and adjust routes and services.”
On the other hand, the agreement states both the U.S. and UAE believe “that such government support in whatever form may adversely impact competition in providing international air transportation.”
We are extremely pleased that the UAE has finally admitted what we have said all along: that their government subsidies harm competition,” Scott Reed, a representative and strategist for the Partnership for Open and Fair Skies, which represents U.S. airlines, said
The deal is expected to be officially announced on Monday, when the Emirati foreign minister will arrive in Washington, D.C.
Despite the lack of an official announcement, many continue to be unsure of the true substance of the agreement. Shortly after, Reed stressed the nature of the deal as a victory for U.S. airlines, adding, “This agreement will freeze Emirates and Etihad Airways from adding additional direct flights from the United States to Europe and Asia.”
However, there is no such commitment. According to the various sources, the side letter signed by the two carriers only committed they currently have no plans to add any fifth-freedom flights to the U.S. However, the deal does not prevent Emirates and Etihad from opening up discussions for those routes in the future.
Additionally, Emirates and Etihad have already begun cutting capacity to the U.S., with Etihad leaving Dallas and San Francisco, among others, and Emirates pulling back on frequencies around the country. At the moment, neither carrier has announced intentions of launching any new routes, and given recent developments relating to their U.S. network, likely will not in the near future.
The other part of the agreement that could perhaps show results in the future is the requirement for financial disclosures from the two carriers. That would allow U.S. airlines, the government, and other bodies and organizations the ability to take a closer look at where the Emirati carriers get their money and whether any government subsidies have played or are playing roles in their growth today.
Even with the uncertainty that remains over the consequences of the deal, however, the agreement accomplishes large change. For years, airlines and organizations in the U.S. and the UAE have engaged in a large advertising campaign against one another. But with Friday’s deal, both sides left feeling victorious, and, as a result, that campaign should, at least for a time, come to an end.
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