The US and United Arab Emirates (UAE) are set to announce a deal that addresses longstanding concerns over alleged subsidies for Dubai-based Emirates Airline and Abu Dhabi-based Etihad Airways as well as fifth-freedom flying to the state.
Under the deal—which the AP reports was signed May 11 after months of talks and will be formally announced May 14—Emirates and Etihad will open their books to audits and issue annual financial statements. A similar agreement was struck with Qatar Airways earlier this year.
The two UAE carriers also signed a separate letter saying they do not plan any more fifth-freedom flying, such as the routes Emirates flies between New York and Athens and Milan before continuing to Dubai. The letter does not contain a commitment that no more fifth-freedom flights will be offered—it simply says none are planned, the report said.
While the deal has not been formally announced, several stakeholders offered their reaction to the apparent agreement.
“An abundance of healthy airlines—both domestic and international—are a critical component of American job, GDP and export growth,” US Travel Association president Roger Dow said. “We’re deeply appreciative that the administration engineered a deal which honors that principle and seems pleasing to all stakeholders.”
The Partnership for Open & Fair Skies called news of the agreement “a win for American jobs,” the organization’s Scott Reed said, adding the UAE has “finally admitted what we have said all along—its government subsidies harm competition.”
News of the deal signals and end to a multi-year row that pitted US carriers American Airlines, Delta Air Lines, and United Airlines, among others, against the Middle East carriers over the role of government financial support. The issue has received less attention in the last year or so as Emirates, Etihad, and Qatar have each battled myriad factors that have trimmed once eye-opening growth rates.
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