US and UAE reach Open Skies deal

13 May 2018
UAE agreed to regularly provide detailed financial information on Emirates Airline and Etihad Airways

The US and UAE have agreed on 10 May to resolve the years-long Open Skies dispute arising from claims made by major US carriers that Dubai-based Emirates Airline and Abu Dhabi’s Etihad Airways received unfair government subsidies.

The “voluntary” agreement covers the UAE airlines providing detailed financial information,” according to UK-based news agency Reuters citing the US State Department.

A side letter to the agreement also states that the UAE carriers currently have no plans to add additional “fifth freedom" flights.

Fifth freedom allows an airline to carry passengers between foreign countries as a part of services to and from its home country.

“We have reached a mutually agreeable conclusion to this issue that has gone on for several years now,” a senior State Department official said, citing an increased financial transparency from both airlines will provide a leveling of playing field for the US stakeholders.

MEED understands the UAE agreed to “ensure financial transparency,” including issuing regular financial statements once the ongoing restructuring at Etihad Airways is completed.

Part of the agreement also calls for the UAE to ensure that the airlines’ transactions with government-owned entities are conducted on commercial terms.

The disclosures could help US carriers make the case that either airline is potentially getting unfair government subsidies, the report said.

The two UAE airlines, along with Qatar Airways, have strongly denied receiving unfair subsidies from their home governments.



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