No restrictions on expanding US operations, says Emirates

UAE and US carriers both claim victory in flight rights dispute
By Shayan Shakeel
Mon 14 May 2018 02:03 PM

Emirates chairman and CEO has insisted that it can expand its operations from the UAE to the US, despite claims from the US ‘big three’ that there is a “freeze” on any further flights being added.

Following recent discussions on civil aviation between the UAE and United States, both countries reaffirmed on Saturday the 2002 UAE-US Air Transport Agreement (ATA) and the fundamental principles of Open Skies.

“All the terms and provisions of the Air Transport Agreement including Fifth Freedom rights remain fully in place, with UAE and US airlines free to continue to add and adjust routes and services,” said UAE Ambassador to the US Yousef Al Otaiba, following the announcement over the weekend.

Speaking to media last week ahead of the agreement Sheikh Ahmed, CEO and chairman of Emirates, insisted that it could expand its US operations.

“Under the bilateral we can,” said Sheikh Ahmed, in response to a question from Arabian Business last week.  “But we won’t expand for no reason.”

“Emirates is not subsidised and that is why we continue to make profits,” he said.

“I don’t care what the others do, I care what I am doing to sustain the company and sustain the business. If there is demand, we will.”

In addition, following the announcement on Saturday, an Emirates spokesperson said the agreement fully preserves Open Skies as per the existing Air Transport Agreement between the US and the UAE, “guaranteeing complete commercial flexibility that benefits consumers, communities, and the economies of both countries”.

“Contrary to some media reports, there is no freeze on any of the operating rights prescribed in the Air Transport Agreement or any tacit undertakings to do so. The Record of Discussion also makes clear that the UAE and its designated carriers are, and have been at all times in full compliance with the agreement, and that there were never any violations of the agreement by UAE carriers,” the spokesperson said.

This comes following claims by the big-three US carriers – through its lobbying body Partnership for Open and Fair Skies – that agreement has imposed a freeze on any future expansion plans.

Scott Reed, campaign manager for the Partnership for Open and Fair Skies, said, “This agreement will freeze Emirates and Etihad Airways from adding additional direct flights from the United States to Europe and Asia.”

‘UAE airlines are the winners’

From a compliance perspective, both Emirates and Etihad have always published their financial results with full clarity and disclose, said Saj Ahmad, chief analyst at StrategicAero Research.

“It’s very unlikely that any US carrier will put their money where their mouth is to launch services from the US to the UAE. Further, this agreement does not prevent Emirates or Etihad from continuing to launch flights from other countries – such as Emirates US flights from Italy and Greece,” he said.

The fifth freedom flight rights were a core bone of contention against Gulf Airlines by the US carriers. However, with the agreement’s language dithering over whether those have been curbed, “You have to ask, after all these years, just what exactly have US airlines actually gained?” he said.

“If we had to summarise, it’s pretty evident that the UAE airlines are the winners here. They conceded nothing and the US airlines who lodged complaints saw their concerns pretty much cast aside,” he added.

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