In 2002 the US and UAE agreed to allow carriers unrestricted flight rights into either country. Since then the agreement has been continually called into question by the big three US carriers, United, American and Delta, who claim that airlines from the Gulf, including Emirates and Etihad, were able to grow rapidly thanks to government subsidies that violated terms of the agreement.
Both the UAE’s biggest carriers have always vehemently denied the allegation. However, a series of travel-related restrictions levied against Middle Eastern airlines last year by the US government, including the infamous laptop ban, brought forward a sense of urgency that the open skies debate needed to be resolved.
And that resolution, of sorts, happened last week when the US and UAE announced the conclusion of negotiations over whether Emirates and Etihad could continue to fly into America, as outlined in the Open Skies accord signed 16 years ago. Through their lobbying body, the Partnership for Open and Fair Skies, the US carriers toasted “a win for American jobs” saying, “The UAE has finally admitted what we have said all along – its government subsidies harm competition.
Unfortunately, not everyone was on the same page as to what exactly that means. Emirates also sent out a statement, saying the new deal “explicitly recognises Emirates’ longstanding practice of publicly releasing audited financials…, as well as engaging in arms-length market-based third party transactions, without recourse to government subsidies.”
In this edition Inside AB, Jeremy Lawrence and Shayan Shakheel take another look at the details to see whether it was a storm in a teacup of serious impediment to growth for the aviation industry.
(Source: Arabianbusiness.com YouTube channel)