Though all sides are claiming victory, an agreement signed
Friday by the U.S. and the United Arab Emirates (UAE) has no restrictions
on U.S. flights for Emirates and Etihad.
The Record of Discussion document, which secretary of state
Mike Pompeo and the State Department commented on publicly for the first time
Monday, is the latest, and perhaps the last, salvo in the dispute over
government subsidies and unfettered air access that Delta, American and United have
waged against Emirates, Etihad and Qatar for more than three years.
The document does include language that requires airlines
from the U.S. and UAE to produce audited financial statements that meet
internationally recognized standards at least annually. It asserts that
Emirates and U.S. airlines already issue such reports. Etihad will begin issuing such reports at least annually once it completes a
restructuring that is underway.
However, the Record of Discussion makes no mention of
flights operated by Emirates that depart from the UAE, make stops in a second
nation, and then continue on to the United States. Emirates currently operates
two such routes, known in industry parlance as "Fifth Freedom" flights, with one
going from Dubai to Athens to Newark and the other going from Dubai to Milan to
The Big 3 U.S. carriers assert that the major Gulf carriers
have accepted more than $50 billion in state subsidies since 2004, violating
the bilateral Open Skies aviation agreements that the U.S. has with Qatar and
the UAE. In their campaign, the Big 3 and U.S. labor unions initially asked the
U.S. government to put a freeze on all new U.S. routes by the Gulf carries
until such subsidies were addressed. But more recently, they have scaled back
their demands to ask only for a freeze on Fifth Freedom routes.
In an email Monday, State Department spokeswoman Farahn
Morgan said that the UAE had informed the department that Emirates and Etihad "have
no current plans to make changes to the Fifth Freedom services that they
operate to the United States."
But in its own statement on Friday, the UAE Embassy in
Washington noted that cargo carrier FedEx maintains a Dubai base and
operates the most Fifth Freedom routes under the UAE-U.S. aviation agreement.
"All current and future rights for both countries'
carriers to fly all flights, including fifth freedom flights, remain in place
as an outcome of the discussions," the embassy said. "Airlines in both countries are free to
continue to add, reduce or adjust flights and services consistent with the
broad provisions of the 2002 (air transport agreement)."
The lobbying group U.S. Airlines for Open Skies (composed of
FedEx, cargo carrier Atlas Air, Hawaiian and JetBlue) has fought the Big 3 on
this issue, and it claimed victory in a statement Monday.
"This resolution is a clear victory for American
workers, travelers and exporters, and reaffirms the U.S. commitment to open
skies," the group said. "We commend the Trump administration for its
thoughtful approach and unwavering commitment to resolve this matter in a way
that fully protects the rights of each party under the agreement."
Despite the words of the UAE embassy and the State
Department, the lobbying group for the Big 3 and the U.S. unions asserted that the
UAE has committed to a "freeze" on any additional Fifth Freedom
passenger flights to the U.S.
The group, called the Partnership for Open & Fair Skies,
also said the deal would put an end to UAE subsidies of Emirates and Etihad.
"For the first time ever, the UAE acknowledged that
government subsidies harm competition, a significant concession after years of
denials," the group said.
In addition, the agreement will require Emirates and Etihad
to pay their share to operate out of their international airports, said the
Partnership for Open & Fair Skies.
"Until now, improvements to Emirates and Etihad Airways'
airport terminals in Abu Dhabi and Dubai have been subsidized by the UAE
government," the Partnership said.
The Trump administration entered into a similar agreement
with the Qatar government in January.