Qatar agrees to transparency to resolve U.S. airline dispute

Marsha Scott
February 2, 2018

The accord announced today operates within the existing open skies framework between Qatar and the U.S., the US State Department says.

Qatar Airways declined to comment.

The United States and Qatar on Tuesday inked a deal to resolve a years-old quarrel over alleged airline subsidies, as Qatar's government works to defuse tensions with the Trump administration.

Qatar is home to a major US military base that is key to the fight against the Islamic State in Iraq and Syria and Mattis said that "a united GCC bolsters our effectiveness on many fronts".

Under the US-Qatar agreement unveiled on Tuesday, Qatar Airways is bound to issue financial statements in the coming year that are audited in accordance with internationally recognised accounting standards. Tillerson had dealings with Qatar when he headed Exxon Mobil Corp. US airlines say the company receives billions of dollars in government payments that leave them at a competitive disadvantage.

A coalition representing the largest USA carriers - American Airlines Group Inc, Delta Air Lines Inc and United Continental Holdings Inc - praised the State Department announcement as a victory for the domestic industry, following years of lobbying the federal government to take a tougher stance against the three Gulf carriers for what they say were illegal state subsidies. The Gulf carriers have always denied the accusation. Qatar also made a loose commitment that the flag carrier won't launch flights to the United States from Europe or other non-Qatari cities, creating yet more competition for the US airlines.

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"This is a way for the Trump administration to draw a line under this dispute and give the Big 3 a big nothing-burger", said John Byerly, a former State Department official who negotiated Open Skies agreements.

Oscar Munoz, chief executive of United, adds in his own statement: "We applaud this agreement and thank the administration for effectively representing the interests of the American aviation industry". But the UAE is in a diplomatic standoff with Qatar, so there's no reason to believe that where Qatar goes, so will the UAE. Within two years, Qatar is expected to also disclose significant new transactions with other state-owned enterprises and "take steps to ensure that such transactions are based on commercial terms".

Qatar's reported pledge on transparency comes as it bolsters its economic defenses against a boycott by the UAE and other countries in the Gulf.

Qatar Airways (QA), the national carrier of the State of Qatar, celebrated the launching of the new destination, which is the fifth route to the Southeast Asian country and the first new route launch for the carrier in 2018.

The side-letter only says there are no current plans to operate such service.

But other airlines and travel groups had criticized the three largest US airlines for lobbying against more flights between Qatar and merely trying to reduce competition on lucrative European routes. That's short of a binding guarantee. The administrations actions today thoughtfully address the illegal subsidies received by Qatar Airways, and most importantly, support American workers and closer to home, American Airlines 120,000 team members.”. There's also no commitment Qatar Airways won't expand its offering of Qatar-U.S. flights. While Emirates has found great success in routes from Milan and Athens, among others, to the U.S., Qatar has not announced intentions to launch any such route, instead choosing to focus on growing their super hub out of Hamad International Airport in Doha. Emirates Airline now offers "Fifth Freedom" flights in which passengers can fly from New York-area airports to Milan, Italy or Athens without ever setting foot in the UAE. The State Department said it is "maintaining the Open Skies framework, which continues to yield real benefits for US airlines, airports, labor, the travel industry and consumers, among others". We look forward to the State Department closely monitoring the implementation of this agreement and we will continue to contest Emirates and Etihad Airways unfair and anti-competitive practices.

Other reports by MaliBehiribAe

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