US Close to a Deal with UAE Over Air Subsidies

Apr 13, 2018

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A spat between the US and the United Arab Emirates over air subsidies that has lasted years might finally be coming to a close, several sources tell the Associated Press.

The dispute started when major US airlines accused Dubai-based Emirates and Abu Dubai-based Etihad Airways of obscuring billions of dollars’ worth of subsidies they’ve received from their governments. Sources say the new deal will mean both airlines open up their financial statements, and both airlines would also state to the US that neither of them have plans to operate additional routes to the US from destinations outside of the UAE.

Those routes, known as fifth freedom flights, are a major point of contention for the three major US airlines — Delta, United and American — that claim the practice undercuts their profits for the same flights.

Insiders say the new agreement will closely follow a similar deal that was reached between the US and Qatar Airways in January. That deal settled a long and sometimes brutal dispute that similarly accused the Doha-based airline of competing unfairly with state-based aid, and it meant Qatar Airways would use more transparency in its financial dealings.

Delta, United and American have all spent significant time and money pressuring several presidential administrations to take action in the matter. The new agreement has not yet been finalized or implemented. The State Department, which is overseeing the negotiations, told AP that “discussions are ongoing” but did not give any further details on a potential agreement.

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