Mubasher: The UAE is reportedly planning to provide better financial transparency when it comes to its government-owned airlines.
The agreement comes after a dispute arose when US airlines accused their UAE counterparts of getting billions of dollars in government subsidies and funding, straining competition.
The deal will likely resolve the row with the US government and airlines operating in the country.
Although government support for airlines is not “unusual”, the two countries agreed that it may “adversely impact competition,” Bloomberg News reported, citing an agreement between the two countries.
The UAE, which is home to two carriers, namely Etihad Airways and Emirates, also announced that it was committed to issuing public annual financial reports under internationally recognized accounting standards.
“While the agreement doesn’t freeze so-called fifth freedom flights, the UAE pledged that its carriers have no plans for additional such routes,” Bloomberg reported, citing a senior State Department official as saying.
Fifth freedom flights are those that take place outside the carrier’s home country. For example, a flight between Athens and New Jersey by Emirates is a fifth freedom flight.
The UAE-US agreement is the “final piece of a long-running dispute over government aid,” Bloomberg said. It added that a similar issue occurred between the US and Qatar, but that had been resolved earlier this year.
In 2015, US-based American Airlines Group, Delta Air Lines, and United Continental alleged that Gulf carriers were able to compete unfairly on flights into the US because of government subsidies they received.
US secretary of state Mike Pompeo is projected to reveal the agreement on 14 May, informed sources told Bloomberg.
