UAE, US airlines 'free to expand routes'

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Airlines in the UAE and US are free to add and adjust their routes and services, said a senior UAE official following the conclusion of talks between the two countries.

Yousef Al Otaiba, UAE Ambassador to the US, said that the all flight rights were retained while financial transparency was endorsed following the talks.

Dubai-based Emirates airline also welcomed the conclusion of informal technical discussions.

"Our understanding with the US preserves all of the benefits of open skies for travellers, airlines, communities and aerospace companies in both countries. All the terms and provisions of the Air Transport Agreement including Fifth Freedom rights remain fully in place, with the UAE and US airlines free to continue to add and adjust routes and services," Al Otaiba said in a statement after the conclusion of the talks.

"Airlines in both countries are free to continue to add, reduce or adjust flights and services consistent with the broad provisions of the 2002 ATA (Air Transport Agreement). These rights allow US and UAE airlines to operate services to the other via third counties," the statement said, adding that the US-based FedEx is the largest operator of services using Fifth Freedom rights, maintaining a regional hub in Dubai. Emirates airline currently operates two daily Fifth Freedom flights via Europe.

Saj Ahmad, chief analyst at London-based StrategicAero Research, said that while it's good that the UAE and US have found some common grounds on which to proceed and develop their open skies pact, it should be noted that from a compliance perspective, both Emirates and Etihad Airways have always published their financial results with full clarity and disclosure.

"Whether this appeases those US airlines that complained about GCC airlines remains to be seen; it's very unlikely that any US carrier will put their money where their mouth is to launch services from the US to the UAE."

He reaffirmed that Emirates and Etihad Airways cannot be blamed for that. "This is why the UAE carriers are flying to so many US cities to cater for demand and build networks. US airlines have failed to do the same and with them complaining, this approach can only be resolved if they bother to fly to the UAE. Right now, that doesn't look likely - and therefore, the status quo of Emirates and Etihad enjoying the spoils will continue and likewise, passengers will enjoy the most supreme value for money air travel quality that other airlines simply can never match," Ahmad said.

The US airlines alleged over the years that the UAE carriers received subsidies but the UAE airlines have vehemently rejected these accusations as baseless.

UAE airlines - Emirates and Etihad - currently serve 12 US gateways with 131 flights a week, generating billions of dollars into the US and UAE economies, supporting hundreds of thousands of jobs in both countries. Moreover, the UAE is the largest export market for the US in the Arab world, generating an annual $15.7 billion trade surplus for the US in 2017. The UAE airlines are also the largest non-US buyer of US commercial aircraft.

No freeze on operating rights

An Emirates airline spokesperson said that contrary to some media reports, there is no freeze on any of the operating rights prescribed in the Air Transport Agreement or any tacit undertakings to do so. The Record of Discussion also makes clear that the UAE and its designated carriers are, and have been at all times in full compliance with the agreement, and that there were never any violations of the agreement by UAE carriers.

The spokesperson noted that the Record of Discussion explicitly recognises Emirates' longstanding practice of publicly releasing audited financials in compliance with international standards, as well as engaging in arms-length market-based third party transactions, without recourse to government subsidies.

In addition, the UAE also raised concerns with certain US policies and practices that may adversely impact competition for international air services.