UAE & US Sign Airline Pact

United Arab Emirates, the home for Emirates and Etihad, and the United States have signed on Friday an agreement that requires more financial transparency from these two airlines while at the same time doesn’t curtail their current flights or fifth freedom activities. UAE merely stated that no more of fifth freedom flights are planned for now.

Etihad Airways

Both sides can tout this agreement as a victory. The US airlines were against these so called fifth freedom flights that Emirates has from Milan and Athens to New York. These fights are continuing services from Dubai. Emirates already publishes financial statements and Etihad will start once their restructuring is complete.

UAE made a statement to Reuters (access their here):

“The UAE is very pleased that our understanding with the US preserves all of the benefits of Open Skies for travelers, airlines, communities and aerospace companies in both countries and around the world,” Otaiba, the ambassador to the United States, said in a statement. “All the terms and provisions of the Air Transport Agreement including Fifth Freedom rights remain fully in place, with UAE and US airlines free to continue to add and adjust routes and services.”

Conclusion

The public announcement of this deal is apparently made on Monday. Basically, all UAE promised was to “freeze” the addition of fifth freedom routes that are relatively rare nowadays anyway.

It wasn’t that long time ago when Delta (inherited from Northwest) and United both had significant fifth freedom operations in Asia (they still have some).

None of these US airlines of United, Delta and America would be around unless they hadn’t gone through bankruptcy proceedings (several times) and slashed/offloaded obligations including employee pensions. Talk about subsidies….

It is definitely interesting to see Etihad’s audited financial statements that adhere to international standards once their restructuring is over (perhaps can take years). The airline has been downgrading its network since the restructuring started by dropping destinations left and right.

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