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ATW Editor's Blog

The Open Skies ‘big deal’ that isn’t


American, Delta and United still have little to show for the millions of dollars they’ve spent on publicity campaigns and legal work aimed at curtailing the growth of Emirates, Etihad and Qatar Airways.

While the US airline CEOs and ALPA have issued press statements akin to victory claims, the reality is that the new US-Qatar “understandings on civil aviation” pact, announced today by US secretary of state Rex Tillerson, changes nothing about the Open Skies agreement between the two countries or Qatar Airways’ operations to the US.

To summarize, in return for not renegotiating the Open Skies deal, the Qatari government has agreed that Qatar Airways will release an audited financial statement within a year and assured Washington that the Doha-based airline has “no current plans” to operate fifth freedom flights to the US.

How useful that audited statement will be to the US carriers is anybody’s guess, but there seems to be a wide margin for interpretation of how to deliver that concession. And Qatar Airways does not operate fifth freedom flights to the US (although it could do so under the Open Skies agreement, if it wished), so nothing changes there and the Qatari government’s assurance on this is even vaguer than the financial transparency pledge.

Tillerson’s statement was also cloaked in diplomatic assurances, emphasizing that Qatar was “a strong partner and a longtime friend of the United States”, with whom the US is keen to deepen its strategic ties and cooperation in areas that include trade, security and counterterrorism.

The most important part of today’s statement, however, is what wasn’t mentioned: the UAE, Emirates and Etihad. The US is apparently hopeful of reaching the same type of amicable handshake with the UAE, which is unquestionably as important a strategic partner as Qatar. 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. Even more problematic, Emirates does operate fifth freedom flights—via Italy and Greece—to the US. Would a US “civil aviation understanding” with the UAE require Emirates to give those up?

Even if the UAE and Emirates were to make such a concession, would they do so while still permitting US cargo carriers to operate fifth freedom flights out of Dubai?

But let’s hypothesize that an agreement is forged with the UAE similar to Qatar’s. What, in reality, have American, United and Delta achieved for their money? The Open Skies agreements will remain intact (a good thing, in this editor’s view); the Gulf carriers will maintain their current direct schedules to the US; and, if they wish and if slots are available, those airlines can continue to expand their US destination networks.

Meanwhile, the consolidated US majors will continue to control some 80% of the US domestic market—into which foreign carriers, including the Gulf carriers, cannot venture because of US cabotage laws—and will maintain their dominant, anti-trust protected positions in the transatlantic market with their European partners, Air France-KLM, British Airways, Lufthansa and Virgin Atlantic.

Three years on, with millions of dollars and a lot of rhetoric spent, American, Delta and United seem to have achieved only one thing: securing the status quo.

Karen Walker karen.walker@informa.com     

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