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US Government set to finalize agreement with Qatar to ease “Open Skies” conflict

The United States government has relayed to US carriers that Secretary of State, Rex Tillerson, would be finalizing an agreement with Qatar wherein state-owned Qatar Airways would pledge to be more transparent with its financial records, and declared that it holds no plans to operate fifth freedom flights to the US.

The upcoming accord comes after the State Department told US airlines in December that it wouldn’t revisit negotiations regarding Open Skies agreements with the United Arab Emirates (UAE) and Qatar. Rather, it would engage the Gulf countries in talks over so-called subsidies to Gulf airlines.

US major airlines American Airlines, Delta Air Lines and United Airlines have long claimed that billions of dollars in state subsidies provided to Emirates Airline, Etihad Airways and Qatar Airways have placed them at a disadvantage and violated the US’ Open Skies agreements with the two countries.

American, Delta and United have expressed their appreciation for the anticipated agreement between the US and Qatar.

“This landmark action will help create a level and fair playing field for American Airlines and other US carriers,” said American Chairman and CEO Doug Parker in a statement.

Parker added:

“The [Trump] administration’s actions today thoughtfully address the illegal subsidies received by Qatar Airways, and most importantly, support [US] workers.”

Though the agreement is not expected to be at the same level of a binding treaty and would not formally change the existing US-Qatar Open Skies agreement, American, Delta and United see the move as a political commitment by the Qatari government to the US government.

Qatar is expected to pledge that Qatar Airways would indeed comply with internationally accepted accounting and auditing standards when reporting financial results. It is also expected to conduct all transactions on generally accepted commercial terms.

In addition, Qatar Airways would also say it has no plans to operate fifth freedom flights to the US.

A high-level Qatari delegation is currently in Washington for a “strategic dialogue” with the State Department and other US government departments.

The issue of US major airlines’ complaints about claimed subsidies to Qatar Airways is expected to be one the topics that would be tackled in a meeting with Tillerson.

The Qatari government stated that “a number of agreements, MOUs and letters of intent” between the two governments would be inked this week.

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