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United States planning talks with Qatar and UAE on airline subsidies

The United States State Department is gearing up for talks with Qatar and the United Arab Emirates regarding allegations that they have been providing subsidies amounting to billions of dollars to their state-backed airlines.

The Trump administration will be looking to secure commitments on financial transparency, said sources that had knowledge about the proceedings.

The meetings are set to commence as early as this week. US airlines have long harped on the alleged unfair subsidies that Qatar Airways Ltd., Emirates and Etihad Airways PJSC receive.

The State Department will also probe about the Middle Eastern airlines’ plans for “fifth freedom” flights, which start in an airline’s home country and conclude in a different nation before moving on to the U.S.,

The sources disclosed that U.S. officials would ask the Persian Gulf countries to keep an arm’s-length approach toward their carriers.

Government-to-government discussions would mark an invigorated focus on the airline trade spat, which has been going on back and forth for several years now.

Earlier this year, President Donald Trump announced that the Persian Gulf carriers received huge government subsidies. He however, did not mention any action that he might even consider.

The Obama administration had “informal, technical” discussions with representatives of Qatar and the U.A.E. late last year but that too did not result in any action.

The Gulf carriers “are harming American jobs and the U.S. aviation industry and we appreciate that the administration is acting to resolve these issues with the governments of the U.A.E and Qatar,” said the Partnership for Open and Fair Skies, which embodies Delta Air Lines Inc., United Continental Holdings Inc., American Airlines Group Inc. and other airline unions.

The U.S. Travel Association said the dialogues would be observed outside of formal “open skies” agreements.

“The Big Three U.S. airlines’ core demand – that the administration halt flights by airlines flagged in Qatar and the U.A.E, and renegotiate U.S. open skies agreements with those countries – was, thankfully, set aside because their arguments fell well short of the mark,” said U.S. Travel Chief Executive Officer Roger Dow.

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