According to sources at the U.S. State Department, officials from the State of Qatar and its government-owned airline, Qatar Airways are set to agree to new and unprecedented financial reporting disclosures. The deal is expected to be announced later on Tuesday at a meeting on U.S.-Qatar relations in Washington.
This could be a significant move from Qatar, made in an attempt to appease vocal critics who accuse the likes of Qatar Airways of receiving government-backed subsidies that put U.S. businesses and jobs in jeopardy.
The Partnership for Open and Fair Skies has accused Qatar Airways, along with Emirates and Etihad Airways, who together make up the Big Three Middle East airlines – or ME3 – of receiving around $50 billion in what they call “illegal” subsidies. The lobby group is funded by the largest U.S. airlines, including Delta, United and American Airlines.
Back in December, we heard that representatives from both Qatar and the UAE – Where Emirates and Etihad are based – had met with U.S. State Department officials to discuss these widely publicised concerns. It was seen by some observers as the Trump Administration’s first intervention in the dispute
The meeting had apparently focused on the Open Skies agreement’s that the U.S. shares with Qatar and the UAE. These agreements allow airlines to fly freely to the U.S. and have been used to great effect by the ME3 – Together, the airlines operate around 200 services to and from the USA every week.
If the reports are true, it’s expected that Qatar Airways will start publishing audited financial reports within 12-months. And within 2-years, sources say Qatar will have to release details of any large financial transactions between the airline and government-backed companies.
According to sources cited by Reuters, U.S. negotiators have locked Qatar Airways into a deal to prevent the airline opening up any so-called ‘Fifth Freedom’ flights. These allow airlines to effectively create a stopover in a foreign country en-route to its final destination. For example, Emirates controversially opened up a fifth freedom flight between Athens and Newark last year and has flown between Milan and JFK for several years.
At the moment, there’s no word of any deal being reached between the U.S. and the UAE, although more talks are expected to be held over the coming weeks. If this is as far as U.S. officials are willing to go, then the ME3 have gotten off very lightly.
Opponents of the Gulf airlines have been demanding flight restrictions, similar to those implemented in Canada, which would limit the number of services the airlines to operate to the United States.
