Qatar Airways has agreed to abide by internationally recognized accounting and auditing standards and to refrain from introducing new fifth-freedom passenger flights to the U.S. as part of a deal with the Trump Administration to continue flying to the country under the Qatar-U.S. Open Skies pact. The sides announced the deal during a so-called strategic dialogue held between U.S. secretary of state Rex Tillerson and Qatar foreign minister Mohammed Al Thani in Washington, D.C.
The agreement calls for airlines to issue public annual reports with externally audited financial statements and publicly disclose “significant” new transactions with state-owned enterprises and take steps to ensure that they base those transactions on commercial terms within two years. Officials plan to meet again in one year to discuss progress.
The deal comes after a group of U.S. airlines renewed pressure on their government following the election of Donald Trump to the presidency to scrap the open skies agreements with Qatar and the United Arab Emirates, whose two state-owned carriers—Emirates Airline and Etihad Airways—have yet to make a similar commitment.
The dispute between the Middle East carriers and the U.S. airlines—represented by the Partnership for Open and Fair Skies lobbying group—dates to 2015, when American, United, and Delta Air Lines called on the administration of then President Barack Obama to modify or end Open Skies trade agreements the U.S. negotiated with Qatar and the UAE between 1999 and 2002. But when the Obama Administration failed to act on the group’s behalf, the airlines and their lobbyists took their complaints to the Trump Administration, which they hoped would prove more receptive.
Still, not all U.S. airlines sided with the so-called Big Three. Perhaps most notably, cargo carriers UPS and FedEx saw the effort to renege on the Open Skies pact as dangerously protectionist, while JetBlue CEO Robin Hayes railed against the “startling” concentration of power American, United, and Delta have accumulated in the process of consolidation. He also characterized the complaints of the three U.S. legacy carriers about the Gulf carriers’ subsidies as “a perfect illustration of how we see megacarriers trying to use their muscle and deep pockets to limit competition.”
In response, the Partnership for Open and Fair Skies charged JetBlue with showing more concern for its own code-share agreement with Emirates than upholding the spirit of international agreements. As if to drive home that point, American Airlines in late June announced its intention to sever its code-share ties with Etihad and Qatar effective this March, prompting Etihad to close its Abu Dhabi-Dallas/Fort Worth (DFW) route effective March 25 and study several other “adjustments” to its U.S. network.
As expected, Tuesday’s agreement between the Trump Administration and Qatar drew praise from American and its allies in the dispute.
“Today’s landmark action will help create a level and fair playing field for American Airlines and other U.S. carriers,” said American Airlines CEO Doug Parker. “We are extremely appreciative of the president and his administration for their dogged determination to enforce U.S. trade agreements and stand up for American jobs.”