Global Airlines

The US-UAE Open Skies Agreement is an agreement set up to enforce the right for airliners to offer international flights and cargo operations. This agreement continues the separation between governments and the aviation industry so that routes, flight capacity, and fares will be decide by the companies, and not by the hands of the government.. 

The agreement was put in place in 1992, and since then over 120 foreign partners have joined.

The agreement consists of rules and right the air carriers have to follow:

"1. Each Party grants to the other Party the following rights for the conduct of international air transportation by the airlines of the other Party:

a. the right to fly across its territory without landing;

b. the right to make stops in its territory for non-traffic purposes;

c. the right to perform international air transportation between points on the following routes:

(i) for airlines of the United States, from points behind the United States via the United States and intermediate points to any point or points in [country] and beyond; [and for all-cargo service, between [country] and any point or points;]

(ii) for airlines of [country], from points behind [country] via [country] and intermediate points to any point or points in the United States and beyond; [and for all-cargo service, between the United States and any point or points;] and

d. the rights otherwise specified in this Agreement.

2. Each airline of a Party may, on any or all flights and at its option:

a. operate flights in either or both directions;

b. combine different flight numbers within one aircraft operation;

c. serve behind, intermediate, and beyond points and points in the territories of the Parties in any combination and in any order;

d. omit stops at any point or points;

e. transfer traffic from any of its aircraft to any of its other aircraft at any point;

f. serve points behind any point in its territory with or without change of aircraft or flight number and hold out and advertise such services to the public as through services;

g. make stopovers at any points whether within or outside the territory of either Party;

h. carry transit traffic through the other Party’s territory; and

i. combine traffic on the same aircraft regardless of where such traffic originates;Current Model Open (Skies Agreement Text)

Two long haul airline companies that are apart of this agreement and receive government subsidies are Emirates and Qutar Airways. They have both agreed with the open skies agreement which they said that they wouldn't allow their governments to artificially lower fares as a result of government subsidies. Companies such as Delta, American Airlines, and members of congress have brought this matter to the attention of the trump administration. (Correll, D. S., & Krupa)

American companies are also not with clean hands in this matter. "In 2014, some $865 million in subsidies went to China Eastern and China Southern, both of which partner with Delta. $162 million went to Air China, a United Airlines ally, and $82 million to Hainan Airlines that code-shares with Dallas-based American Airlines" (Flows, C)

Another pice of news to stir the pot more is the fact that The Export- Import Bank allows for other countries, who have limited or no access to funds, to purchase an aircraft such as boeing for a lower interest rate then the normal market receives. This does not apply to US companies and allows for international companies to make purchases and increase their fleet using "below market interest rates"

Now to discuss if the playing grounds are fair for everyone involved. To start, the first thing thats not fair is that companies, who agreed to the terms of the conditions of the open skies agreement, are not abiding by what they agreed upon. Is there a repercussion for doing this? The companies who are getting subsidies from their government are doing it so the companies can make it off the ground and make cheaper routes for their customers. Is it fair to get money from your government to make flights cheaper for the individuals and still allow the company to make a profit? 

In competitions, its best to make things as fair as possible for everyone involved, but we are talking about different nations, with different levels of available funds, and different ideology on how things should be done. If the nation agreed to the set rules listed out in the agreement, then they should be held accountable and have some repercussion for defying it. Also, the offer by the bank to sell aircrafts to companies, at lower interest rates then the market value, brings in more business to airbus and boeing. This creates a better market for the US, increasing sales in different companies, and keeps jobs in business. Anything that makes one person money but also hurts another companies is going to be seen as unfair, but to what level is the real question.

Yes this does hurt the operations such as delta because they have to pay more then companies that they are going head to head with. So in all honesty, I believe this is slightly unfair if they are under the open skies agreement. But for everything else, it's not unfair.

Correll, D. S., & Krupa, C. (2017, December 02). US airlines at odds over aviation agreements with Qatar and UAE. Retrieved March 19, 2018, from https://www.washingtonexaminer.com/us-airlines-at-odds-over-aviation-agreements-with-qatar-and-uae

Current Model Open Skies Agreement Text. (2012, January 12). Retrieved March 19, 2018, from https://www.state.gov/e/eb/rls/othr/ata/114866.htm

Flows, C. (2016, November 17). Government Airline Subsidies... So What? Retrieved March 19, 2018, from https://www.forbes.com/sites/realspin/2016/11/17/government-airline-subsidies-so-what/