Reading press releases from American, Delta, and United, you would think that Emirates and Etihad agreed to abandon service to the United States. They actually agreed to very little. But in a face-saving move, U.S. carriers are celebrating.
Delta’s press release reads:
Trump administration secures agreement with UAE to enforce trade deals, protect American jobs.
Emirates and Etihad have agreed to use international accounting standards to make their books more transparent.
But Delta didn’t win.
The deal’s language was carefully crafted to allow both the Emirati airlines and the U.S. airlines to claim victory.
In its press release, Delta claims the UAE will not add any further Fifth Freedom flights:
The UAE has committed to a freeze on any additional “fifth freedom” passenger flights to the United States, which are flights coming from outside the UAE that carry passengers to the U.S.
But Emirates and Etihad never agreed to that. CNBC adds:
The U.S. airlines had sought a “freeze” — a binding commitment that they wouldn’t offer any more Fifth Freedom flights — from the Gulf airlines. Under the deal and side letter, the Emiratis do not explicitly promise never to add more such routes, but simply indicate none are planned.
This sort of duplicity is at the heart of this debate.
And end to subsidies? Delta says yes:
For the first time ever, the UAE acknowledged that government subsidies harm competition, a significant concession after years of denials.
But the agreement actually says:
…that such government support in whatever form may adversely impact competition in providing international air transportation.
And that’s not all:
The delegations stated that government support in whatever form — including policies, practices, and rules — is neither uncommon nor necessarily problematic in the global aviation sector.
Hardly a pledge to stop subsidies, is it? Subsidies are not illegal under Open Skies.
New Routes to India and Middle East on Delta?
Now that Deala has been “liberated”, CEO Ed Bastian has hinted that Delta will announce new service to the Middle East or Indian subcontinent in the coming weeks.
He claimed, “We’ve been hurt in India,” and added that both India and the Middle East are “ripe for our opportunity to fly.”
Delta now partners with Jet Airways and has made heavy investments in India. Any resumption of service to India would be predicated upon that build-up rather than a meaningless agreement with Emirates and Etihad.
If Delta resumes service now, it it not because of any change in behavior by the Gulf Airlines.
Like View from the Wing, I wonder what it would like like if airline executives told the truth. It’s hilarious yet pathetic to see the victory laps over a meaningless gentlemen’s agreement. Delta will restart service to the Middle East and Indian Subcontinent, like it always has, if it makes financial sense. At least the scapegoat has been taken away.