US told open skies policy crucial for jobs and trade ties

The UAE ambassador to the US, Yousef Al Otaiba, told the US that the open skies policy is needed to preserve jobs and trade amid accusations of unfair competition from Gulf airlines.

Last month, Emirates said it was still deciding between the Boeing 787 and Airbus A350 for an order of 50 to 70 twin-aisle aircraft. EPA

The US needs its open skies policy to preserve jobs and trade ties with this region despite efforts by its aviation industry to curb competition from Arabian Gulf airlines, the UAE ambassador to the US said on Wednesday.

US carriers have urged regulators to address the issue of what they call unfair competition from Emirates Airline, Etihad Airways and Qatar Airways.

They are calling for the reversal of open skies policies with the UAE and other Gulf countries alleging that their airlines receive subsidies from their governments – an accusation that has been strongly denied by the three Gulf carriers.

“The UAE is the largest international buyer of US commercial aircraft in the world,” said Yousef Al Otaiba in a video-link address to an American Chamber of Commerce Mena conference in Abu Dhabi yesterday. “That’s a lot of US jobs directly linked to open skies and open trade policies.”

US exports to the UAE, which reached $22 billion last year, could suffer from any potential change in open skies policies.

American business should engage on this issue because the growth of Gulf aviation has been “good for business”, Mr Al Otaiba said.

“But it’s not only the US jobs that are at stake. Open skies has created millions of jobs in the Middle East. There are also millions of jobs in tourism and hospitality logistics and construction, manufacturing and services that have been enabled by open skies and other open trade policies,” he said.

The US plane manufacturer Boeing beat its European rival Airbus in net new airplane orders and deliveries in the first quarter, according to figures released on Tuesday.

After adjusting for cancellations and conversions between different models, Airbus slipped behind Boeing with net orders for 101 aircraft as opposed to 110 for Boeing.

Last month, Emirates said it was still deciding between the Boeing 787 and Airbus A350 for an order of 50 to 70 twin-aisle aircraft.

Gulf carriers account for 30 per cent of Boeing’s total wide-bodied backlog orders, according to the firm.

In Boeing’s 2014-33 forecast for the global aviation industry, the Middle East region will need 2,950 aircraft worth $640bn.

US airlines had prepared a 55-page document, which they released in late January, detailing allegations of unfair government subsidy and other financial incentives that they claim were in breach of open skies agreements.

Last month Etihad’s chief executive James Hogan and Tim Clark, the Emirates president, were in Washington to hit back at the claims made against them by Delta, United and American airlines, and their trade unions in the US.

“American airlines should stop complaining and start competing,” said Danny Sebright, president of the US UAE Business Council.

The European Commission also stepped into the spat last month.

During a meeting of transport ministers from the European Union, the French and German representatives asked the EC to address the subject of government subsidies during discussions over a commercial aviation agreement with the Gulf this year.

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