Economy

Qatar, EU close in on landmark Airline deal

Qatar and the European Union announced on Tuesday that they have almost completed an Open Skies Agreement, focused on transparency and fair business practices. The two parties are expected to the final sign the agreement after almost two years of negotiations. While raging dispute between the US carriers and itself, with other two major Gulf carriers, viz. The Fly Emirates and Etihad Airways continue to intensify, Qatar Airways has started to shift its focus to capitalize on European markets.

The announcement was made at the CAPA Qatar Aviation Aeropolitical and Regulatory Summit in Doha. CEO of Qatar Airways, Akbar al-Baker stated that the government-backed air-transport company had taken bold steps by agreeing to the stipulations of fair competition, social aspects, business practices, and transparency. He further added that Qatar was committed to offering a fair and friendly business environment which will enable European airlines to enjoy unrestricted commercial opportunities in an unprecedented manner.

Although exact details are not known, the air services agreement is likely to include articles for fair competition, transparency, environment, and consumer protection. In an official statement, Qatar Airways declared that all air carriers from 28 member countries of the European Union and Qatar will now have uninterrupted and unrestricted access to mutual territories. EU representative and the European Commission Director General for Mobility and Transport, Henrik Hololei stated in his Summit address that the agreement would play a vital role in ensuring open and fair markets, and claimed that the two parties had found common ground to overcome differences.

Similar to Emirates and Etihad, Qatar Airways has been accused of unfair trade practices as the government was allegedly subsidizing it. This is said to have given the gulf airlines giant advantage over other carriers, though Qatar Airways has maintained denial on such accusations. The agreement will also ensure that Qatar no longer force its European competitors to have a local sales agent to conduct flights from Doha

The talk flourished after an offensive lobbying campaign by a few US-based big industry players, requesting the US government to challenge the three major Gulf carriers under “Open Skies” agreement. Consequently, in January 2018, Qatar reached a deal with the US, modifying the existing Open Skies agreement between the two countries. Bounded by the deal, Qatar had pledged to maintain transparency and to disclose detailed financial information about Qatar Airways.

While the tussle with the US was focused mainly on “Fifth Freedom” flights by Qatar Airways, reiterating that it would not launch any such flights, the one with the EU was targeted to achieve transparency and business freedom. Hololei added that talks for similar negotiations with Oman should begin in March this year. However, the United Arab Emirates has declined to engage in negotiations.

Qatar Airways will now be operating only on the direct routes between Qatar and the US, completely avoiding the transatlantic route via Europe. On a positive note, the major gulf airline announced yesterday that it would start a double direct flight between Edinburgh and the Middle East for the busy summer season.

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