UAE Rebuffs Open Skies Talks With the EU

 - January 16, 2019, 11:54 AM

The United Arab Emirates has made a last-minute U-turn on its intent to enter into talks with Brussels on concluding an EU-level comprehensive air transport agreement (CATA), claiming the European Commission’s draft text proposal lacked ambition and failed to offer more market access than what currently exits through the bilateral air transport agreements between the UAE and EU member countries.

In a letter to transport commissioner Violate Bulc, UAE minister of economy and chairman of the country’s General Civil Aviation Authority Sultan Bin Saaed Al Mansoori said the potential EU-UAE open skies would need to “provide for full and immediate liberalization going beyond what already exists—specifically including full and immediate liberalization of third-, fourth-, and fifth-freedom traffic rights.”

However, based on the draft text proposal it “now seems clear that our respective levels of ambition are very different and focus on very different elements” and the differences could not be overcome during negotiations, he said. “We therefore see no benefit in entering into comprehensive agreement negotiations.”

The letter, sent to Bulc on January 13, took DG Move, the Commission’s transport and mobility directorate-general, by surprise in regards to timing, content, and form, an official close to the talks told AIN. Al Mansoori had confirmed his government’s readiness to negotiate in May last year and a delegation of DG Move representatives and EU stakeholders was scheduled to travel to the Gulf state for a first round of negotiations on January 23-24. Bulc confirmed that the EU side was ready to come to Abu Dhabi on these dates in a letter to Al Mansouri—who had offered to host the first round of talks—on December 4. 

EU member states authorized the European Commission to open talks for a CATA with the Association of South East Asian Nations (ASEAN) states, Qatar, Turkey, and the UAE in June 2016. A mandate for open-skies talks with Armenia followed in December 2017 and a mandate for EU-level talks with Oman was granted in May 2018.

The proposed open skies with ASEAN is close to finalization. Also, talks with Qatar are progressing well, and negotiators are meeting for a fifth set of talks in Doha January 17-18. The UAE was slow to accept the EU invitation, reflecting the difference in approach of the country’s two main airlines, Emirates and Etihad. While the latter supported entering into EU-wide CATA talks, Emirates was more reluctant and argued that an EU-wide deal should go further than what exists today. The UAE has open-skies agreements with some 20 EU member countries. Some include fifth-freedom rights beyond Europe. Emirates, for instance, operates daily flights from Dubai to New York JFK with a stop in Milan Malpensa and to Newark with a stop in Athens.

The UAE government has followed the position of Emirates, the Gulf state’s largest airline, in its dealings with Europe, yet the request for immediate and unlimited fifth-freedom traffic rights beyond a 28-member state bloc seems contradictory to the agreement reached between the UAE and the U.S. in May last year. In a confidential side letter to the record of discussions, the UAE pledged there were no immediate plans to expand fifth-freedom routes by its airlines even though they have the right under the U.S.-UAE open skies to operate more fifth-freedom flights. U.S. majors, keen to protect the lucrative transatlantic market, and labor are irritated by Emirates’s flights to the U.S. from Dubai via Milan Malpensa and Athens.  

The UAE’s refusal to engage in EU-wide open skies talks marks a clear win for France and Germany. The countries, following on lobbying of their flag carriers Lufthansa and Air France-KLM, supported the Commission’s requested CATA mandate only after obtaining guarantees that Brussels would move forward with new and stricter legislation against unfair competition of non-EU third countries or their entities. While there will be no open skies on EU level, thus keeping an air services agreement under national control of member states, the new fair competition rules—better known as the revised 868—will come into force soon. It will give the European Commission more powers to act on complaints of member countries, airlines, and associations of alleged unfair practices by non-EU airlines. Lufthansa and Air France-KLM have always maintained that the three Gulf superconnectors—Emirates, Etihad Airways, and Qatar Airways—are heavily subsidized by their respective governments, charges that all three carriers deny.