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State Department Wins Key Victory In Qatar Airline Fight

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The State Department announced a partial victory in a long-running trade fight with Qatar over alleged violations of the Open Skies treaty.

Qatar agreed to operate with more financial transparency regarding its state-owned airline company Qatari Airways, and has agreed not to run indirect international flights that touch down in another country before continuing on to the U.S.

The decision signals a win in one of the largest ongoing trade battles. The Partnership for Open and Fair Skies, a coalition of American aviation companies including Delta Air Lines, United Airlines and American Airlines, have argued for years that Qatar violated the Open Skies agreement by pumping more than $25 billion into its flagship airline.

Qatar Airways “should issue public annual reports with financial statements audited externally,” the State Department said in a statement announcing the memorandum of understanding Secretary of State Rex Tillerson reached with Qatari delegates. Airlines in Qatar “should publicly disclose significant new transactions with state-owned enterprises and take steps to ensure that such transactions are based on commercial terms,” the memo said.

“The president has made this matter a priority, and the outcome we achieved will ensure a level playing field in the global aviation market,” Tillerson said Tuesday.

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Airlines and unions representing pilots and flight attendants praised the agreement as a good sign for transparency, and thanked President Donald Trump and the administration for reaching a deal.

“Today’s agreement by the State of Qatar is a strong first step in a process for commercial transparency and accountability, and we remain committed to working with the administration to address the harmful trade violations by the United Arab Emirates as well,” Ed Bastian, CEO of Delta, said in a statement.

“We are extremely appreciative of the president and his administration for their dogged determination to enforce U.S. trade agreements and stand up for American jobs,” American Airlines CEO Doug Parker said. “The administration’s actions today thoughtfully address the illegal subsidies received by Qatar Airways, and most importantly, support American workers and closer to home, American Airlines’ 120,000 team members.”

The Partnership for Open and Fair Skies said it will continue to work with the administration to ensure that Qatar lives up to its agreements.

Fair Skies also alleges that the United Arab Emirates have subsidized Emirates and Etihad Airways to the tune of $25 billion, but those airlines are not part of the current deal.

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