Etihad set to appeal against codeshare decision with airberlin

When Etihad was encouraged by both regional and national German governmental representatives to invest in a 29.2% stake in airberlin back in 2011, it did so with 63 codeshare agreements in place with the German airline. However, predominantly after intense lobbying from airberlin’s chief rival and Germany’s largest airline, Lufthansa, 29 of those codeshare agreements have been revoked with effect from 16th January 2016 and this will remain effective until the end of the current IATA winter schedule on March 30th, 2016.
The reason given for the revocation of these particular codeshare agreements is that they are not covered by the current air traffic rights agreement between Germany and the United Arab Emirates. However, Etihad also made it clear that codeshare services to international destinations that have been in existence for many years without any raising of eyebrows were being raised as pro-competitive. According to Etihad’s CEO and president, James Hogan, “That was entirely correct, given that they meet the terms of the air services agreement between Germany and the UAE—a fact confirmed not just by our own legal team and expert advisors but by a former Director General of Civil Aviation for Germany.”
Meanwhile, Airberlin CEO, Stefan Pichler, said separately that: “We are appealing against this decision because it does not serve the best interests of the traveling public. Indeed, the main beneficiary of the decision is Lufthansa. Airberlin is Lufthansa’s sole competitor in the German domestic market. We keep the competition honest, strong and effective, as otherwise Lufthansa would have a monopoly which would be disastrous for German consumers.”
Hogan said that despite four years of investing in Germany and supporting jobs with airberlin, “We find the rules have changed. As a global business, we focus our investments in markets which will deliver long-term returns. We were encouraged to invest in airberlin.” Hogan added that subsequent to Etihad’s investment in airberlin they have had to face a number of significant challenges, including the introduction of airport taxes, which have negatively affected the airline’s profitability.
According to Hogan, “Unless the German government can show its commitment to support all German companies and German jobs, its reputation as a safe country in which to invest is at stake. Investors need every reassurance that the integrity of their investments in Germany will be respected and protected.”