Etihad launches appeal after German court's airberlin codeshare ruling

United Arab Emirates (UAE) carrier, Etihad Airways has launched fresh legal action in a bid to overturn a German court’s decision to revoke the approval for almost two thirds of its codeshare flights with airberlin. Last week, the Administrative Court of Braunschweig decided that the German Ministry of Transport was entitled to reject 29 Etihad Airways - airberlin codeshares in a ruling made earlier in the year.

Etihad, a minority shareholder in the German carrier, will still be able to put its code on a number of airberlin routes, but the court ruling means a temporary injunction granted last November, permitting the two airlines to continue all their codeshare flights through January 15, 2016 will end on that date.

As the notice of appeal was filed in the higher administrative court in Lüneburg, Etihad Airways’ President and Chief Executive Officer, James Hogan, reiterated the airline’s unwavering support for airberlin, saying it remained committed to the German carrier, to competition and to consumer choice for German travellers and suggested the social and economic damage to Germany by this decision was significant.

“With airberlin, we are working to ensure that no traveller suffers as a result of this dispute, and all bookings will be honoured. We will fight all the way to protect our investment, to protect our partnership with airberlin and to protect competitive choice in German air travel,” he said.

Etihad acquired a 29.2 per cent stake in airberlin in 2011, following encouragement from German regional and national Government representatives. The airlines had approval for codeshare services on a total of 63 air routes, but in the summer of 2014, the German Ministry of Transport raised concerns about 29 of the codeshares.

Hogan said Etihad Airways’ commitment to airberlin was in “stark contrast to the lack of support” demonstrated by the German Ministry of Transport for the airline. “Make no mistake. Protectionism will undoubtedly harm the investment landscape in Germany,” he said.

In its appeal Etihad argues that with airberlin it has created “new competitive choice” for German travellers with codeshare services to international destinations that have operated for years “without any concerns being raised” as they are pro-competitive, increase consumer choice and meet the terms of the air services agreement between Germany and the UAE.

“Now, after four years of investing in Germany, supporting airberlin jobs as well as creating our own new employment in Germany, we find the rules have changed,” said Hogan.

Etihad said its investments are focussed in markets which will deliver long-term returns and in other markets, such as Australia, India, Italy, Serbia and the Seychelles, its investments have been welcomed and supported. However, Hogan argued that in Germany its commitment has been undermined by the lobbying efforts and protectionist tactics of national airline, Lufthansa.

“We were encouraged to invest in airberlin. However, since that initial investment, we have faced a series of significant challenges, including the introduction of airport taxes, which have directly eroded airberlin’s profitability,” he said.

Etihad argues that 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,” said Hogan.

“Etihad Airways is but one investor in one industry. But our experience will serve as a warning to others when it comes to making international investment decisions,” he added.