ABU DHABI: January 06, 2016. As investors react to the prospect of Volkswagen paying fines of up to US$50 billion for falsifying emission levels on its diesel cars, Etihad Airways CEO James Hogan has declared “protectionism will undoubtedly harm the investment landscape in Germany”, following a German court decision to revoke 29 of the airline's codeshare flights with airberlin.
Etihad took a 29.2 percent stake in airberlin in 2011 and received approval for codeshare services on 63 air routes. The Abu Dhabi airline now claims lobbying by Lufthansa prompted the German Ministry of Transport in 2014 to raise concerns about 29 of the codeshares. Last November it only approved them until January 15 this year.
Last week the administrative court of Braunschweig in Lower Saxony ruled the government was entitled to reject the disputed route segments. Following the filing of an appeal with the state’s higher court in Lüneburg Hogan said: “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.”
Noting Etihad investments have been welcomed in Australia, India, Italy, Serbia and the Seychelles, Hogan said the airline’s commitment to airberlin was in “stark contrast” to what he claimed was a lack of support by the Ministry of Transport due to the lobbying and protectionist tactics of Lufthansa.
“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,” he warned.
“Investors need every reassurance that the integrity of their investments in Germany will be respected and protected. 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,” added Hogan.
Leisure Cargo, which represents the airberlin group, has interline arrangements with Etihad and Pegasus Airlines – which also has had a codeshare agreement with airberlin since 2011, plus a 12.02 percent stake via its majority shareholder.