Lufthansa twice walked away from a deal with Etihad, says CEO

Leading critic of Gulf carriers "reneged" on partnership in 2011, claims James Hogan
By Staff writer
Tue 01 Jul 2014 10:51 AM

German flag-carrier Lufthansa, which has been engaged in a long-running war of words with Gulf airlines over alleged subsidies and state backing, walked away from a planned codeshare agreement with Etihad in 2011, the Abu Dhabi carrier’s CEO has revealed.

“Twice they shook hands with me and then they reneged,” Etihad president and CEO James Hogan told Arabian Business. “The former CEO of Lufthansa [Christoph Franz] had agreed for Etihad to move into a codeshare.

“At a supervisory board level they decided not to support him and so they didn’t go forward. That’s what prompted us to work with Air Berlin.”

Etihad has since built up a codeshare network with 47 other airlines, and signed a deal to buy a 29.21 percent stake in Lufthansa competitor Air Berlin in December 2011.

In May, Lufthansa’s new chief executive officer reignited the debate between legacy European carriers and their counterparts in the Gulf, claiming the likes of Emirates, Etihad and Qatar Airways are not operating on a "level playing field".

In comments published by Bloomberg, Carsten Spohr identified the menace of fast-expanding Gulf carriers as his biggest challenge.

Spohr, who took over from Christoph Franz as CEO of the German company on May 1, said the emerging long-haul airlines represent a different threat than short-haul discount operators.

“Those we can handle, they are on a level playing field,” he said. “With the Gulf carriers, it’s different.”

His predecessor Franz had previously clashed with Gulf carriers and in 2011, Lufthansa was embroiled in a row with Emirates Airline over landing slots in Germany.

The carrier lobbied its government to stop Emirates gaining additional landing rights in Germany while Emirates president Tim Clark accused Lufthansa of mounting a deliberate campaign to undermine its rival and of planning to "take the Gulf carriers down”.

 In 2010, Emirates’ public affairs journal published a powerpoint slide produced by the Star Alliance team – which is headed by Lufthansa – entitled “How Can We React To The EK [Emirates] Threat?” The slide had a number of headings, included ‘lobby with governments’, ‘try to prove state subsidies’, ‘stop DXB [Dubai] services’ and, finally, ‘stop filling their planes’.

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