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Thu 20 Jan 2011 10:52 AM

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Dubai not level playing field for airlines, says Lufthansa

Dubai trade laws are ‘ancient’ and biased towards Emirates, says German carrier

Dubai not level playing field for airlines, says Lufthansa
German flag carrier
Dubai not level playing field for airlines, says Lufthansa
Emirates Airlines chief executive officer Sheikh Ahmed bin Saeed Al Maktoum
Dubai not level playing field for airlines, says Lufthansa
A groundcrew member helps guide a Lufthansa Airbus A380 passenger plane before take off. (Getty Images)

Lufthansa, the German carrier embroiled in a row with Emirates Airline over landing slots, has said Dubai’s ‘unfair' trade laws block it from competing fairly with Emirates on its home turf.

The carrier, which is lobbying its government to stop Emirates gaining additional landing rights in Germany, said the idea that Dubai offers a level playing field to international airlines is a myth.

“[Emirates] can walk freely and move freely in Germany. We Lufthansa, according to the local laws of the Arabian sponsors, are very much limited the way we do business in Dubai because we have to adhere to local sponsorship agreements,” Joachim Steinbach, Lufthansa’s vice president of sales and services for the region, told Arabian Business.

“We cannot do business as a legally independent company. We are really restricted. We have to overcome these ancient trade obstacles of the way we do business here, which is a lot of cost.”

Arabian Business first reported this week that Lufthansa had lobbied the German Federal Government to prevent Emirates gaining direct flights to the capital.

The Dubai carrier, which currently flies to Hamburg, Frankfurt, Munich and Dusseldorf, has been asking for a direct service to Berlin and Stuttgart since 2004.

Emirates President Tim Clark this week accused Lufthansa of mounting a deliberate campaign to undermine its rival and of planning to ‘take the Gulf carriers down”.

Lufthansa is one of a number of European carriers, including Air France KLM and British Airways, to call for curbs on the expansion of Gulf carriers on long-haul routes.

The carriers claim Gulf airlines use unfair subsidies to finance aircraft deals and to take market share from existing airlines.

Steinbach said the existing bilateral flight agreement between the UAE and Germany was already “the most liberal one that exists between the UAE and Europe”.

In contrast, Lufthansa does “not enjoy equal treatment in Dubai due to the sponsorship requirement,” he said.

The German carrier has denied that it is actively pushing its government to rein in Emirates’ expansion in its domestic market.

“It is fair enough that we compete but who can be excited about a new competitor entering the scene,” said Steinbach.

However, Christoph Meier, head of corporate communications, Lufthansa Middle East said: “It is a no-brainer on our side [that] we wouldn’t push for them to get more rights.”

Emirates has faced similar issues in Canada. Ottawa’s transport agency last November declined to give UAE carriers Etihad and Emirates additional landing rights, despite years of requests.

Emirates’ vice president Maurice Flanagan told Arabian Business he believed the refusal was fuelled by opposition from Lufthansa.

“They are targeting Emirates, being egged on by Lufthansa… It is purely the protection of Air Canada,” Flanagan said.

 

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ahmed 9 years ago

Now we are talking...

Ali 9 years ago

I think the world needs to understand that this tiny country (excluding expats) like ireland luxemberg ,finland, cannot simply allow insurance companies, port operators, airlines, telecoms company to set up business here. All these should remain in local hands. I don't understand what is wrong in this.

Michael 9 years ago

I think the answer to this problem is very simple, all Arabs should boycott Air Canada and Lufthansa, lets see how much business they do then.

MM 9 years ago

Sick and tired of Europeans and Canadians whining about Gulf carriers. I mean seriously, if you spend the time being jealous and crying on more productive methods such as – how to get more passengers, then I think your books will look profitable.
Reading these aviation stories is like being a principal of a secondary high school. Seriously. Get away from the press, and get back to work.

Mohamed 9 years ago

Lufthansa complained about a specific issue not a general complaint. They complained about the sponsorship law, which could be solved by setting up in any of the free zones around the city - maybe the airport free zone could suit them.
I think the statement of Joachim Steinbach, Lufthansa’s vice president of sales and services for the region, sums it up:
“It is fair enough that we compete but who can be excited about a new competitor entering the scene,”

feroze 9 years ago

Dude really, how many Arabs are there in the UAE? Do you think Air Canada or Lufthansa would be effected by an Arab Boycott..........Emirates/Etihad/Qatar all rely on 6th freedom traffic fed thru their hubs ie they will carry a passenger from say Columbo to Dubai and onto London. If they were relying on just UAE traffic they would need a total fleet of 20 planes probably. The objection that all the european carriers have is that the Arab carriers not only have governments with deep pockets supporting them but that they are taking traffic thru their Hubs in the ME that really isnt ME traffic ie they dont even stop enroute.

Ferdinand Marcos 9 years ago

Love that straight forward business talk of Lufthansa!

Here is the most successful European carrierer, leading a worldwide business alliance. They work the numbers, they make money, they are traded on the stock exchange.

You better listen if the the strong boys talk, that is MidEast philosophy!

Khaled 9 years ago

That`s a classic action of a distressed market strategy by LH ,AF, or others, when you can`t keep up with the strong businss rivals is to attack them or their business expansion. In other words, that`s what we call success, well done Emirates. Etihad`s position is like a growing threat to western Airlines, safe do not given any chance to become also successful.

jane Speak 9 years ago

Yes, Dubai is a fab place, love it! However, another nail and momentary lapses of deep reality reasoning can bite us all. This seemingly endless and well marketed love affair for everything Dubai and Emirates has to bite them too at some stage.
Lufthansa state a fact, whether it pleases the local (Gulf) psyche or not.
Of course Lufthansa can set up in the Free Zone, but it would in theory mean they have to land their planes in the Free Zone carrying passengers not intended for Dubai. To do that, they STILL need a local trader.
Nowhere in Europe or the States do such 'archaic' laws or even thinking exist.
Despite all the fancy false advertising claims , all major airlines are much of a muchness, but Lufthansa is absolutely right and if they want to fly here, Get over it! Likewise Emirates; a uncaring, advantage taking, none too comfortable airline, should stop all this 'you must appease us - or they will come unstuck!

Mick 9 years ago

Apparently, Ali, you haven't, for some reason....seen the damage that a monopoly can do in complete and utter lack of protection of the customer. Etisalat (not to get into any new conversations) for example, owns the telecom in this country (don't even say that du is a real competitor, they are almost the same company). Because of this monopoly and the restrictions on outside companies coming in (ex:Vodaphone) we are charged insane amounts of money for a very poor, unreliable service and what are we supposed to do? Go without internet and phone service? I'm Canadian and I wish that Canada would let Emirates, Etihad and tons of airlines get landing sites (as long as they are safe and world class)....the more competition, the better for the customer. Also, our PM is NOT Canada.....don't hack on all Canadians because of one choice by a PM with a little too much huberus. We've done so much, historically, for friendly nations and all of it gets stamped on because of one decision.