Air Berlin Code-Share Flights With Etihad Airways Blocked • Raises Concern On Whether Etihad Will Continue to Pump Money Into Loss-Making German Carrier

The Wall Street Journal

By Archibald Preuschat And  Ulrike Dauer

Oct. 10, 2014 6:07 a.m. ET

FRANKFURT— Air Berlin PLC said on Friday the German federal aviation office has decided to block some code-share flights with Etihad Airways, raising concerns whether the Abu-Dhabi-based airline will continue to pump money into the loss-making German carrier.

The aviation office has declined approval for 34 Etihad-Air Berlin code-share flights from Abu Dhabi to Germany in the winter schedule 2014/2015, Air Berlin said.

Air Berlin has been struggling to reverse years of losses. The airline has been propped up several times by Etihad Airways, its largest stakeholder with about 30% of the shares, through both bonds and equity

Air Berlin said it is taking legal steps against the decision, fearing economic damage. It also said it is working on all political and business levels to resolve the matter, arguing that the aviation office, FAA, has approved the code-sharing for the past six years. The decision would affect 46,000 bookings, the airline said.

“This step threatens German jobs; further growth will happen outside of Germany and strengthen other hubs,” said Air Berlin Chief Executive Wolfgang Prock-Schauer. For German airports, this would result in a loss of attractive connections and in growth, he added.

Presently, Air Berlin offers flights from Abu Dhabi to Germany that can be booked under an Air Berlin and an Etihad code, which facilitate international sales and ensure better capacity utilization of Air Berlin planes.

Because of a bilateral agreement between Germany and the United Arab Emirates, Germany’s federal aviation office must approve the code-sharing flights twice a year, for the summer and the winter schedule.

—Natalia Drozdiak contributed to this article.

Source:  http://online.wsj.com