7 January 2016

Etihad Airways outlines key grounds for appeal in disputed codeshare case

Etihad Airways has outlined its key reasons for contesting the decision by a German court to reject approval for 29 of its codeshare flights with airberlin, as it submitted the full grounds for appeal today to the Higher Administrative Court in Lüneburg.

The airline also asked for injunctive relief to allow the disputed codeshares to run until at least the end of the winter schedule (26 March 2016), so as not to inconvenience passengers whilst the legal process is still under way.

Separately, Etihad Airways and airberlin have already committed to honour all bookings.

Etihad Airways stated that the Court misread the Air Traffic Agreement and the Route Schedule, which are bilateral agreements between Germany and the United Arab Emirates setting out the agreed basis for airline operations between the two states.

It listed a series of objections to the decision, including:

  • As the Air Traffic Agreement and the Route Schedule are bilateral agreements, their legal interpretation should be based upon a common understanding between the two Governments. This common understanding has been demonstrated by the German Ministry of Transport’s approval of the now disputed codeshares six times in a row since 2012. The unilateral decision by the Ministry to change this interpretation is not legally permissible.
  • The Route Schedule clearly allows a UAE airline to operate to four cities with its own aircraft and to codeshare to three additional cities in Germany and to points beyond Germany.
  • The concept of codesharing is well established globally as a mechanism to offer increased choice to travellers. Removal of these previously approved codeshares will deny customers competitive choice in the German air travel market and damage airberlin.

Jim Callaghan, General Counsel for Etihad Airways, said: “This is a battle for the proper enforcement of the bilateral agreement between Germany and the UAE, and for the protection of competition and consumer benefits. As Germany’s dominant national carrier, facing competition only from airberlin, Lufthansa clearly stands to benefit from any decision that curtails these codeshares to the detriment of customer choice and competition.

“The codeshares in question have been approved over six seasons, which is entirely correct under the terms of the agreement. However, as airberlin’s offer becomes more compelling as a result of this codeshare network, Lufthansa has lobbied the Ministry of Transport to block this competitive choice.

“We believe the terms of the bilateral agreement are clear and unequivocal and we are confident that a correct review of our appeal will lead to the continuation of competition and choice in the German market.”