BRUSSELS Feb 28 The French and German flag
carriers have urged the European Commission to counter what they
say are unfair practices by Gulf airlines, seeking to influence
the drafting of a new EU law.
The CEOs of Lufthansa and Air France-KLM
wrote to EU Transport Commissioner Violeta Bulc this week asking
the Commission to define what practices amount to
anti-competitive behaviour and providing for the limitation of
traffic rights as a sanction.
"The incredibly fast parallel expansion of the Gulf carriers
in Europe for more than ten years has severely damaged European
network carriers," the CEOs wrote in the letter.
"Not acting would be short-sighted: short-term advantages
for European consumers in the form of lower fares would only
last until such time as European network airlines have been
largely driven out of the market."
European legacy carriers have been hit by the rapid growth
of the main Gulf carriers - Emirates, Qatar Airways and Etihad -
and shifting traffic flows to Asia.
They have repeatedly accused the Gulf airlines of receiving
illegal state subsidies - which the companies deny - and have
asked the EU to do more to tackle the challenge.
Lufthansa has started cooperating with Abu Dhabi-based
Etihad. But the charge of unfair competition has not gone away,
with Lufthansa CEO Carsten Spohr repeating earlier this month
that he rejected subsidies as he signed a catering deal and
maintenance project with Etihad.
The letter said Lufthansa, Air France, KLM, Brussels
Airlines, Swiss and Austrian Airlines have together had to
terminate services to over 30 destinations in the Middle East,
Asia and India in recent years.
The Commission is working on a law enabling it to impose
duties on non-EU airlines or suspend their flying rights if it
finds they have harmed European airlines through unfair
subsidies or discriminatory practices, a draft seen by Reuters
Lufthansa and Air France-KLM also asked the Commission to
ensure that a reduction in state subsidies and increased
financial transparency be the outcome of talks with Qatar on an
air services agreement.
"As the European Commission is offering a new EU-wide air
services agreement to the State of Qatar, it needs to be with
the explicit understanding that unfair competitive practices and
subsidies need to be scaled down," the executives wrote.
The Commission was given a mandate by member states to
negotiate air services agreements with Qatar and the United Arab
Emirates last year. So far, discussions have only started with
Such agreements set out where and how often foreign airlines
can fly into the EU.
(Reporting by Julia Fioretti Editing by Ruth Pitchford)