Lufthansa weighs in on Gulf debate

Lufthansa weighs in on Gulf debate
By Hannah Edensor


Lufthansa has weighed in on the Gulf carriers’ capacity debate, saying it appears competition is far from a “level” playing field.

As Gulf carriers appear to be on track to double current capacity by 2020, Lufthansa have voiced concerns Etihad, Emirates and Qatar in particular, will grow beyond the demand of its local markets and begin to eat into European carriers’ future growth on east-bound routes, senior Vice President corporate strategy & innovation, Sadiq Gillani told reporters at the airlines’ Premium Economy launch in Frankfurt yesterday.

“We are already struggling with our east bound flights, and this will only get worse,” Gillani said, adding a need for government intervention to implement “fair competition”.

“We will be heavily impacted by this growth … European carriers will offer less on these routes because they cannot compete.”

According to Lufthansa head of commercial management Munich & political affairs Barvaria, Stefan Landes, the issue was not competition but that the airlines were not competing on a “level playing field” with the Gulf carriers.

“This is not the right way for competition,” Landes said, referring to the recent US carriers’ reports claiming Gulf carriers were given airline subsidies and state support, which later helped fuel growth in times of decline in air travel.

“The (report) gives me an impression this is not a level playing field. Give us a level playing field and we’ll work on competition,” Landes said.

“As long as it is on a level playing field, welcome, we have to deal with it.”

Gillani added that it appeared Gulf carriers did not have to deal with “normal market dynamics”, such as infrastructure costs, taxes and environmental demands at its home-countries.

As a result of increased competition, Gillani said Lufthansa has had to re-design its services to establish Eurowings – taking over the former German Wings product, and launching it as a no-frills low cost carrier. Its first route will be to fly between Germany’s Cologne airport, due to lower fees, to Dubai.

Gulf carries have since denied claims of receiving airline subsidies.

Email the Travel Weekly team at traveldesk@travelweekly.com.au

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