Etihad shrugs off Commission concerns

Etihad looks to protect its European airline empire

Etihad Airways has shrugged off the European Commission’s (EC) investigation into its equity stakes in Europe, including Air Serbia, as it plans to announce a minority takeover of Alitalia this week, a move which will further aggravate its rivals. The European Commission recently widened its investigation into Etihad’s investments in European airlines to include Air Serbia and Switzerland’s Darwin Airline, part of a wider examination into whether foreign ownership of European airlines complies with EU airline licensing rules. “Etihad has not been notified of any European Commission investigation”, a spokesperson from the airline said. He added, “Our minority equity investments in Air Serbia and Air Berlin met all relevant regulatory requirements. Etihad Airways' recently announced minority equity investment in Switzerland's Darwin Airline also meets all relevant requirements, with government and regulatory approvals still pending”.

A spokesman for Siim Kallas, the European Union commissioner for transport policy, confirmed the Commission has been in contact with Serbian and Swiss authorities regarding the Abu Dhabi carrier’s stakes in Air Serbia and Darwin Airline respectively. “The Commission is also looking at foreign investments in certain airlines licensed by the EU's trading partners - airlines operating within EU on the basis of the EU aviation agreements concluded with these partners. Under these agreements, the Commission asked Switzerland and Serbia for further details about Darwin Airline registered in Switzerland and Air Serbia in Serbia”, the spokesperson told the Gulf’s “Arabian Business”. He pointed out the Commission had not been in direct contact with any airline, in Europe or the Gulf, and had communicated directly with government representatives.

While the Commission did not speculate on the possible outcomes of the investigation, aviation analyst Saj Ahmad was critical of the timing. “That the EU did not investigate such deals before they were sealed speaks to their incompetence, if the EU was really that concerned, they'd have done all this beforehand. Etihad could still appeal any rulings, but if the EU persists, you can bet your buck that Airbus will be worried because if Etihad responds by cancelling orders, that will mean jobs at risk for Airbus in the long run and in the wider supply chain too”, Mr. Ahmed said. He added, “Etihad loses nothing, but if they pull out of their European investments, can Air Berlin, Darwin and Air Serbia survive? Not likely. That's tens of thousands of jobs at stake. The EU's plan has more holes than a sieve”.

There is no legal time frame for the conclusion of the EC’s investigation which has made global headlines, though has been largely muted in Serbian press. Last week, the Serbian government said none of the agreements signed between itself and Etihad Airways are contrary to the European Common Aviation Area agreement. It has also said it had been granted approval to publish its agreement with Etihad with details to be made public soon. The EC is now investigating two national carriers from the former Yugoslavia, the other being Adria Airways. The Abu Dhabi based carrier is expected to make an offer for Alitalia today, according to pundits. Etihad is reportedly planning to take a 40 to 49% stake in the Italian national airline.