Emirates Air agrees to raise German fares

November 25, 2009 by Marcel van Leeuwen

DUBAI – Emirates Airline said Wednesday it had agreed “under protest” to a German government demand that it raise fares on some routes, and alleged that Deutsche Lufthansa AG was being protected by its host state.

According to the carrier, the German authorities told it last week to raise business-class fares on three routes operated via its Dubai base. Emirates said the increase was aimed at aligning its fares with two members of the Star alliance, which is led by Lufthansa.

“Given the scale of fines being threatened, Emirates had no choice but to adjust the tariffs in question,” the airline said in its in-house magazine. “We did so under protest.”

Emirates’ angry reaction comes as the carrier takes an increasingly vocal stance on an array of international regulatory issues, including the competitive impact of the three alliances that dominate the sector. It is not a member of the Star, SkyTeam or Oneworld groupings.

The airline has become one of the most feared competitors in the industry, and has had to fend off allegations about government subsidies and other non-commercial support. While Dubai has many “open skies” deals with other countries–deregulating market access and fares–its rapid expansion is butting against more restrictive pacts with nations including Germany, India and Canada.

Germany told the airline to raise business-class fares on services from Frankfurt to Johannesburg, Hamburg to Singapore and Berlin to Singapore, all operated via Dubai.

“We believe not only is this anticompetitive but that this selective and non-transparent tariff matching policy is not in the interests of German consumers,” said Emirates, which maintained its fares on the routes were already being undercut by carriers including Air France-KLM and British Airways.

Emirates claimed that “as a consequence of some current German policies, Lufthansa’s own fares ex-Frankfurt are being maintained at artificially high levels.”

Source: business.maktoob.com