Lufthansa Aims `To Take Gulf Carriers Down' in Europe Push, Emirates Says

Deutsche Lufthansa AG is bidding to stop Dubai-based Emirates serving more German cities as part of a campaign to undermine its rival’s business model, Tim Clark, the Middle Eastern carrier’s president, said in an interview.

Cologne-based Lufthansa has so far succeeded in lobbying to prevent Emirates from obtaining landing slots in Stuttgart and at the new Berlin-Brandenburg International airport, which is scheduled to open in June next year, Clark said.

“Their mantra is to take the Gulf carriers down, as well as dominate the markets they sit in,” he said. Emirates aims to “re-engage” with the German government over the slots issue before the summer and is hopeful it “will see sense,” he said.

Lufthansa spokesman Peter Schneckenleitner said traffic rights are negotiated between governments, not airlines, and that his company has no influence over decision making.

The world’s No. 1 airline on international routes, Emirates is embroiled in a spat with European and U.S. carriers over access to financing from export credit agencies after building up orders for 200 planes worth $68 billion. Clark said the real issue lies with its competitors’ failing business strategies.

“It has taken European carriers donkeys’ years to adapt their business models to the changing dynamics of global civil aviation,” he said. “They haven’t been able to align their traffic flows to what is going on, whereas we have.”

Emirates already operates from Dubai to the German cities of Dusseldorf, Frankfurt, Hamburg and Munich, whereas Lufthansa, which has full traffic rights, according to Clark, offers only on a single route from Frankfurt.

‘Declared Goal’

“It’s a fact that Emirates benefits from traffic rights in Germany which are the most liberal ones in continental Europe,” Schneckenleitner said. “It’s the airline’s declared goal to reroute traffic from Germany and Europe via Dubai.”

The Gulf carrier’s earnings are likely to improve in the fiscal second half ending March 31, driven by higher occupancy levels, a strong cash position and more effective cost controls, said Clark, who spoke by telephone from Toronto.

“We will finish on a very positive good year,” he said.

Profit more than quadrupled to 3.4 billion dirhams ($926 million) in the six months to Sept. 30, Emirates said Nov. 1.

To contact the reporter on this story: Tamara Walid in Dubai at twalid@bloomberg.net

To contact the editors responsible for this story: Kenneth Wong at kwong11@bloomberg.net; Benedikt Kammel in Berlin at bkammel@bloomberg.net

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