Etihad built a very useful network within the EU by buying stakes in EU airlines. The idea was that this would circumvent limitations on air service.  The strategy has largely been successful.  Then a German court said “No more“.

In Germany Etihad’s partner is Air Berlin in which it holds a 29% stake.  The court decided that Etihad cannot continue to operate Air Berlin code-share flights between January 16 and the end of the winter schedule in March.  This is because such flights were not covered by the current air traffic rights agreement between Germany and the UAE.

In other words the strategy in Germany is threatened.  Etihad says it will appeal.  Meanwhile Air Berlin has had a rocky history and, without Etihad, it might see its own business crimped.

Meanwhile other EU nations must be watching this with great interest.  Lufthansa has not said anything, but must be delighted with the news.  If the German court decision forces Etihad and the UAE back to the table to revisit the bilateral, other EU nations could undertake a similar strategy (if their law allows for this).  Other UAE airlines must watching this warily, especially Emirates.

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