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German govt tells Emirates to raise fares

20 Nov 2009 by AndrewGough

“Emirates has been ordered to raise its fares in the German market or face fines starting at Euros 25,000,”  Andrew Parker, the airline’s senior VP for public affairs, told Business Traveller.

The move comes at a time when savvy German travellers find they can save thousands of Euros by booking long-haul flights with indirect (where a plane change is required) rather than direct or non-stop carriers.  The savings are especially advantageous when flying business class – see table below.

“It would seem that Germany’s aviation policy is to force us to increase our fares if we are seen to be cheaper than the national airline and its Star Alliance partners,” added Parker.

“We position ourselves as a quality carrier. But of course we are going to be less expensive than an airline which flies non-stop because passengers who choose to fly with Emirates to, say, Asia or Africa,  have to change planes,” he says.

In a letter seen by Business Traveller, Andreas Marquardt, president of The Federal Office for Goods Transport, tells Emirates that “While price leadership [on a route] is allowed for EU airlines this situation does not apply to airlines of non-EU countries.”

With a few exceptions, aviation on long distance routes is not de-regulated as it is within the EU.  So governments retain the right to enforce the rules if they feel an airline or airlines of other countries have what they believe is an unfair advantage over their national carrier.

But Emirates believes this protectionist attitude is wrong in this day and age.  Speaking at London’s Aviation Club a few days ago, Emirates  president Tim Clark referred to this issue by saying “Let me state categorically that we price our tickets commercially, competitively and fairly in all markets we serve.”

“It means that as a consequence of the current German policy, Lufthansa’s fares ex-Frankfurt are being maintained at artificially high levels.”

“They are often the highest in the market by a large margin – something which is clearly to the detriment of German travellers and the German economy,” added Clark.

And while the German government’s complaint centres around the pricing policies of other non-EU carriers, Emirates feels it is “being unfairly targeted because we are viewed as being a large foreign operator into Germany,” says Andrew Parker.

According to Andreas Marquardt’s letter, “The measure has not been taken unilaterally at the expense of Emirates. I have asked other non-EU carriers to take their prices from the market.”  

But Emirates feels it is being unfairly treated “because we are viewed as a large foreign operator into Germany” says Andrew Parker.  Although tariffs have been readjusted there are examples where several non-EU airlines continue to charge less – see below.

So far the situation is both confusing and unresolved.  Further developments are awaited.  Readers planning business class trips to Asia and so on and who seek attractive fares might wish to book now while such deals are available. This subject has also prompted a discussion on our forum – to join in click here.

Examples of return business class fares comparing local and non-EU carriers.  Except where noted, all prices were quoted by online agent opodo.de on November 20. They cover flights departing on Sunday November 29 and returning on Friday December 4.

Frankfurt-Singapore

  • Emirates  Euros 3,274
  • Turkish Airways Euros 3,445
  • Qatar Airways Euros 3,548
  • Qantas Euros 5,279 (non-stop)
  • Lufthansa/SIA Euros 5,453  (non-stop)

Berlin-Singapore

  • Qatar Airways  Euros 2,193
  • Turkish Airways  Euros 3,436
  • Qantas Euros 4,137
  • SIA  Euros 4,777
  • Lufthansa  Euros 5,629  
  • Emirates quotes no price
  • All flights indirect..

Frankfurt-Hong Kong

  • Qatar Airways Euros 2,125
  • Korean Air Euros 2,553
  • Emirates 2,743 *
  • Cathay Pacific Euros 4,736 (non-stop)
  • Lufthansa Euros 5,041  (non-stop)

(Note: * quoted by emirates.com)

Frankfurt-Johannesburg

  • Air Namibia Euros 1,857
  • Emirates Euros 2,689
  • Lufthansa  Euros 4,641 (non-stop)
  • SAA non-stop (No fare quoted. Flight fully booked)

Report by Alex McWhirter

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