|European Commission investigating Etihad-Air Serbia tie-up|
The European Commission (EC) has launched a formal investigation into Etihad Airways’ shareholding and control of several European airlines, including Air Berlin and Air Serbia. According to “Aviation Week”, the Commission has doubts whether Etihad’s investments are in line with European Union rules on ownership and effective control of EU airlines. The tests of ownership and control are separate and both have to be met to achieve compliance for an airline to keep its EU “nationality” and traffic rights. While Serbia is not an EU member state, as a candidate country it must adhere to the Union’s pre-accession policies and guidelines. Etihad has a 49% stake in Air Serbia, which is in line with EU regulations, however, questions have been raised whether Etihad has too much effective control over the Serbian carrier, despite its minority stake.
The Commission has sent letters to the German government and to the government of Serbia requesting detailed information on Etihad’s influence and control of Air Berlin and Air Serbia respectively. Furthermore, the Commission has also asked Switzerland to examine Etihad’s purchase of a 33.3% stake in Darwin Airline and to identify whether it is effectively controlled by a Swiss national, or rather by the Abu Dhabi airline. While the Commission can launch investigations on its own accord, complaints can also be filed by other airlines. It has been suggested that several airlines have been affected by Etihad’s recent European spending spree.
The investigation comes days after Etihad announced plans to expand its European airline empire. The national carrier of the United Arab Emirates plans to increase its stake in Air Berlin. The deal, if approved by shareholders, could be a prelude to combining Air Berlin with Alitalia, thought to be Etihad’s main goal. The Emirati carrier plans to boost its stake in Air Berlin to 49.9% from its current level of about 30%. Air Berlin spokesman Mathias Radowksi says the carrier is "currently in advanced discussions on options, which, if implemented, would have a substantial effect on the company". Air Berlin is Germany’s second largest airline, behind Lufthansa. The EC has also warned the Italian government that a restructuring of its struggling national carrier Alitalia, with the help of Etihad, will have to respect the EU’s rules on ownership and control.