|EC investigation part of Lufthansa's "war" with Etihad|
The Serbian government says it is unfazed by the recent investigation by the European Commission (EC) into Air Serbia’s ownership structure, noting it is primarily aimed at Etihad Airways’ stakes in Germany’s Air Berlin and Switzerland’s Darwin Airline. Last week the EC launched a formal investigation into Etihad Airways’ shareholding and control of several European airlines, including Air Berlin and Air Serbia. The Commission has doubts whether Etihad’s investments are in line with European Union rules on ownership and effective control of EU airlines. Speaking to the Frankfurt based “Vesti” newspaper, Siniša Mali, the economic advisor to the Serbian Deputy Prime Minister, who was also the chief negotiator of Etihad’s takeover of Jat Airways, says, “We recently met with representatives from the European Commission and they asked us the same questions they did in August last year”. Following Etihad’s takeover of Jat in the summer of 2013, the EC requested Serbia to clarify the airline’s new ownership structure.
Mr. Mali also adds, “I have to say that none of the agreements signed between the Serbian government and Etihad Airways are contrary to the European Common Aviation Area agreement, including those concerning corporative control. The most distinguished lawyers from London drafted these agreements and they wouldn’t make an oversight”. According to other sources cited by “Vesti”, Lufthansa played an instrumental role in the EC's decision to investigate Etihad’s investments in Europe, irked by the carrier’s plans to increase its capital in Germany’s second largest airline Air Berlin and its investment in Alitalia. As a result, Air Serbia has found itself in the crossfire of Lufthansa’s dispute with Etihad.
Other airlines can influence the Commission to open formal investigations into cases concerning fair competition. Low cost airline Rynair has made it no secret it played a major role in the EC’s decision to investigate Adria Airways over state aid and went as far as to publicly criticising the Commission for being too slow to rule on the case. Last Friday, the EC warned Italian authorities to be “vigilant” over the imminent tie-up between Alitalia and Etihad. The warning came on the day the Abu Dhabi based carrier was expected to make a formal offer to buy as much as a 40% stake in its Italian counterpart. In early February, Lufthansa called on the EC to halt Etihad's planned investment in Alitalia, alleging the use of state aid in disguise to break competition rules.