LH Demanding Justice from EU!
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LH Demanding Justice from EU!
Everyone should have expected this one to raise it's ugly head........
October 15, 2001
Lufthansa CEO Accuses U.S. Airlines
Of Undercutting European Competitors
By Daniel Michaels and Paulo Prada
Staff Reporters of The Wall Street Journal
BRUSSELS -- Lufthansa Chief Executive Juergen Weber criticized fare cuts by U.S. airlines for flights to Europe, accusing the carriers of using government aid to slash prices and undercut European rivals.
Mr. Weber was one of five top European airline executives who met with European Union Transport Commissioner Loyola de Palacio on Friday, urging her to press U.S. Transport Secretary Norman Mineta to limit American carriers' fare reductions across the Atlantic.
The dispute threatens to hamper trans-Atlantic relations even as the U.S. and its European allies work to strengthen their solidarity against terrorism following the Sept. 11 attacks in the U.S.
U.S. airlines recently received a $15 billion (16.5 billion euros) aid package to help offset losses the industry suffered when all flights were grounded for four days after the attacks, and from the sharp reduction in traffic since then.
Following the meeting, Ms. de Palacio wrote to Mr. Mineta asking him to investigate the charges. She said that if the airlines are indeed using the federal aid to undercut their European competitors, the situation would be "unacceptable" to the EU.
She proposed that the two sides discuss the issue as soon as possible.
Standard or Unfair?
Ms. de Palacio "has to insure that we don't lose a level playing field" between the U.S. and EU, Mr. Weber said in an interview. "We have evidence in France and Germany" of unfair trans-Atlantic price cuts.
The complaint covers all U.S. airlines that fly to Europe, he said -- which would include Lufthansa's partner in the Star Alliance, United -- though like other European airline executives, Mr. Weber said he has no complaint with how American carriers act inside the U.S.
U.S. airlines said cutting fares is standard industry practice. A spokesman for UAL Corp.'s United Airlines in London said it "has simply matched fare sales from Delta, Continental and British Airways."
To call the U.S. aid a subsidy for uncompetitive fares is "a mischaracterization," the spokesman said.
But Mr. Weber said the fare cuts are hurting European carriers.
"If this goes on, it will endanger healthy, efficient airlines here in Europe, because in the long term you cannot compete against somebody who is taking 50% lower fares, which often means fares below cost," he said. If an airline can't charge fares that cover its costs, "then you either go bankrupt or you find a sponsor ... who keeps you alive."
Mr. Weber said he fears the U.S. government is now acting as such a sponsor.
Limited EU Authority
The European airlines and their industry organization, the Association of European Airlines, could not immediately supply data supporting their charge, and Ms. de Palacio said she would need more detailed evidence of their claims before the EU can help, her spokesman said.
Officials from the European Commission, the EU's executive body, have also asked for more data on the airlines' activities so that the EU can consider their requests for greater flexibility on measures that were recently adopted to help carriers pay higher insurance bills and to protect their landing rights at airports.
The European Commission has limited powers to help the airlines, officials say, because the rules governing aviation are still set in bilateral agreements between the U.S. and individual European countries, not with Brussels. Ms. de Palacio wants EU member states to grant the commission authority to handle aviation negotiations on all their behalf.
"Even if there were proof of unfair competition from the U.S. carriers, we would not be able to negotiate," she said in an interview. "It would be up to individual countries to make their own complaints."
Mr. Weber said the airlines are urging their governments to grant Ms. de Palacio authority to talk with Mr. Mineta on their behalf on this issue.
Many planes are flying half-empty these days because people are afraid of flying after the terrorist hijackings. But drastically cutting fares won't bring people back, Mr. Weber said. If a person is afraid, "you cannot attract them with money."
[ 15 October 2001: Message edited by: Celestial Blue ]
October 15, 2001
Lufthansa CEO Accuses U.S. Airlines
Of Undercutting European Competitors
By Daniel Michaels and Paulo Prada
Staff Reporters of The Wall Street Journal
BRUSSELS -- Lufthansa Chief Executive Juergen Weber criticized fare cuts by U.S. airlines for flights to Europe, accusing the carriers of using government aid to slash prices and undercut European rivals.
Mr. Weber was one of five top European airline executives who met with European Union Transport Commissioner Loyola de Palacio on Friday, urging her to press U.S. Transport Secretary Norman Mineta to limit American carriers' fare reductions across the Atlantic.
The dispute threatens to hamper trans-Atlantic relations even as the U.S. and its European allies work to strengthen their solidarity against terrorism following the Sept. 11 attacks in the U.S.
U.S. airlines recently received a $15 billion (16.5 billion euros) aid package to help offset losses the industry suffered when all flights were grounded for four days after the attacks, and from the sharp reduction in traffic since then.
Following the meeting, Ms. de Palacio wrote to Mr. Mineta asking him to investigate the charges. She said that if the airlines are indeed using the federal aid to undercut their European competitors, the situation would be "unacceptable" to the EU.
She proposed that the two sides discuss the issue as soon as possible.
Standard or Unfair?
Ms. de Palacio "has to insure that we don't lose a level playing field" between the U.S. and EU, Mr. Weber said in an interview. "We have evidence in France and Germany" of unfair trans-Atlantic price cuts.
The complaint covers all U.S. airlines that fly to Europe, he said -- which would include Lufthansa's partner in the Star Alliance, United -- though like other European airline executives, Mr. Weber said he has no complaint with how American carriers act inside the U.S.
U.S. airlines said cutting fares is standard industry practice. A spokesman for UAL Corp.'s United Airlines in London said it "has simply matched fare sales from Delta, Continental and British Airways."
To call the U.S. aid a subsidy for uncompetitive fares is "a mischaracterization," the spokesman said.
But Mr. Weber said the fare cuts are hurting European carriers.
"If this goes on, it will endanger healthy, efficient airlines here in Europe, because in the long term you cannot compete against somebody who is taking 50% lower fares, which often means fares below cost," he said. If an airline can't charge fares that cover its costs, "then you either go bankrupt or you find a sponsor ... who keeps you alive."
Mr. Weber said he fears the U.S. government is now acting as such a sponsor.
Limited EU Authority
The European airlines and their industry organization, the Association of European Airlines, could not immediately supply data supporting their charge, and Ms. de Palacio said she would need more detailed evidence of their claims before the EU can help, her spokesman said.
Officials from the European Commission, the EU's executive body, have also asked for more data on the airlines' activities so that the EU can consider their requests for greater flexibility on measures that were recently adopted to help carriers pay higher insurance bills and to protect their landing rights at airports.
The European Commission has limited powers to help the airlines, officials say, because the rules governing aviation are still set in bilateral agreements between the U.S. and individual European countries, not with Brussels. Ms. de Palacio wants EU member states to grant the commission authority to handle aviation negotiations on all their behalf.
"Even if there were proof of unfair competition from the U.S. carriers, we would not be able to negotiate," she said in an interview. "It would be up to individual countries to make their own complaints."
Mr. Weber said the airlines are urging their governments to grant Ms. de Palacio authority to talk with Mr. Mineta on their behalf on this issue.
Many planes are flying half-empty these days because people are afraid of flying after the terrorist hijackings. But drastically cutting fares won't bring people back, Mr. Weber said. If a person is afraid, "you cannot attract them with money."
[ 15 October 2001: Message edited by: Celestial Blue ]
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Dr Weber is spot on. As I have said before, the [b[fifteen billion dollar[/b] bailout of the US airline industry shows what an absolute mockery the Yanks make of 'free enterprise'.
This side of the pond, airlines are going to receive tha more than generous amount of 4/365 of their annual turnover. Considering they didn't incurr any direct operating expenses on those days - and they have the income from ticket sales for those days - it's not an unreasonable deal.
On the other side of the pond, the poor old US taxpayer gets ripped off - yet again. Instead of letting corporate Darwinism do its stuff and weed out the weakest carriers, Uncle Sam has decided to bail them all out of the humongeous holes they have dug themselves.
Greedy, weak management, coupled with greedy strong unions - especially the pilots unions - have led to a large number of US carriers becoming fundamentally bankrupt. If it wasn't for the free money from the government, a number - quite probably including the majors such as United and American, who also managed to sidestep legal claims that would have bankrupted them thanks to a friendly Congress - would have gone to the wall over the next year or two.
And what's wrong with that? There would always be new entrants to take up any genuine passenger or cargo demand - who would employ (at far lower pay scales, it has to be admitted) those made redundant by collapsed airlines.
Instead, they take their free money and use it to compete against the airlines of those countries that are supporting them in their - some would say highly suspect - war against terrorism that mainly seems to be hitting civilian targets in a desperately poor developing country.
Well, sod that! I say. Hopefully, Commissioner de Palacio will stand firm against the Yanks and will introduce strict sanctions against US carriers that use their ill-gotten gains in such an underhand manner.
And what's our own Machiavellian Stephen Byers going to do about it?
This side of the pond, airlines are going to receive tha more than generous amount of 4/365 of their annual turnover. Considering they didn't incurr any direct operating expenses on those days - and they have the income from ticket sales for those days - it's not an unreasonable deal.
On the other side of the pond, the poor old US taxpayer gets ripped off - yet again. Instead of letting corporate Darwinism do its stuff and weed out the weakest carriers, Uncle Sam has decided to bail them all out of the humongeous holes they have dug themselves.
Greedy, weak management, coupled with greedy strong unions - especially the pilots unions - have led to a large number of US carriers becoming fundamentally bankrupt. If it wasn't for the free money from the government, a number - quite probably including the majors such as United and American, who also managed to sidestep legal claims that would have bankrupted them thanks to a friendly Congress - would have gone to the wall over the next year or two.
And what's wrong with that? There would always be new entrants to take up any genuine passenger or cargo demand - who would employ (at far lower pay scales, it has to be admitted) those made redundant by collapsed airlines.
Instead, they take their free money and use it to compete against the airlines of those countries that are supporting them in their - some would say highly suspect - war against terrorism that mainly seems to be hitting civilian targets in a desperately poor developing country.
Well, sod that! I say. Hopefully, Commissioner de Palacio will stand firm against the Yanks and will introduce strict sanctions against US carriers that use their ill-gotten gains in such an underhand manner.
And what's our own Machiavellian Stephen Byers going to do about it?
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Guv
he's gonna do f*ck all, coz he's too busy burying the British rail industry. [And his aides have the important matter of council expenses to be worrying about.]
Maybe Geoff H and Stephen B could be sent out to Afghanistan - via C130 and HALO drop
he's gonna do f*ck all, coz he's too busy burying the British rail industry. [And his aides have the important matter of council expenses to be worrying about.]
Maybe Geoff H and Stephen B could be sent out to Afghanistan - via C130 and HALO drop
