June 7, 2015: The chief executive officer of Lutfhansa Airlines said he welcomes the Big Three US airliners to the dispute over whether the Big Three Middle Eastern carriers are unfairly competing against legacy airlines.
Carsten Spohr, CEO of Lufthansa Group, told a press conference on the opening day of the IATA Annual General Meeting that LH has long been complaining about Emirates Airline, Qatar Airways and Etihad Airways and their aggressive expansion, first in Europe and now the US.
American Airlines, Delta Air Lines and United Airlines are challenging open skies and subsidies to the ME3.
Spohr called on regulators to look to the World Trade Organization (WTO) and its mechanism used to determine whether unfair competition and/or illegal subsidies exist. The US3 have called on the US government to revisit the Open Skies agreement with the Middle Eastern countries, a move opposed by some US carriers, including JetBlue (a partner of Lufthansa, interestingly enough) and FedEx, as well as The Boeing Co.
Spohr said that “openness” and “fairness” are required for competition, neither of which he believes exists with the ME3. These airlines receive favorable support from their governments, Spohr said, a refrain echoed by the US3.
Spohr said some governments have restricted the ME3’s growth ambitions. He noted that Germany restricts destinations and Austria restricts frequencies. Other regulators should consider doing the same, he inferred.
Declining main deck cargo
Spohr, whose Group include Lufthansa Cargo, continues to see a shift of cargo from main-deck, dedicated freighter to greater use of belly capacity in passenger airplanes such as the Boeing 777-300ER. He said his European competitors are all exiting the dedicated freighter business and LH Cargo is downsizing its fleet, replacing its Boeing MD-11Fs with fewer, but larger, Boeing 747-400Fs.
Fifty percent of Lufthansa’s freight business moved by cargo aircraft when Spohr joined the company. Today only 40% does.
At the ISTAT conference in March, The Seabury Group predicted that in five years 75% of freight will be in belly capacity of passenger airlines.