Germany approves Etihad-Air Berlin code shares until Jan 15

Etihad owns 29.2 per cent of loss-making Air Berlin, which is currently working on a new restructuring plan

Air Berlin and major shareholder Etihad Airways have until mid-January to find a workaround for their disputed code share flights, the German transport ministry said on Friday, approving the flights for what it said was the last time.

Code-share agreements allow airlines to sell tickets for flights operated by partners, enabling both to offer more destinations to their customers and bring in extra revenue.

The German government had previously approved all 65 code share routes between Etihad and Air Berlin since 2012, but last year said that around 29 routes weren’t covered by an air traffic agreement between the two countries.

Under that accord, UAE carriers may fly to four airports in Germany but those do not include the capital, Air Berlin’s home hub.

The government had approved the Air Berlin and Etihad code share flights on last winter and this summer’s schedule as “exceptions” while it negotiated with the UAE.

“Etihad Airways has for the last and final time been awarded the right to these code shares until Jan 15, 2016, in order to ensure that passengers who have already bought tickets are not inconvenienced,” a transport ministry spokesman said.

Passengers of Air Berlin and Etihad had already booked more than 82,000 trips on the disputed routes this winter, Etihad had said earlier after it successfully won a court injunction to keep the code shares until Nov. 8.

The ministry said its extension to mid-January would give the airlines time to restructure the code shares, such as by changing them into so-called interlining agreements, which are a step down from code shares and would mean the Etihad code being removed from Air Berlin’s scheduled flights and Etihad.

Etihad said code share routes, which open up European destinations to Abu Dhabi-based carrier, were a key reason it invested in Air Berlin. Etihad owns 29.2 per cent of loss-making Air Berlin, which has made operating losses in four of the last five years and is currently working on a new restructuring plan.

The code share partnership has brought the German carrier 252m euros ($277.43m) in additional earnings since being set up in 2012, Etihad said.

“The failure by the German government to approve the code shares in time would severely, and possibly terminally, damage Air Berlin,” Etihad CEO James Hogan said in a statement after the court decision but before the transport ministry extended the code shares.