EU lawmakers act to address ‘unfair’ airline competition rules

Some EU airlines, notably Air France-KLM and Lufthansa, have long complained about what they see as unfair competition from carriers such as those in the Gulf region. (Reuters)
Updated 20 March 2018
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EU lawmakers act to address ‘unfair’ airline competition rules

Non-EU carriers could see their rights to fly in the bloc revoked if they or their home countries engage in “unfair” competitive practices under rules voted on by a European Parliament committee on Tuesday.
Some EU airlines, notably Air France-KLM and Lufthansa, have long complained about what they see as unfair competition from carriers such as those in the Gulf region — Emirates, Etihad and Qatar Airways — whom they accuse of receiving illegal state subsidies.
The three airlines have vehemently denied such claims.
While the rules passed by members of the European Parliament’s transport committee on Tuesday are not the final version of the law, they represent a hardening of the original European Commission proposal.
“The pressure from highly subsidized third country carriers is increasingly noticeable. It potentially undermines a level playing field in the market, at the expense of European airlines,” said Markus Pieper, the EU lawmaker who is steering the legislation through the European parliament.
“Particularly carriers from the Gulf region, Turkey, China and Russia have strong state connections which can cause market distortions.”
The proposal would allow EU governments and airlines to submit complaints to the European Commission about alleged discriminatory practices they face in non-EU countries or illegal subsidies benefiting non-EU airlines.
The version passed by the European Parliament would see the Commission being able to impose “provisional redressive measures” on third country airlines even before an investigation has been concluded to prevent irreversible injury.
The provision was pushed by the second largest group in the Brussels legislature, the Socialists and Democrats.
The Commission — the EU executive — had not originally proposed curtailing airlines’ flying rights as these are typically granted on a bilateral basis between governments.
Instead it had proposed financial penalties or other measures such as a suspension of ground services.
The Commission has denied that the proposed regulation is a protectionist measure, but many EU governments oppose it on the grounds that it could hurt transport links to their countries.
The Gulf airlines have faced similar pressure in the US.
Qatar recently agreed to release detailed financial information about state-owned Qatar Airways after talks with the US government.
EU lawmakers will have to reach an agreement with member states on a final version of the EU regulation before it can take effect, meaning it will likely undergo further changes.


UAE’s Network International shrugs off Brexit to list shares in London

Updated 21 March 2019
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UAE’s Network International shrugs off Brexit to list shares in London

  • The planned share sale comes at an uncertain time in the UK
  • The company, which operates hospitals in the Middle East, was said to be also considering listing in the US or Singapore

DUBAI: Network International, the UAE payments processor, has committed to a London IPO next month in what would be the UK’s first big share sale of the year.
The company intends to have a free float of at least 25 percent and admission to the London Stock Exchange is expected to take place in April, Network International said in a regulatory filing on Thursday.
The planned share sale comes at an uncertain time in the UK where there is still no clarity around whether Britain will leave the EU or not at the end of the month.
VPS Healthcare, the Abu Dhabi-based hospital operator, is reconsidering plans to list in London due to uncertainty surrounding Brexit, Bloomberg reported on Thursday citing a person familiar with the matter.
The company, which operates hospitals in the Middle East, was said to be also considering listing in the US or Singapore.
Emirates NBD, Dubai’s biggest bank, owns 51 percent of Network International while Warburg Pincus and General Atlantic jointly own the rest.
The share sale will be a key test of investor demand for new listings in London after a subdued 2018 across most European markets.
“Volatility has continued in recent months, driven by the uncertainty around trade between the US and China, the wider geopolitical climate and the potential end of the current bull run,” said Peter Whelan, partner and UK IPO Lead at PwC in a recent report.
“We are seeing a healthy number of companies preparing for an IPO in 2019 despite the ongoing Brexit negotiations which have clearly impacted IPO activity on the London market.”
The payment processor reported earnings of $298 million last year according to its website, up from $262 million a year earlier. It does not disclose net income figures.
The company handles digital payments across the Middle East, which generate three quarters of its total earnings.
Last year it processed some $40 billion in payments for more than 65,000 merchants.
Its key markets in the region include the UAE and Jordan it says that Saudi Arabia offers “significant opportunities.” It also offers services in 40 African countries with Egypt, Nigeria and South Africa being its most important segments on the continent.