The Lufthansa Flyover Scandal

This week the German airline Lufthansa has found itself in a significant dispute with the Russian government, when their freight carrier subsidiary was banned from flyovers of Russian airspace – a political decision of enormous economic impact for the company. We have been monitoring very carefully the curious intervention of the Social Democrats (SPD), who have secured a temporary extension for the airline. Below are two exclusive translations from the German media which show that there may be a bigger story behind this. More to come from Bob soon. Source: Frankfurter Allgemeine Zeitung, November 2, 2007, Page 1

A Scandal By Günther Nonnenmacher, FAZ, Nov. 2, 2007 The significance of the flyover ban that Russia has imposed on Lufthansa’s freight carrier subsidiary is only to be grasped if one places it within the larger puzzle of Russian behaviour in the past months: Moscow is demonstrating all around – in international politics, in the energy sector, and now in the sphere of global air traffic co-operation as well – its regained significance, its potential to wield power and to disrupt. That a new agreement on air traffic was just concluded does not seem to interest the Kremlin; it is simply pushed aside. So much for the matter of Russian fidelity to treaties, which Putin always highlights when abroad. Perhaps it will now occur to some people in Berlin that present German energy policy is extremely dangerous in political terms – apart from the fact that it is heading off into the realm of utopia in technical terms. Such attempts at blackmail, which involve more than just money, can be parried if one can take countermeasures. This also happened: The German Ministry of Transportation promptly withdrew flyover and landing rights for Russian air carriers. This is where the German scandal begins in this story. For Transportation Minister Wolfgang Tiefensee of the Social Democratic Party of Germany (SPD) then lifted his sanctions no sooner than he had announced them – apparently upon the intervention of SPD Chairman Kurt Beck, who in this case was acting as minister president of Rhineland-Palatinate. He’s concerned about Frankfurt-Hahn Airport, which brought economic upswing to a structurally weak region of his state, but lives only from two clients: the budget airline Ryanair and the cargo planes of Russia’s Aeroflot. A minister president is elected to guarantee the interests of his state. Going beyond that, a federal minister is supposed to be able to recognize whether a decision involves a few euros or roubles or whether Germany’s ability to act in questions of foreign policy is also at risk. For the rest, the chairman of a party in the governing coalition should have a broad enough world view to see that there are things more important than promoting the infrastructure of an agricultural expanse. This is not a provincial posse: This is a political failure with considerable consequences.

Source: Die Welt on-line, November 1, 2007

Aeroflot’s Permission to Land Reinstated Politicians Intervene in Flyover Rights Dispute Lufthansa Cargo Must Still Fly Around Russia Berlin – It is like a Cold Air-War: Lufthansa’s freight carrier subsidiary Lufthansa Cargo is still being refused permission to fly over Russia. And this although the withdrawal of landing rights for Aeroflot – introduced as a countermove – has since been lifted, apparently at the wish of Kurt Beck, chairman of the Social Democratic Party of Germany (SPD). According to the Federal Transportation Ministry, after flyover rights had been denied Lufthansa Cargo, Germany had initially refused right of entry for Russian cargo planes, but suspended this on Wednesday, in order “to create a basis for talks based on trust between the German and Russian sides.” The minister president of the German state Rhineland-Palatinate, Kurt Beck, is also said to have intervened with Minister of Transport Wolfgang Tiefensee (SPD), in order to allow the Russians to land at the Frankfurt-Hahn Airport in Rhineland-Palatinate and to protect the airport from suffering economically. Jörg Schumacher, the head of Frankfurt-Hahn Airport, confirmed for Die Welt that Rhineland-Palatinate’s Ministry of Economics had pointed out to those responsible in the Federal Ministry of Transportation in Berlin that “considerable economic damage for the airport and the region could result” if the refusal to grant the Russians permission to land were maintained. The spokesman said the airport would of course support any further decision by the Federal Ministry of Transportation, which is at present negotiating intensively with the Russians. On Wednesday morning, three Aeroflot DC10s landed at Frankfurt Hahn and unloaded their cargo. At the same time, the national Russian air control authority explained that it had not refused Lufthansa Cargo flyover rights. “The previous agreement expired on October 27. A new application must be submitted,” said Timur Khikmatov, spokesman for the Russian Ministry of Transportation. “I don’t understand all the hysteria.” Lufthansa expressed outrage and rejected the Russian agency’s depiction of events: “Lufthansa submitted the application on time,” a spokesman for the company stressed. This application was rejected by Russia, he said. Just before the schedule change over the weekend, the rejection was confirmed yet again. Since 12 a.m. Sunday, Lufthansa Cargo has not been allowed to fly over Russian territory on the way to the important hub of Astana in Kazakhstan. The spokesman said Lufthansa Cargo must now take into account expensive detours, in order to get its cargo planes to Astana and Tashkent in Uzbekistan. The company uses the airport in Astana as a distribution hub for all of Asia. According to David Henderson, spokesman for the Association of European Airlines, each European airline must negotiate fly-over fees with the relevant Russian authorities on an individual basis. In order to secure economic advantage, the competitors have therefore not closed ranks to protest Russian fees, which are comparatively high by international standards. Meanwhile, Member of the Bundestag Harald Leibrecht of the Free Democratic Party accused the Federal Government of failure in the dispute with the Russians. At the recent government consultations, German Chancellor Angela Merkel of the Christian Democratic Union and Russian President Vladimir Putin had emphasized how good bilateral relations were. The dispute over fly-over rights reveals that this is eyewash, Leibrecht said. With AP.