European Commission examines Etihad’s holding in Air Berlin

Air Berlin has denied being controlled by Abu Dhabi-based Etihad Airways after the European Commission said it was examining Etihad's investment in the German airline, to see if it complies with rules for operating an airline within Europe.

A spokesman for Siim Kallas, the European Union commissioner for transport policy, said today the Commission was looking at a number of non-EU investments in European airlines, including Etihad's stake in Air Berlin.

Air Berlin said Etihad did not control it and that the two only worked closely together as strategic partners.

“Strategic decisions are made by Air Berlin alone. As a shareholder, Etihad has neither a blocking minority nor special rights,” a spokesman said in a statement.

To obtain an operating licence in the EU as a European airline, a carrier must be more than 50 per cent owned and “effectively controlled” by an EU member state or EU citizens.

“Accordingly, the Commission has asked the member state concerned to provide further information on how these investments comply with the rules on ownership and control of European airlines,” the spokesman said in an emailed statement.

Etihad owns 29.2 per cent of Air Berlin, which is Germany’s second-largest airline but is struggling with debts and has twice postponed the publication of its 2013 results.

Etihad, which is building up a network of minority stakes in airlines around the world as it seeks to drive traffic to its Abu Dhabi hub, has provided loans to Air Berlin and bought a majority stake in its frequent flyer programme.

Etihad is also looking at the possibility of buying a stake in Italy's ailing Alitalia. (Reuters)