Intercultural Business News

Emirates has offered flights from Germany to South Africa and Singapore for less than competing German airlines. Germany has demanded they increase their fares, which some say gives Lufthansa an advantage.

A branch of the German Ministry of Transport, Building and Urban Development has forced Dubai-based airline Emirates to raise its ticket prices on flights from Frankfurt to Johannesburg, and from Hamburg and Berlin to Singapore.

Other airlines from outside the European Union are affected by the action, but ministry spokesman Ingo Strater did not say which ones. Emirates has complained about the action and claims to have brought its case to the European Commission in Brussels.

Will Lufthansa Benefit From Forced Price Hike?

German air traffic law does not allow airlines based outside the EU to offer flights destined for non-EU countries at lower prices than their European competitors. Neither does European law. The action was a result of random spot checking of prices, according to Strater.

“EU airspace is liberalized, but that doesn’t apply to non-EU airlines,” he said.

One function of the Ministry of Transport, Building and Urban Development is to ensure there are no “market disturbances” or “lasting impairments” to the interests of public transportation.

Read More>DW-World

Japan Airlines (JAL), which may have only enough cash to fund ten more days of operation, could be allowed to go bankrupt if a rescue package does not emerge quickly, the Government hinted yesterday.

The scramble to secure a viable future for JAL is primed to trigger turmoil throughout the global airline industry as rival alliances lunge for its extensive collection of international routes. For carriers in the United States, JAL’s crisis represents a rare opportunity to extend their foothold in the Asian market.

An American Buyout Poses Threat To One World

Two cash-injection offers, each worth more than $1 billion (£596 million), are now on the table for JAL as American Airlines and Delta Airlines vie to buy the critical partnership. If Delta could lure JAL to the SkyTeam alliance, analysts said that the move would deal a heavy blow to British Airways and other members of the OneWorld grouping.

Despite the offers, however, the market remained focused on the risk of bankruptcy. Yesterday’s surprise change of position by the Japanese Transport Minister could herald something most Japanese thought they would never live to witness: the Government allowing a national flag carrier to fail, exactly 22 years since it was privatised amid a great fanfare.

Read More>Times Online

Deep in the Ibaraki backwaters, far from anything useful and tucked at the end of an orchard-lined B-road, workmen are putting the finishing touches to a beautiful Japanese disaster: an international airport with (almost) no planes.

Pitched ambitiously as “a third hub for Tokyo”, the nearly completed airport may represent one of the twilight lunacies in Japan’s 30-year obsession with public spending.

The country’s addiction has created a public debt mountain worth nearly 190 per cent of GDP and a wasteful network of roads to nowhere, suspension bridges over mountain streams and dozens of “zombie airports”.

Tokyo's New Third Hub Is 80km away!

As the country’s 99th airport, Ibaraki is nowhere near Tokyo, doomed to make losses from the outset and the passenger projections that were used to justify its construction were almost certainly plucked from thin air. Its opening comes as most regional airports are in the red and more than 70 per cent of domestic routes are being run below their break-even levels of passenger numbers.

 
But it is unfair, according to Ibaraki airport’s future managers, to describe the £180 million hub (the military provided the runway) as a total failure. Yes, it has no public transport system ready to connect the place with the outside world; yes, Tokyo already has two huge airports with expanding capacity; and, yes, Japan Airlines and All Nippon, the domestic carriers, refuse to touch it with a bargepole.

However, the “open gateway to Asia” will be handling one small aircraft per day. The precious flight — owned by Asiana, the South Korean carrier — will fly in from Seoul and then make the return journey. People might use the daily flight, Land Ministry officials suggest, to fly over and play golf.

Read More>Times Online

Toyota, the world’s biggest carmaker, has unexpectedly clawed its way back to profit after a summer of scrappage incentive schemes in the US and Europe and a round of ferocious cost cutting. But the company was swift to quash any premature optimism over the state of the American car market, where it said conditions were still “very severe” and the company is battling to limit the damage of a 3 million-vehicle recall.

The company is also mulling over plans to significantly bolster its research and development presence in China – a market that it has failed to exploit with anything like the efficiency it has penetrated Europe and the US. The local R&D base would supposedly allow the Japanese company to better tailor its vehicles to the local market.

Toyota Boosted By Scrappage Scheme

Toyota’s return to profit followed the announcement on Wednesday that it would leave Formula One racing before the 2010 season begins – a move that may save the company about $300 million (£181 million) a year, but which will cause an estimated $200 million of international brand exposure to vanish overnight. The company’s tearful public withdrawal from the sport, said analysts, portends further aggressive cost-cutting.

The glimpse of Y21.8 billion (£146 million) of black ink at the end of the July to August quarter was a welcome surprise for investors, but is unlikely to prevent the carmaker from logging its first full year of losses since Toyota switched from making sewing looms to cars 60 years ago.

Read More>Times Online

The British oil giant BP will today take control of Iraq’s biggest oilfield in the first important energy deal since the 2003 invasion. The move has created uproar among local politicians invoking resentful memories of their nation’s colonial past.

The agreement to develop the Rumaila field, near the southern city of Basra, will potentially put Iraq on the path to rivalling the riches of Saudi Arabia within a decade — if the Government can fend off corrupt officials, continuing terrorist attacks on pipelines and political uncertainty.

BP Aims To Bring Iraq On A Par With Saudi Arabia

Many Iraqi MPs say that the deal is illegal, and that the constitution should give them, not the Oil Minister, the final say over the country’s vast resources.

BP will develop the field, believed to hold about 17 billion barrels of oil, with CNPC, a Chinese oil producer and supplier. Along with other agreements to be signed this year, BP’s presence is forecast to increase Iraqi production from 2.5 million barrels a day to 7 million in about six years.

Read More>Times Online