German tourism body blames aviation regulation for Air Berlin failure

BERLIN (Reuters) - German taxes and regulation have allowed foreign airlines to take market share from German carriers and contributed to the failure of Air Berlin (AB1.DE), Germany’s tourism trade body said on Thursday.

Air Berlin, Germany’s second-largest airline, filed for bankruptcy protection this month after shareholder Etihad Airways withdrew funding following years of losses.

“Conditions distorting competition allow foreign competitors to carve out an increasingly large part of passenger volume,” Michael Frenzel, President of the federal association of Germany’s tourism sector, said.

The association, which represents travel-related industries including tour operators, hotels and airlines, called on the German government to ease the burden of costs such as Germany’s air travel tax, which was introduced in 2010.

At the same time, Frenzel said the association had no interest in a national champion, after Germany’s Economy Minister Brigitte Zypries said she would welcome it if Lufthansa (LHAG.DE) took over substantial parts of Air Berlin.

“The days of big national carriers are over,” Frenzel said.

Tourism generates around 290 billion euros of annual revenues in Germany, accounting for around 3.9 percent of the economy and providing nearly 3 million jobs, according to the association.