Lufthansa, Air China sign ac­cord to op­er­ate Euro­pean routes

China Daily (USA) - - BUSINESS -

Deutsche Lufthansa AG and Air China Ltd signed a co­op­er­a­tion agree­ment that will en­able the two mem­bers of the Star Al­liance group to take on com­pe­ti­tion from the ri­val Skyteam part­ner­ship and boost earn­ings.

The flag car­ri­ers of Ger­many and China plan to share rev­enue on China-Europe routes when the ven­ture takes off next year, the two air­lines said in a state­ment dis­trib­uted in Bei­jing on Tues­day.

The joint ven­ture is the clos­est the two car­ri­ers can get un­der re­stric­tions on for­eign con­trol of Chi­nese air­lines.

The agree­ment, after two years of ne­go­ti­a­tions, gives Lufthansa and AirChina a bet­ter grip to op­er­ate China-Europe routes to­gether, after ri­val Skyteam mem­bers formed a part­ner­ship ear­lier. Air France-KLM Group al­ready has joint ven­tures with Skyteam al­liance part­ners China South­ern Air­lines Co — the big­gest Asian air­line by pas­sen­gers — and China Eastern Air­lines Corp that in­volve timetable har­mo­niza­tion and cost- and rev­enue­shar­ing on some routes.

The deal will help Air China re­duce its re­liance on the do­mes­tic mar­ket, which ac­counts for more than 60 per­cent of rev­enue.

Lufthansa and Air China plan to co­or­di­nate flight sched­ules un­der the ven­ture whose pre­lim­i­nary agree­ment was an­nounced in 2014.

The part­ner­ship will al­low Lufthansa to ex­tend its reach in a coun­try poised to over­take the US as the world’s largest air-travel mar­ket.

It also adds to Lufthansa’s net­work of rev­enue-shar­ing agree­ments for ma­jor mar­kets as it seeks to fend off threats in­clud­ing from Gulf car­ri­ers such as Emi­rates and Qatar Air­ways.

The German car­rier last year struck a sim­i­lar rev­enue­shar­ing pact with Sin­ga­pore Air­lines.

AFP

Crew mem­bers of a Lufthansa Air­bus dressed in typ­i­cal Bavar­ian cos­tume pose at the air­field of Franz-Josef-Strauss Air­port in Mu­nich, south­ern Ger­many.

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