The Lufthansa Group and Air China signed a wide-reaching partnership agreement in Beijing on September 20. The two aviation groups say it will enable them to jointly operate all connections between Europe and China as part of a commercial joint venture. This means that the two companies will implement what they agreed to do as part of a memorandum of understanding in summer 2014.
The joint venture aims to significantly expand their mutual code-sharing connections and enhance their commercial partnership. This will allow the Lufthansa Group to continue pursuing its partnership-driven Asia strategy. Following a joint venture with the Japanese airline All Nippon Airlines (ANA) and a joint venture with Singapore Airlines, which was signed in November 2015, this is now the Lufthansa Group’s third enhanced partnership in Asia.
Carsten Spohr, Chairman of the Executive Board and CEO of Deutsche Lufthansa AG commented: “As the flag carrier, Air China is the ideal partner for the Lufthansa Group in the People’s Republic of China. This ground-breaking joint venture will fundamentally strengthen our competitive position on routes between Europe and China. The significantly enhanced partnership will enable us to create additional benefits for customers. The Chinese aviation market is one of the most important growth markets worldwide. We want to profit from this growth together with our Star Alliance partner Air China.”
Cai Jianjiang, Chairman of Air China, said: “The Joint Venture with Lufthansa and the Lufthansa subsidiaries Austrian Airlines and Swiss International Air Lines is another major steps of Air China’s globalization strategy following Air China’s accession into Star Alliance in December 2007. Both parties can further strengthen our overall competitive edge in both China and Europe. Under the Joint Venture framework, we will further expand network coverage in China and Europe, enhance the flight connections in beyond markets and optimize flight schedules, enabling us to bring more and flexible flight choices, favourable fare products and seamless travel experiences.”
The move will lead to better coordination of the airlines’ flight timetables allowing them to provide customers with more convenient connections between their individual route networks. The two groups say they also plan to offer common fares, modify corporate programmes to improve the products available to corporate customers and examine the opportunities for optimisation with regard to existing connections in frequent flyer programmes.
In addition to Lufthansa and Air China, the agreement extends to the Lufthansa subsidiaries Austrian Airlines and Swiss International Air Lines.
The commercial joint venture is scheduled to commence at the start of the 2017 summer flight timetable.