Andrew Doyle/BEIJING

Air China says global alliance membership is a key element of its long-term strategy, but that a new codeshare deal with Lufthansa does not necessarily mean it will opt for Star. Air China president Wang Li'an says it has made "co-operation with other airlines its long-term strategy for development", and that the Lufthansa deal "is an important step in this respect". But he says state-owned Air China "has no plans to join any airline alliances right now".

China's major airlines have in any case put alliance decisions on hold, pending a Beijing-inspired industry restructuring which should see three main groups formed around Air China, China Southern and China Eastern. Air China deputy general manager, passenger transportation, Zhang Lan, says its will take time for Chinese passengers to embrace the alliance concept, and that even codesharing "is quite new".

China also fears its airlines will face tough competition from foreign carriers as markets are liberalised following its planned entry into the World Trade Organisation (WTO), although Zhang says there should also be "more opportunities".

The deal with Lufthansa, which will see the pair codeshare between home markets, is the culmination of a relationship that began in 1989, when they set up the Aircraft Maintenance and Engineering (Ameco) joint venture in Beijing .

China is one of the few significant gaps in the Star Alliance network, and Lufthansa chairman and chief executive Jürgen Weber admits he "would be lying" if he denied that Air China was viewed as a potential recruit. But he stresses there are "absolutely no plans" to admit the carrier in the near future.

Weber hopes to open "inner-Chinese routes from Shanghai and Beijing". Air China's domestic routes are not part of the initial codeshare deal, but should be added in the next two years.

Air China has been codesharing with Northwest Airlines for two years on transpacific routes.

• Shandong Airlines, based in Jinan in north-western China, is planning to buy the smaller Shanxi Airlines, based in the northern city of Taiyuan. Shandong, which was established in 1994, operates a mixed Boeing 737-300/Saab 340 fleet, and has Bombardier CRJ200s on order. Shanxi, founded in 1988, has three Xian Aircraft Y-7s.

Source: Flight International