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Etihad and Lufthansa signal closer co-operation

Etihad Airways and Lufthansa have signed agreements to co-operate in the fields of catering and maintenance as a first step of what the two airlines describe as a growing partnership.

The Gulf carrier has contracted Lufthansa unit LSG Sky Chefs to provide catering at 16 airports across Asia, Europe and the Americas. The four-year deal is worth around $100 million, the two airlines said during a joint press briefing webcasted from Abu Dhabi.

With MRO provider Lufthansa Technik (LHT), meanwhile, Etihad has signed a tentative agreement to "explore" opportunities for co-operation covering the Abu Dhabi carrier's fleet plus aircraft operated by its equity partner carriers. The memorandum also covers "opportunities for synergies" between LHT and Etihad's engineering arm.

Lufthansa Group chief executive Carsten Spohr says that several potential MRO contracts are under discussion, with a total volume in the three-digit-million range.

Etihad is already a customer of LHT. But outgoing Etihad Aviation Group chief executive James Hogan argues that the two airlines could realise "huge synergies" in the fields of procurement and technology development.

Further co-operation is being evaluated in other fields, including air freight and passenger services.

Hogan states: "This partnership is the platform for a much wider strategic collaboration between our two organisations." He adds that the tie-up is the "most significant non-equity partnership with an airline we have ever announced".

Spohr says establishment of a joint venture is a potential option.

A codeshare partnership disclosed in late 2016 – which covers, initially, Etihad's flights to Frankfurt and Munich – becomes effective today. Etihad will relocate its operations at the two Lufthansa hubs to the German carrier's terminals, and place its codes on Lufthansa flights from Frankfurt to Rio de Janeiro and Bogota as soon as government approval has been obtained.

Hogan indicates that the codeshare co-operation is set to be expanded. He says the existing network agreement represents a "first phase" through which Lufthansa will gain "increased access" to the Indian subcontinent, while Etihad benefits from the German carrier's European network.

Spohr revealed that the first Airbus A320-family jets of Etihad partner Air Berlin would be transferred on 10 February to Lufthansa budget unit Eurowings under a wet-lease deal the two groups arranged last year.

The wet-lease agreement is part of an Air Berlin restructuring programme under which the carrier's fleet will be halved around 75 aircraft and its network reduced to scheduled operations from Dusseldorf and the German capital.

Asked whether Lufthansa could potentially take over Air Berlin's remaining operations in future, Hogan said that Air Berlin's new chief executive Thomas Winkelmann – a former Lufthansa manager who assumed his new position today – had been given a mandate to "rebuild" the carrier's business. That, Hogan adds, will be Winkelmann's "immediate focus".

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