Air China and Lufthansa have signed a memorandum of understanding (MOU) to extend their existing partnership and form a commercial joint venture (JV). The JV will enable the two Star Alliance carriers to cooperate on some routes between China and Europe to take advantage of the growing demand for trade and passenger travel between the markets.
“The MOU should pave the way for the creation of a commercial joint venture between the German airline and Air China,” Lufthansa said in a statement. “The new partnership agreement should come into force as early as the start of the winter flight timetable in late October 2014.”
Lufthansa CEO Carsten Spohr said the agreement will lead to better flight connections and services between Europe and China.
Both sides will expand their collaboration in MRO services.
Air China and Lufthansa established a 60:40 aircraft maintenance JV Ameco Beijing in 1989. Air China president and executive director Song Zhiyong said the new JV “will facilitate Air China’s efforts in expanding international route network while enabling us to achieve win-win results and provide more travel choices and convenience to our passengers.”
Over the summer, Air China and Lufthansa will have a joint capacity input of 81 flights per week on the Sino-German routes. The two carriers currently codeshare on all flights between China and Germany, enabling them to expand network access to nine points in China and Germany, as well as destinations in Zurich, Spain and Brazil.
Air China currently operates 23 routes between China and Europe with 194 daily flights to 19 destinations in Europe—including London, Paris, Frankfurt, Vienna, Rome, Moscow and Madrid. In 2013, Air China transported 1.95 million passengers between China and Europe with an average load factor of over 80%.
The German carrier already has transatlantic joint ventures with United Airlines and Air Canada, as well as a JV with ANA on services between Europe and Japan.