Lufthansa has signed a route sharing deal with China's flagship carrier Air China. As Sonia Legg reports, it caps two years of talks and will boost Germany's biggest airline's access to the world's fastest growing aviation market.
It's normally a handshake that seals the deal. But Lufthansa and Air China adopted a more hands-on approach to business when they signed a new route-sharing agreement. They've been friends for decades but this new tie-up isn't far from a full scale merger. (SOUNDBITE) (English) LUFTHANSA CHIEF EXECUTIVE, CARSTEN SPOHR, SAYING: "We are now having a joint venture partner in the second most important aviation market in the world and it adds new dimension of the partnership with Air China, creating new benefits for the customers and bringing Air China and Lufthansa together even closer." The companies will share revenue by allowing them to sell each other's tickets on some routes. The deal also covers Austrian Airlines and Swiss Air - both Lufthansa units. (SOUNDBITE) (English) LUFTHANSA CHIEF EXECUTIVE, CARSTEN SPOHR, SAYING: "We are now expanding the joint venture to all routes between Europe and China, operating by the two carriers. It complements the group of joint ventures Lufthansa has around the world, and it was always our strategic goal to have a joint-venture partner in the top five intercontinental markets, and today's joint venture completes that set so I'm very happy." It won't take off until next summer and no cash investment was involved. But there is plenty at stake. European air traffic has been slowing. Lufthansa hopes the deal will help it fight off competition from Gulf carriers and improve its position in the Chinese aviation market.