Etihad Airways and Lufthansa signed a multi-faceted commercial partnership agreement Wednesday that will see the two companies cooperate via codeshares and across catering and MRO services.
The agreement was signed in Abu Dhabi Feb. 1 by Etihad Aviation Group president and CEO James Hogan and Lufthansa Group chairman and CEO Carsten Spohr.
It follows a deal agreed between the two late last year in which airberlin, an Etihad Aviation Group partner airline, will wet-lease 38 narrowbodies to Lufthansa Group, most of which will be operated by Lufthansa’s Eurowings low-cost carrier (LCC). Etihad has a 29% stake in airberlin.
Today’s agreement reaches far wider across the two company’s businesses and Spohr indicated it has the potential to eventually become a full joint venture.
The business environments for both Abu Dhabi-based Etihad Airways and Frankfurt-based Lufthansa, as well as their group airlines, has been challenging with increased LCC competition coming on top of strong competition from the consolidated US majors and rival European airline groups Air France-KLM and International Airlines Group.
The four-year catering contract will see Lufthansa’s LSG Sky Chefs unit provide catering services to Etihad Airways in 16 cities in Europe, Asia and the Americas. It will make LSG the largest provider of catering services to Etihad outside its home base.
A memorandum of understanding between Etihad and Lufthansa Technik will pursue cooperation in maintenance, repair and overhaul (MRO) services across Etihad Airways and its airline equity partners. Together, the catering and MRO agreements were said to be worth $100 million.
The CEOs said at a press conference in Abu Dhabi that Etihad would also move its locations at Frankfurt and Munich airports to Lufthansa terminals.
“This partnership is the platform for a much wider strategic collaboration between our two organizations,” Hogan said.
Spohr added that partnering with the Etihad Aviation Group “fits perfectly the Lufthansa Group’s global strategy for our passenger airlines and service companies.”
Further cooperation areas are being looked at, including freight operations, procurement and passenger services, the airlines said.
The previously announced codeshare between the two airline groups goes on sale from Feb. 1 for flights between Abu Dhabi and Germany. Lufthansa will place its LH code on Etihad Airways’ twice-daily flights between Abu Dhabi and both Frankfurt and Munich. After government approval is given, Etihad will put its EY code on Lufthansa’s long-haul, nonstop intercontinental services between Frankfurt and Rio de Janeiro and Bogota.