Lufthansa and Etihad Airways Deals on Maintenance

Lufthansa and Etihad Airways Deals

Lufthansa and Etihad Airways deals on maintenance and meal matters. Etihad Aviation Group and Lufthansa German Airlines announced this week a new trade association that includes a four-year contract worth USD 100 million and other maintenance, repair and overhaul.

The offers mark the beginning of more partnerships between the two airlines, with a joint venture possibly being the next step. The two airlines also seek to boost cooperation in sectors such as freight operations, acquisitions and passenger services.

"We see this as a first step in developing new opportunities. Both senior teams met this morning to discuss other ways we can develop and strengthen our partnership over time," said James Hogan, President and CEO of Etihad Aviation Group.

He added that Germany was "a critical market" for Etihad, and is one of the airline's largest exit markets. As part of the new partnership, the four-year catering agreement will see Lufthansa's LSG Sky Chefs offer catering services to Etihad Airways in 16 cities across Europe, Asia and the Americas. This will make LSG the largest provider of catering services to Etihad outside the latter's base in Abu Dhabi.

Etihad also signed a memorandum of understanding with Lufthansa Technik to explore cooperation in maintenance, repair and overhaul services in Etihad and its equity partners. The agreement will seek to create synergies with Etihad Airways Engineering.

Last year, Etihad and Lufthansa started working together, and have since announced a code-sharing agreement covering four routes. The code share will give Lufthansa greater market access through India via Abu Dhabi, and will give Etihad greater access to South America via Germany.
Speaking at a news conference in Abu Dhabi, Hogan, who last week announced he would step down in the second half of this year, said Etihad was looking beyond code actions for partnership agreements.

It stood firm in its position on Etihad's partnership strategy after the airline could not stop the losses in two of the companies in which it acquired shares; Air Berlin and Alitalia. He said that Etihad had "a great track record with our own partnership to reach the reach of the network."
"Our partnership strategy, which delivers 5.5 million passengers a year through our network, is a critical element of that strategy, as shown in the announcement of today's society.The board of the group and our shareholders, The Abu Dhabi government, support this strategy, but we will continue to refine and refine the strategy to react to market conditions and challenges as we have always done, "Hogan said.

Speaking to reporters afterwards, he described 2016 as a difficult year, but did not reveal details about the airline's performance. Hogan, however, said key performance indicators "were certainly achieved."

He said that Etihad will still have to mitigate the challenges in 2017 and manage its costs "very closely."
Also looking at the outlook for 2017, Carsten Spohr, president and CEO of the Lufthansa Group, said he expects to see rationalization in the GCC aviation sector.

"I am convinced - as someone who has been in this industry for many years - that we will see a phase of more consolidation in Europe in the coming years. I am also convinced that we will see a phase of more rationalization in this part of the world, in the Gulf I think this industry needs to see a healthier relationship between supply and demand and I am optimistic that we will see this in the next few years, "he said. Lufthansa and Etihad Airways Deals are worth more than money since two airlines known as large carrier in the world.