Lufthansa to pursue Air China venture

Lufthansa Chief Executive Officer Carsten Spohr delivers a speech in front of an A380-800 aircraft at the Lufthansa Technik facility in Frankfurt, Germany.[Photo/Agencies]

Deutsche Lufthansa AG Chief Executive Officer Carsten Spohr will travel to Beijing with German Chancellor Angela Merkel next week in a bid to seal a joint venture deal with Air China Ltd seen as crucial to bolstering his company's access to the world's second-largest economy.

Spohr will meet with senior management from the Chinese flag carrier with the aim of making progress on the commercial pact, the CEO said in Dublin, adding that the talks are "complex".

Lufthansa is pursuing joint ventures as part of a plan to stem the loss of lucrative long-haul traffic to fast-growing rivals from the Persian Gulf. Such deals allow partners to coordinate capacity and share revenue and represent the closest accords possible in the industry short of full-scale mergers.

A final agreement with Air China would complete Lufthansa's roll call of accords covering all of its main long-haul markets, though the plan is running behind schedule, with the signoff having originally been targeted for last year.

Europe's third-biggest airline already has deals in place with Air Canada and United Continental Holdings Inc on trans-Atlantic flights and with ANA Holdings Inc in the Germany-Japan market, and in November announced a tie-up with Singapore Airlines Ltd from the city state to Germany and Switzerland.