Cargo waiting in the wings as Lufthansa and Etihad partnership focuses on catering and MRO

Lufthansa and UAE national carrier Etihad have signed a non-equity partnership with an initial focus on in-flight catering and aircraft maintenance, although cargo is not on the menu at this stage.
Etihad Aviation Group president and chief executive officer James Hogan, and Carsten Spohr, Lufthansa Group chairman and chief executive, signed two key deals that will see the German aviation group’s LSG Sky Chef provide inflight catering for the UAE-partner in 16 cities across Europe in an initial four-year contract, the Americas and Asia.
Lufthansa Technik, an independent provider of maintenance, repair and overhaul services (MRO) for civilian commercial aircraft, will also work closely with Etihad, which has its own MRO capability.
The top bosses of Lufthansa and Etihad, which today launched a codeshare agreement for passenger services, did not mention cargo as part of the partnership deal, although both men indicated that today’s announcement was only the start of a collaboration that is expected to “develop further opportunities”.
Spohr said that “partnering and partnership is in the DNA” of Lufthansa, referencing airline agreements with United, Air China and Singapore, and also including the recent airfreight alliance with Cathay Pacific that will see both carriers move under one cargo roof at Hong Kong and Frankfurt.
But Spohr did not duck the issue of alleged state subsidies among Middle East carriers, citing Lufthansa’s reputation for “trust, openness and fairness” in business relationships, mentioning that the Middle East Gulf states are not parties to the World Trade Organisation agreements.
He stated his “opposition to state subsidies” and that Lufthansa’s management “stands firm on that position”, while continuing: “We can have different perspectives on certain topics but still be successful partners.”
Spohr then added that he foresaw increased consolidation in Europe’s airline business and “more rationalisation to come in the Gulf”, without expanding on the topic.
In a question and answer session, Spohr said that the two airlines would “look into more intensive elements” of their new partnerships at a later date, and did not rule out an equity-based joint venture “and some other ideas” which may be discussed.
Hogan, who is due to step down from his current Etihad role in the second half of 2017, said that airline partnerships should be looked at in terms of “connectivity, jobs and economic contribution”, and that “it should not be about politics”.
In mid-January, Etihad issued a statement denying that it was in talks to take a stake of between 30% and 40% in Lufthansa.

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