Germany's biggest airline Lufthansa plans to sign a joint venture contract with Air China later this month, rounding off over two years of negotiations, two people familiar with the matter said.
Germany’s biggest airline Lufthansa plans to sign a joint venture contract with Air China later this month, rounding off over two years of negotiations, two people familiar with the matter said.
Lufthansa Chief Executive Carsten Spohr will travel to Beijing for a ceremony with China’s flagship carrier on Sept. 20, according to one of the people who is involved in the deal and did not want to be identified before it is formally announced.
The firms signed an agreement in principle in July 2014 to work towards a joint venture allowing them to share revenue on certain routes by selling tickets for each others’ flights.
Such arrangements allow airlines to work together on routes and pricing, while sidestepping foreign ownership rules that prevent them from merging.
“We are on the home stretch. We are confident that we will have this squared away soon,” a spokesman for Lufthansa said, while declining to say when a deal would be signed. An Air China spokeswoman did not respond to requests for comment.
When Lufthansa signed the accord in principle in July 2014 the German carrier said it hoped the deal would improve its position in China, the world’s fastest growing aviation market.
Spohr warned at the time that it could take until 2016 before the joint venture was fully up and running due to the time needed for antitrust approval.