Lufthansa, Etihad said to deepen ties in catering, maintenance

Deutsche Lufthansa AG and Etihad Airways plan to expand ties to include deeper cooperation in catering and potentially aircraft maintenance, people familiar with the discussions said. The carriers are in talks for Lufthansa to team up on the food services it provides to Etihad flights and also plan a memorandum of understanding related to aircraft repair and overhaul, said the people, who asked not to be identified before a public announcement. An agreement is possible in the coming days, they said. The cooperation could also expand to include ground handling and security services in some regions, as well as flight dispatch and supply-chain operations, one of the people said. The talks are ongoing and details as well as timing of announcements could change, they said. Etihad Chief Executive Officer James Hogan will host an event with his Lufthansa counterpart Carsten Spohr on Wednesday in Abu Dhabi, according to an invite released Sunday. The companies didn’t say what the event will be about and declined to comment further. Deeper ties with Lufthansa could be seen as a victory for Hogan before he steps down in the second half of 2017. Hogan has been under pressure as partners Air Berlin Plc and Alitalia SpA continue to lose money, prompting Etihad to repeatedly funnel funds to the two carriers. The Abu Dhabi-based airline is also cutting jobs due to slowing demand. Lufthansa, which has previously criticised state support for the expansion of Middle East airlines, reversed course in recent months after agreeing to lease 38 aircraft from Air Berlin. That deal was accompanied by an agreement between Etihad and Lufthansa to code share on four routes and explore additional cooperation. Etihad has been working with Lufthansa’s information technology arm since 2007, and with its maintenance unit since 2009. LSG serves all the major Gulf airlines at various stations around the world. Outside of Turkey, LSG’s only presence in the Middle East so far is in Cairo. (Richard Weiss and Deena Kamel Yousef/Bloomberg)

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