• Announcements in Abu Dhabi regarding cooperation plans
• Chief executives of Etihad and Lufthansa, James Hogan and Carsten Spohr address media
• Hogan will leave Etihad later this year
• The two airlines last month signed a code share pact
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3.05pm: That is it for our live updates now, but we will have more in-depth coverage on the announcements at www.thenational.ae/business later today. Thank you all for joining us.
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2.55pm: A few more details before we sign off then:
- Etihad Airways and Lufthansa are also exploring further cooperation in a number of areas, including freight operations, procurement and passenger services to improve their competitive offering globally and in the European market
- The previously announced codeshare between the two airline groups goes on sale today for flights between Abu Dhabi and Germany
- To facilitate both connectivity and the customer experience associated with this codeshare, the Abu Dhabi-based airline will also move its operations at Lufthansa’s hubs, from Terminal 2 to Terminal 1 in Frankfurt, and Terminal 1 to Terminal 2 in Munich.
James Hogan speaks at the conference at Emirates Palace. Sananda Sahoo / The National
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2.30pm: Etihad and Lufthansa have concluded a $100 million agreement in global catering and signed a memorandum of understanding for cooperation in plane repair and overhaul, they said on Wednesday at a press conference in Abu Dhabi.
The agreements build on recent announcements regarding joint ticket sales and aircraft leasing.
The catering deal is for four years and will see Lufthansa unit LSG Sky Chefs provide catering services at 16 cities outside of Etihad’s hub at Abu Dhabi.
The two have also signed a memorandum of understanding for Lufthansa Technik to explore opportunities for maintenance at Etihad and the airlines in which it holds equity stakes.
Etihad chief James Hogan, who plans to stand down later this year, said the accords are “the most significant” struck by the Middle Eastern carrier outside of its so-called “equity alliance” of minority shareholdings.
Etihad and Lufthansa began working together last year, announcing a code-share agreement covering four routes and brokering a deal for Air Berlin to lease surplus planes and crews to the larger German carrier.
* Bloomberg and Reuters
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2.15pm: Ok. The questions have finished. We will give you a summary of all that we have learnt shortly.
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2.07pm: Will this become a full joint venture eventually? Will views on Gulf carriers change? Spohr: "This marks the beginning of more partnerships. With subsidies it is our view that we treat this industry as if it is part of WTO. But still we move ahead."
What is the difference in today’s agreement and those between Etihad and its agreements with other airlines? Hogan: “This is not an equity partnership. It is a codeshare with a strong catering and engineering platform. We will see how our network airlines align.”
Will Lufthansa have an MRO base in the Middle East, say Abu Dhabi? Spohr: “We have activities at Dubai South but that is not part of today’s partnership.”
Etihad in 2016 and its restructuring, will it improve in coming years? Hogan: “The results for 2016 have not been released yet but the key KPIs were achieved. The restructuring is about strength. The business needs to accelerate and adjust.”
Have you discussed how you can tackle protectionism? “We are the good guys of globalisation,” says Spohr. Hogan: “We have dialogues with the GCAA who have dialogues with the EU. It shouldn’t be about politics, it should be about economics and jobs.”
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2.05pm: To summarise, Lufthansa is to provide catering for Etihad in 16 cities worldwide.
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2.03pm: Hogan: "These are important steps forward in catering and engineering. We are delighted to have Lufthansa as a partner."
A signing ceremony will now take place before questions are posed.
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2.00pm: Spohr: "Lufthansa has always been an opponent to state subsidies. Our position on this has not changed. We can have different perspectives and still have a successful partnership."
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1.55pm: Carsten Spohr has now taken the mic. He says Lufthansa will also provide maintenance services with an MoU between Etihad and Lufthansa Technik being signed. "It's an honour to have Etihad as a new partner," he says.
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1.52pm: Hogan is now explaining Etihad and Abu Dhabi's position in the industry. "It was clear we could build our partnerships with Lufthansa in a way that would benefit both airlines. The codeshare will open up new choices for travellers. We will go beyond codeshare. Today, we are announcing a four-year catering agreement. Lufthansa will be the largest provider of catering services to Etihad outside Abu Dhabi."
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1.49pm: Hogan says it is "a major step in one of our significant partnerships".
A few words on his own position: “It is important to say a few key words. This was part of a long-term process ... A smooth transition. The core pillars of our strategy remain in place. We will continue to refine the strategy in relation to market conditions. This has helped us to grow successfully in the past 10 years.”
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1.48pm: Introductions are being made in English, Arabic and German.
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1.45pm: And we're now under way as Hogan and Spohr are seated. Ahmed Al Sayegh, who is on the Etihad board and is chairman of Abu Dhabi Global Market, is in attendance.
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1.30pm: James Hogan is here at the Emirates Palace hotel and is venturing into the room where the press conference will take place.
Mustafa Alrawi / The National
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1.20pm: For those of you not in the know, here's a quick history of Lufthansa:
The German airline traces its roots back 91 years. Its first incarnation began with the formation in 1926 Berlin of Deutsche Luft Hansa - literally, German Air House. After the Second World War, Allied forces suspended the carrier’s services. Then in 1953 Aktiengesellschaft für Luftverkehrsbedarf - literally, Company for Air Transport – was created in Cologne. At the time foreign powers controlled West German airspace, so this venture was highly provisional. But its backers pressed forward and that same year they ordered four Lockheed L-1049 Super Constellations planes and four Convair CV-340s. The new carrier included many staff from the old one, so it was only natural that they bought rights to the predecessor company’s name, colours (blue and yellow) and logo (which dates to 1918 and depicts a crane in flight). The reborn airline’s first flights connected West German cities. On April 1, 1955, scheduled services began with lift-offs from Hamburg and Munich. The inaugural route map also included Cologne, Dusseldorf and Frankfurt. Lufthansa’s wings spread to London, Madrid, New York and Paris in 1956. Early destinations also included Baghdad and Tehran.
The airline could not fly to Berlin, as it was banned from so doing by the wartime victors – Britain, France, the Soviet Union and the US – that retained control of the divided city.
The subheadings on Lufthansa’s Wikipedia page encapsulate its history since those early years:
1960s: Introduction of jetliners
1970s-1980s: The wide-body era
1990s-2000s: Further expansion
2010s: Belt-tightening
Note that on October 28, 1990, shortly after the reunification of the two Germanies, Lufthansa resumed service to Berlin after a gap of 45 years.
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1.10pm: The doors are open and there's 20 minutes until proceedings start.
Mustafa Alrawi / The National
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1.02pm: Etihad was in the news yesterday when it revealed a deal worth US$1m with the Thai tourism agency to promote the South East Asian country in Europe and the Middle East.
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1pm: Good afternoon and welcome to our live updates from Etihad and Lufthansa's joint news conference. Lufthansa said on Sunday that the event would cover "future cooperation", while both airlines have confirmed that their chief executives, James Hogan and Carsten Spohr, will be speaking in Abu Dhabi. Hopefully Mr Hogan will shed some light on Etihad's future strategy after the announcement that he is to depart in the second half of the year, while it is possible that we could hear about any further impact from Donald Trump's US travel ban on immigrants from seven Muslim countries.
Etihad chief James Hogan. Fatima Al Marzooqi / The National
Meanwhile, here’s some quick background information on Etihad’s connections with Lufthansa:
In December, Etihad signed an agreement with the German airline to code share on some flights between the UAE, Germany and South America.
This came about despite Lufthansa being one of the European airlines to have complained about Gulf airlines’ alleged anti-competitive practices in the long-running row over “open skies” policy.
Etihad also confirmed a "wet lease" deal between Lufthansa and airberlin, under which two Lufthansa airlines, Eurowings and Austrian Airlines, take over full operation and maintenance of 38 aircraft formerly flown by Etihad partner airberlin. The deal is expected to bring a much needed financial lifeline to loss-making airberlin, and was approved by the German cartel office on Sunday.
Lufthansa will lease 38 crewed planes from smaller rival airberlin under a deal signed last year. Sean Gallup / Getty Images
Etihad currently has code share deals with 51 airlines around the world, but the deal with Lufthansa is potentially the biggest and most significant.
To read more on the initial Etihad and Lufthansa code share deal, click here
To read more on James Hogan stepping down from Etihad, click here
And if you are really in the mood for some aviation, here’s a quiz question to test your brain power:
Below are four cities to which both Abu Dhabi-based Etihad and Frankfurt-based Lufthansa fly. Rank them in order of how nearly equidistant they are from the airlines’ respective bases. (In other words, your first-ranked city will be the one with the smallest difference between flight time from Abu Dhabi and flight time from Frankfurt.)
a) Astana
b) Cairo
c) Lagos
d) Sao Paulo
Answer: Cairo is nearest to equidistant (it lies about 560km farther from Frankfurt), followed by Lagos (about 900km further from Abu Dhabi), Astana (about 980km further from Frankfurt) and lastly Sao Paulo (about 2,290km further from Abu Dhabi).
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