A joint venture could be a potential next step, and there are other ideas. Modest Beginnings The initial accords between the carriers are modest, cheap fares with Lufthansas Sky Chefs arm set to provide in-flight food to Etihad at 16 cities worldwide under a$100 million contract. The Lufthansa Technik maintenance unit will also explore cooperation with Etihad Aviation Group and its partner carriers, according to Spohr, who said that deal may be worth more than 100 million euros. Hogan, who plans to stand down later this year, said the accords with Lufthansa are the most significant struck by his company outside of its investments inso-called equity alliance partners, and will form a platform for a much wider strategic collaboration. Spohr said the carriers still hold different perspectives on a range of topics and restated his opposition to the funding of airlines through state aid, something he has previously claimed helped Etihad and Gulf peers Qatar Airways and Emirates became major global players. All the same, the pair will be putting these differences aside, he added. Lease Deal Lufthansa is struggling to keep pace with network rivals includingBritish Airways owner IAG SA , in which Qatar Air has a 20 percent stake, just as discount operators led by Ryanair Holdings Plc eat away at its market share on short-haul routes. Etihad has failed to halt losses at Air Berlin Plc and Italian flag carrier Alitalia SpA , in which it has built up holdings as part of the equity alliance tying together eight carriers spanning Europe to Australia. Etihad and Lufthansa began working together in 2016,announcing a code-share -- or joint sales -- agreement covering four routes and brokering a deal for Air Berlin to supply 38 surplus planes and crews travel sites to the larger German carrier. The lease contract is worth 1.2 billion euros over six years, Hogan revealed, while Spohr said talks are underway about the addition of further code-share destinations as early as next winter. Etihad will also relocate terminals next to Lufthansa in Frankfurt and Munich to aid cooperation. Both carriers have announced plans for major Europe-Mideast initiatives in the past, only for them to fail to materialize. Etihad said in 2012 that a code-share pact with Air France-KLM Group could become a much larger strategic partnership, while Lufthansa and Turkish Airlines were exploring a deal as recently as September 2015.
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