Dubai’s Emirates has signed a ten-year agreement with a subsidiary of German rival Lufthansa to overhaul the landing gear of its Boeing 777-300ER fleet, a sign of growing closeness between the two major rivals.
The decade long agreement will be on a non-exclusive basis and will take place at Lufthansa Technik’s unit in Hayes, near London.
“Emirates being the 777-300ER worldwide fleet leader, our requirements for landing gear overhauls are strategic as they become due every ten years on each aircraft in accordance with the maintenance program,” said Adel Al Redha, Emirates’ executive vice president and chief operations officer.
“In order to maintain the highest levels of reliability and quality for our operations, we expect our suppliers to provide the most robust supply chain solutions. Following our successful experience with Lufthansa Technik on previous programmes, we are confident that this new agreement will deliver on these goals,” he added.
The Dubai carrier first signed a repair and maintenance contract with the Lufthansa offshoot in 2005 to provide services for the 21 Emirates’ 777 “classic” aircraft (-200/-200ER/-300).
In 2010, the two signed another overhaul service contract for the centre landing gears of the Emirates’ A340-300 fleet and the latest deal is a continuation of this partnership.
The move is evidence of a continued easing of tensions between the two large rival carriers.
At the Dubai Air Show in November 2013 Lufthansa officials hinted that they could hold informal talks with Emirates over a possible alliance.
Speaking on the sidelines of the show, vice president for Southern Europe and Middle East Carsten Schaeffer said that any tie-up would have to be a “win-win” for both parties.
“We’re always open for discussions but it has to be a win-win for everybody,” he said.
“There’s a lot of coffee being had here somewhere. We might be competitors but we continue to talk. We know it’s a smart group of executives, and they will use the opportunity to talk but there’s nothing tangible to announce at this point.”
Lufthansa, a member of Star Alliance, currently serves Dubai International with four daily flights.
In early 2013, outgoing CEO Christoph Franz said that Lufthansa had evaluated the possibility of a Gulf tie-up “several times” but had not deemed it currently beneficial.
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Emirates, the largest international airline by passenger traffic, is one of the world’s fastest growing carries and has gobbled up market share once prized by European legacy carriers.
“They’re fast growing and they’re capturing a lot of the new markets,” said Schaeffer.
In May 2013, Emirates president Sir Tim Clark has said he would not rule out an alliance with the German national carrier, despite years of disagreement with the government over landing rights.
However, he said the European legacy carrier would have to change its business model, Clark said.
The Dubai-based carrier has for years been involved in a bitter dispute with the German government over the right to fly to Berlin, on top of four other German cities.
It claims the refusal to open up the capital amounts to protectionism, while former Emirates executive vice chairman Maurice Flanagan has also accused Lufthansa of encouraging Canada to block Emirates’ expansion into the North American country.
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“Lufthansa hates us with a passion,” Flanagan said in 2012.
But at the Arabian Travel Market 2013, Clark said relationships in the international aviation industry were changing rapidly and if Lufthansa modernised, Emirates would consider an alliance.
“It has been a difficult time but we move on and you never say ‘never’ to any bilateral commercial agreement that can be sustained over a period of time,” he said.
“The way the alliance structures [and] the relationships are starting to unglue [is changing the industry]. Who would have ever have thought that Air France, one of the bastions of per-determinism with regard to the Gulf carriers would open its doors and set up a code share with, in this case, [UAE national carrier] Etihad?
“Things are changing and if you see an adaptation or a change in the business models of these legacy players then anything is possible. But as long as their business models remain as they are, and I would say I’m not being too disingenuous [by saying this], rooted in years of – decades of – practices that are still evident today, it’s very difficult for them to consider perhaps doing business with the likes of Emirates.
“But it’s not impossible, things are changing, anything is possible. And as long as somebody in Lufthansa stands up and says ‘it’s a good idea to deal with Qatar, it’s a good idea to deal with Emirates and Etihad then you may find there’s a mesh of ideas. And maybe this could be the beginnings of something.”
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