Lufthansa in talks with Iran Air over catering, maintenance deals

• Lufthansa in talks to provide services to Iran Air
• Iranian holidaymakers shifting to Europe after US travel bans
• Lufthansa not in talks to expand codeshare with Etihad Airways 

DUBAI (Reuters): Lufthansa is in talks with Iran Air to provide catering, maintenance and pilot training as it seeks to take advantage of emerging business opportunities in the country, executives at the German airline group said recently.

Foreign companies have been vying for contracts in Iran since economic sanctions were lifted last year in return for Tehran curbing its nuclear program.

“We are in very, very intense discussions, actually almost on a weekly basis,” Karsten Zang, Lufthansa’s regional director for the Gulf, Iran, Pakistan and Afghanistan, said at a press briefing in Dubai.

However, a Lufthansa spokesman later told Reuters by email that “the talks with Iran Air are just held to explore business opportunities in the areas of catering and maintenance. There are however no concrete plans for a cooperation.”

Lufthansa Group subsidiaries LSG Sky Chefs, Lufthansa Technik and Lufthansa Pilot Training are seeking the contracts with Iran Air whilst the group is also in talks to provide services to other Iranian aviation firms, Zang said.

Iran has signed orders for 200 new Western-built aircraft for Iran Air, taking delivery so far of two new Airbus A330s and an A321.

“We are talking with Iran Air because their new aircraft are coming. They need training, of course, and we have the experience in all of these fields but we can’t give timelines,” Zang said.

The lifting of sanctions has not brought the economic boom to Iran that many foreign companies had hoped for.

Uncertainty over US President Donald Trump’s attitude to the nuclear deal, as well as remaining sanctions that limit international banking with Iran, are seen as deterring some would-be investors.

The Trump administration said on Tuesday it was launching a review of whether lifting remaining sanctions against Iran was in US national security interests, while acknowledging that Tehran was complying with the nuclear deal.

“We are hoping this business will pick up because the market as such is a huge market with high potential,” Lufthansa Group’s Senior Vice President for Sales Heike Birlenbach said.

Last year the group axed plans for its budget carrier Eurowings to launch a service to Tehran after deciding the demand was not there, although its other airlines Lufthansa, Austrian and Swiss already fly to Iran.

Trump’s executive orders, since blocked, banning citizens of some Muslim-majority countries, including Iran, from travelling to the United States has shifted travel flows to Europe as a holiday destination for Iranians flying with Lufthansa.

“It caused lots of insecurity for our customers,” Birlenbach said of the travel bans.

However, the airline has not seen any changes in demand for outbound US flights which continue to grow, she said, whilst a ban on taking electronic devices into aircraft cabins on direct flights to the United States from the Middle East had not brought more inbound passengers to the German carrier.

Emirates said on Tuesday bookings to Iran and the Indian Subcontinent had slowed since the first travel ban in January.

Birlenbach also said Lufthansa has no plans at present to expand a limited agreement to share route codes with Abu Dhabi’s Etihad Airways to include more destinations or to develop a revenue-sharing partnership.

Instead, the two carriers are focusing on the next stage of a maintenance memorandum of understanding signed in February, though no timing has been set, she said.

Lufthansa, United sign cargo joint venture to boost networks

BERLIN (Reuters): The air freight divisions of Lufthansa and United said they have agreed a joint venture on routes between Europe and the United States to help their respective networks.

Lufthansa Cargo already has a joint venture with Japan’s ANA and has said it wanted more partnerships to help bolster its cargo business.

Although the air cargo market has seen some positive signs in 2017, with less overcapacity helping to lift pricing, carriers have been under pressure from falling yields over the last couple of years.

Lufthansa Cargo and United Cargo said that together they will have more than 600 direct connections per week between Europe and the United States.

Lufthansa and United are both part of the Star Alliance grouping of airlines and already have a trans-Atlantic joint venture for their passenger networks.