Etihad Airways and Air France-KLM have signed a historic agreement to codeshare on flights across the airlines’ networks, the first phase of a much larger strategic partnership which commences on October 28.

The wide-ranging codeshare agreement will see Etihad Airways and Air France-KLM offering joint codes on destinations in Europe, the Middle East, Asia and Australia. At the same time, Air France is announcing a new codeshare agreement with airberlin, Europe’s sixth largest airline, in which Etihad Airways holds a 29.21 per cent stake.

James Hogan, Etihad Airways’ President and Chief Executive Officer, said: “This deal, Etihad Airways’ 40th codeshare, marks a momentous milestone for both airline groups and offers countless opportunities to develop an unrivalled commercial relationship.

“It reflects the core elements of Etihad Airways’ 10-year master plan, driven by organic network growth, combined with the forging of strategic codeshare partnerships and minority equity investments in other airlines.

“The linking together of these three components, as we continue to strengthen our bilateral agreements, means all the pieces of our plan are coming together.”

Collectively, the two airline groups expect to carry more than 85 million passengers in 2012.

Air France-KLM and airberlin today also announced a mutual codeshare agreement allowing customers of each of the two carriers to fly seamlessly on all the routes operated by the other between France and Germany.

Hartmut Mehdorn, Chief Executive Officer of airberlin, said: “Our cooperation with the Air France-KLM Group represents another milestone for airberlin in developing a unique, global flight network in conjunction with these world-beating airlines.

“This strategic step will add further interesting services to the choice we can offer our passengers and will have a positive influence on our operations. In this way we will considerably strengthen our presence in the European market and link our Berlin hub to even more destinations.”

Jean–Cyril Spinetta, Air France-KLM Chief Executive Officer, said: “This new partnership between Air France-KLM and Etihad Airways and airberlin reflects our Group’s strategic positioning to ensure the best possible services between Europe and the rest of the world, by developing our network and airline partnerships.

"Working with Etihad Airways allows us to offer our customers a range of new attractive destinations,” Mr Spinetta added.

Initially, the agreement between Etihad Airways and Air France-KLM will see the Abu Dhabi-based carrier’s EY code placed on Air France flights between Paris Charles de Gaulle airport and Bordeaux, Copenhagen, Madrid, Nice and Toulouse.

The EY code will also be placed on KLM flights between Amsterdam and Abu Dhabi, Billund, Cardiff, Newcastle, Oslo and Stavanger.

Air France will initially place its AF code on Etihad Airways flights between Abu Dhabi and the Seychelles, the Maldives, Colombo, Dhaka, Kathmandu and Islamabad.

KLM will initially place its KL code on Etihad Airways flights between Abu Dhabi and Sydney, Melbourne, Islamabad, Colombo and Lahore.

Mr Hogan added: “This deal enables us to further extend our global reach and now gives us a combined network of 321 destinations – the largest of any Middle East carrier.

“The agreement also opens up many new markets for our passengers in Europe and reinforces the importance of strategic commercial partnerships as one of the key enablers for accelerated growth of our network.

“Partnerships are delivering a major source of our revenue growth, by extending our network reach and putting our brand directly in front of millions of new customers. This year to date, they are providing 18 per cent of our revenues and will be a major contributor to our sustained profitability growth this year and into the future.”

The new strategic partners will work together on the proposed integration of frequent flyer programs which includes reciprocal ‘earn-and-burn’ privileges for 1.5 million Etihad Guest members and 21 million Air France-KLM Flying Blue frequent flyers across the combined networks.

Other potential areas of co-operation include joint procurement, as well as maintenance and repair collaboration, as both carriers identify cost savings and seek to benefit from economies of scale, as Etihad Airways is doing with its other strategic partners.

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