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Air-India, Lufthansa sign code-share agreement

State-run Air-India said on Monday that it has signed a code-share agreement with German airline Lufthansa, which will enable the Indian flag airline to sell seats on seven of Lufthansa's flights from India to Frankfurt.

Money-losing Air-India, which is slated for partial privatisation this year, said it saw an annual profit potential of $2.5 million from the code-share deal with Lufthansa which will be effective from end-October.

"With the implementation of the code-share agreement, Air India will be offering direct services between India and Germany after a lapse of two years," an Air-India spokeswoman said.

The long-haul Indian airline, which has a fleet of 27 aircraft, pulled out of Frankfurt in May 1999 due to capacity constraints owing to the small size of its fleet.

Lufthansa flies a total of 15 flights out of India. The German carrier was allowed seven more flights to India as part of a new air bilateral pact between Germany and India in February provided it signed a code-share deal.

Lufthansa also won rights to fly to India's hi-tech city of Bangalore. It plans to launch its Bangalore flights next month.

The German airline has been in discussion with New Delhi for an increase in flight entitlements since 1995 to cash in on growing tourism and business traffic between India and Germany.

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