Close on the heels of Indian Airlines' plans explore a joint venture with Singapore International Airlines, national flag carrier Air-India has signed a memorandum of understanding with the Lufthansa Group to study business opportunities in maintenance, repair and overhaul services.

As part of the agreement with Lufthansa Technik, the engineering subsidiary of the group, has already assigned a team of experts for upgrading the maintenance processes of A-I's fleet and also to enhance aircraft utilisation, industry sources said.

The two companies will also explore synergies in other areas, including ground handling, catering, air cargo and infotech systems.

Besides, the airlines are also considering tie-ups in marketing and distribution, while retaining their brand individuality.

For this purpose, Lufthansa Consulting, a subsidiary of the group, is conducting a product and service audit of the national carrier.

Lufthansa Consultancy will recommend ways by which A-I can meet international benchmarks, especially those set by Star Alliance, of which Luthansa Airlines is a founding member, sources said.

Both the airlines have set up joint working groups for the effective implementation of the MoU. The arrangement also gives leeway to the two companies to explore more areas of association.

The MoU also includes sharing resources in the fields of personnel management and training. The airlines have decided to co-operate in system development and interface, which includes computerised reservation system linkage.

A-I and Lufthansa will consider synergisation in marketing and sales. The airlines plan to jointly develop capacities and schedules for European and American markets, which will include compatibility in terms of product and fares.

This co-operation could also be extended to other Star Alliance members such as Air Canada and United Airlines, the sources said. A-I has been trying to gain entry into Star Alliance, the world's largest airline association.

Lufthansa and A-I are also planning to offer their consumers through check-ins, convenient customer and baggage transfers at the main hubs and also synergies in their frequent flyer programmes.

A top-level civil aviation ministry delegation was in Frankfurt earlier this year and conducted talks with their German counterparts as well as the Lufthansa Group brass. This laid the foundation for the MoU between A-I and Lufthansa.

A-I is also planning to make Frankfurt the European base for its Trans-Atlantic operations instead of Heathrow. Sources said as talks with the British authorities for extra slots had not been fruitful, the national flag carrier had to look at an alternate European hub.

Flying together

• Lufthansa and Air-India will explore synergies in areas like ground handling, catering, air cargo and infotech systems.
• The airlines are also considering tie-ups in marketing and distribution, while retaining their brand individuality.
• The pact includes sharing resources in the fields of personnel management and training.
• The airlines have decided to co-operate in system development and interface, which includes computerised reservation system linkage.