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Gulf airline Etihad partners with Air France-KLM

Associated Press Modified: October 8, 2012 at 3:45 am •  Published: October 8, 2012

DUBAI, United Arab Emirates (AP) — Rapidly expanding Gulf carrier Etihad Airways has agreed to jointly market some of its flights with Air France-KLM in what could be the beginning of a larger strategic alliance, the airlines said Monday.

The deal for now covers codesharing on flights between Etihad's hub in the United Arab Emirates' capital Abu Dhabi and Amsterdam and Paris, as well as some connecting flights to European, Asian and Australian destinations.

Codeshare deals, in which passengers can buy a single ticket to fly on multiple airlines, are common in the airline industry. They allow carriers to expand their reach without having to launch or acquire the right to operate additional routes.

Etihad, though, is suggesting the agreement may lead to deeper ties with the Franco-Dutch airline operator. Its statement envisions the codeshares as the first phase of a "much larger strategic partnership" that could see the airlines team up on frequent flier programs, and cut costs by cooperating on procurement, aircraft maintenance and repairs.

Air France-KLM has also agreed to share its codes with Etihad partner Air Berlin on routes between France and Germany. Etihad bought nearly 30 percent of Air Berlin last year and has been strengthening business ties with the airline as it seeks to expand its reach in Europe.

The deal comes just over a month after Etihad rival Emirates, based in nearby Dubai, signed a 10-year partnership deal with Qantas Airways. That agreement calls for Qantas to move its hub for European flights from Singapore to Dubai and coordinate with Emirates on ticket prices and scheduling. It also spells the end to a long-term relationship between the Australian carrier and British Airways.

Well-established European carriers have watched nervously as Gulf airlines have grown into formidable competitors in recent years, enticing long-haul passengers with efficient connections, relatively new planes and oftentimes better amenities.

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