Lufthansa expands Asia network with Cathay Pacific tie-up

FRANKFURT (Reuters) - Lufthansa (LHAG.DE) and Cathay Pacific will sell tickets on some of each other's routes, boosting the German group's Asia-Pacific network and deepening a partnership in which the airlines already cooperate on freight flights.

The tie-up announced by the companies on Monday highlights the increasingly competitive nature of the sector, with Lufthansa battling Gulf carriers on routes to Asia and Cathay counting the cost of the advance of Chinese rivals that contributed to its first full-year loss since 2008.

The deal is also the first code share agreement for Lufthansa with an airline that is part of a rival alliance. Lufthansa is a founding member of the Star Alliance while Cathay is in Oneworld.

"So much is happening in our industry right now. That's why we need partnerships," Lufthansa Chief Executive Carsten Spohr said.

Lufthansa and rival Air France-KLM (AIRF.PA) have called on the European Commission to take action against the rapid expansion and what they say are unfair practices of Gulf carriers such as Emirates, Qatar Airways and Etihad.

Under the Cathay Pacific deal, Lufthansa and its Swiss and Austrian Airlines businesses will place their code on Cathay flights from Hong Kong to four destinations in Australia and New Zealand from April 26.

In return, Cathay passengers will be able to buy tickets for Lufthansa, Swiss and Austrian flights from Frankfurt, Duesseldorf and Zurich.

Lufthansa uses joint ventures in Asia, with All Nippon Airways (ANA), Singapore Airways and Air China to boost its Asia network, but a code-share deal is not as in-depth as those partnerships.

Spohr said there are no plans to set up a full joint venture with Cathay Pacific.

(Reporting by Patricia Uhlig; Writing by Victoria Bryan; Editing by Maria Sheahan and David Goodman)