German chancellor Angela Merkel has signed a memorandum of understanding in Beijing to expand the scope of the commercial relationship between Lufthansa and Air China.

Meeting with Lufthansa chairman Carsten Spohr and Air China president Song Zhiyong during a state visit to the country, chancellor Merkel revealed the two companies would create a new joint venture.

“We are delighted that, together with Air China, we will be able to offer our customers, particularly those in Europe and China, even better flight connections and services in the future”, said Spohr.

“Thanks to strategic partnerships with leading airlines, the Lufthansa Group airlines now connect the world’s four largest economies even better.”

This new joint venture with Air China offers customers of both airlines a more varied product that can be combined more flexibly, providing additional travel options and flight connections.

Both companies also signed a memorandum of understanding to expand collaboration in the area of maintenance, repair and overhaul services.

As members of the Star Alliance, Lufthansa and Air China have been connected for a number of years.

The memorandum of understanding should pave the way for the creation of a commercial joint venture between the German airline and Air China.

This partnership will add to the existing joint ventures with United Airlines and with Air Canada (since 1998) between Europe and North America and with ANA (since 2012) on routes between Europe and Japan.

The agreement with Air China will allow the Lufthansa Group to provide its airlines with even better access to the world’s second largest aviation market after the USA.

The new partnership agreement should come into force as early as the start of the winter flight schedule in late October 2014.

Air China has been a member of the Star Alliance, the world’s largest airline alliance, since 2007 and is China’s biggest airline with almost 49 million passengers annually as measured by intercontinental traffic.