* Deal signed during Merkel visit to China
* Says deal could start from October 2014
* Lufthansa shares rise 1.5 pct, outperform DAX
(Writes through, adds detail)
BERLIN, July 7 Germany's Lufthansa
signed a partnership deal with Air China as it seeks
to improve its position in China, the world's second largest
aviation market, it said on Monday.
Under the deal, Air China and Lufthansa plan to set up a
joint venture that will allow them to share revenue on certain
routes by selling tickets for each others' flights.
Lufthansa shares rose 1.5 percent after the announcement,
outperforming a 0.05 percent fall in the wider DAX
index of leading German shares.
"If Lufthansa can get better access to the vast Chinese
market, then it's of course a good thing for the company and
that's helping the shares today," one Frankfurt-based trader
Lufthansa has similar agreements in place with United
Airlines and Air Canada on links between Europe
and North America and with ANA on routes to Japan.
Such joint ventures allow airlines to sidestep foreign
ownership rules and work together on routes and pricing without
falling foul of competition regulations.
Lufthansa has switched to smaller planes to reduce capacity
on Asian routes after expansion by rivals such as
Emirates and Turkish Airlines. It said in
May that its performance there was stabilising.
The deal with Air China was signed during a visit by German
chancellor Angela Merkel to China. During the trip she also
oversaw the signing of a deal by Airbus to sell 100 helicopters
to Chinese companies.
The Air China partnership could come into effect for the
start of the winter timetable in October 2014, Lufthansa said.
(Reporting by Victoria Bryan; Additional reporting by Till
Weber; editing by Jason Neely)