Lufthansa and Brussels Airlines have announced they are expanding their partnership, to include codeshare flights, reciprocal frequent flyer programmes and shared terminals.
The two carriers will offer codeshare services on flights between Germany and Belgium and other European destinations when their summer timetable comes into effect on March 29.
The airlines said they would also launch a reciprocal frequent flyer programme, and business travellers using either carrier will have access to both carriers' lounges. Brussels Airlines also plans to move into the same terminal at Hamburg Airport at the end of this month.
The move comes as the EC is continuing its "in-depth" investigation into the proposed tie up between the two airlines. When launching its probe in January, the EC said that its initial investigation indicated the takeover by Lufthansa could "significantly impede effective competition."
Under the proposed take over deal, the German carrier said it would buy a 45 per cent stake in Brussels Airlines for €65m with an option to buy the remaining 55 per cent by 2011.
The Commission said its initial investigation indicated the deal would create a monopoly on three routes, those being from Brussels to Frankfurt, Hamburg and Munich, and said it would also "substantially reduce" competition on routes from Brussels and Berlin.
The EC was also concerned about competition on two other routes, Brussels to Zurich and Brussels to Geneva. The Commission said that Lufthansa had offered remedies for these worries but they were "not sufficiently clear cut to remove serious doubts" identified by the initial probe. The Commission has until June 10 to deliver its verdict.
The EC is also investigating Lufthansa's proposed take over of Austrian Airlines over concerns of possible state aid by the Austrian government.
Report by Stanley Slaughter