German flag carrier Lufthansa has bought a 19% stake in US low cost carrier JetBlue Airways for $300m.
It is the first time a major European airline has secured a significant holding in a US point-to-point carrier.
Under the deal, Lufthansa will buy 42m newly issued shares in a private placement at $7.27 per share.
The agreement has been approved by both airlines' boards of director but will also need sanctioning by the US authorities. This is expected in the first three months of 2008.
The deal entitles Lufthansa to nominate one director to the JetBlue board. This will be a Class II director who will be subject to election at JetBlue's annual meeting next year.
In a statement, Lufthansa said the two carriers were looking forward to "exploring potential opportunities for further cooperation for the benefit of their customers. No specific areas of potential cooperation have been agreed.”
Wolfgang Mayrhuber, chairman and ceo of Lufthansa, said: "Our investment reflects the confidence we have in JetBlue's quality, growth potential and management team.
"This investment presents Lufthansa with a compelling opportunity to invest in the US point-to-point carrier market as the industry continues to evolve.
"The transaction links two airlines with international reputations for quality, innovation and a service culture.”
Dave Barger, JetBlue's ceo, said: "The agreement reaffirms our belief in JetBlue's disciplined growth plan and will also improve our balance sheet and give us greater financial flexibility as we move into 2008.”
JetBlue is a New York-based low cost carrier which serves 53 US cities with up to 550 daily flights.
It was founded in 2000 by David Neeleman and has won numerous awards in its short history.
Mr Neeleman was replaced as ceo in May by Mr Barger but remains chairman of the carrier.
Since Mr Barger took over as ceo, the airline has curtailed some of its plans for expansion.
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