Air China and Germany's biggest airline Lufthansa have signed a joint venture contract in Beijing on Tuesday after more than two years of negotiations.

The contract allows the two airlines to share revenues on certain routes by selling tickets for each others' flights. In July 2014, when Lufthansa signed the accord in principle, the German carrier said it hoped the deal would improve its position in China, the world's fastest growing aviation market.

Analysts say arrangements like this allow airlines to work together on routes and pricing while sidestepping foreign ownership rules that prevent them from merging.