Steve Fenton
Nov 17, 06, 6:03 pm
Air France-KLM to launch carrier in the low-cost sector
So how low can you go -seems like a new depth
PARIS (AFP) - Air France (Paris: FR0000031122 - news) plans to compete with low-cost airlines in France via a subsidiary devoted to medium-haul tourism flights beginning next year, the French carrier's parent group said.
Air France-KLM said the new airline would be 60 percent owned by Air France and 40 percent by Transavia, a Netherlands-based airline that is itself 100 percent owned by KLM.
The new subsidiary, the name of which is to be revealed next week, will be based at Paris's Orly Sud airport and launch operations in spring 2007.
According to the financial daily La Tribune, the new airline might be called "Air France Soleil" (Air France Sun).
It will offer low-cost flights to popular French tourist destinations such as Morocco, Tunisia and Spain, serving routes not covered by Air France, the French-Dutch carrier said.
The project was the result of "growth in the leisure market" and "demand from professionals in the French tourism sector", it added.
Sector analyst Penny Butcher at Morgan Stanley (NYSE: MS - news) said Air France-KLM sought to compete with carriers such as Ryanair (Dublin: RY4.IR - news) and easyJet on flights to popular sunspots, noting that Ryanair was very interested in providing service to Morocco.
Air France-KLM said the new subsidiary would use a fleet of Boeing (NYSE: BA - news) 737-800s with a capacity of 186 passengers and added that Transavia would also start to offer flights from Orly.
The low-cost Transavia carrier currently operates a combination of scheduled and charter flights, mainly from the Netherlands.
It posted net profit of 32 million euros in the 2005-2006 fiscal year on sales of 468 million euros.
The project for the new carrier will be submitted to the Air France board on Wednesday, a day before the group's quarterly results are released.
German rival Lufthansa (Xetra: 823212 - news) is already present in the budget sector with its Germanwings subsidiary that offers low-cost flights and charter carrier Condor.
So how low can you go -seems like a new depth
PARIS (AFP) - Air France (Paris: FR0000031122 - news) plans to compete with low-cost airlines in France via a subsidiary devoted to medium-haul tourism flights beginning next year, the French carrier's parent group said.
Air France-KLM said the new airline would be 60 percent owned by Air France and 40 percent by Transavia, a Netherlands-based airline that is itself 100 percent owned by KLM.
The new subsidiary, the name of which is to be revealed next week, will be based at Paris's Orly Sud airport and launch operations in spring 2007.
According to the financial daily La Tribune, the new airline might be called "Air France Soleil" (Air France Sun).
It will offer low-cost flights to popular French tourist destinations such as Morocco, Tunisia and Spain, serving routes not covered by Air France, the French-Dutch carrier said.
The project was the result of "growth in the leisure market" and "demand from professionals in the French tourism sector", it added.
Sector analyst Penny Butcher at Morgan Stanley (NYSE: MS - news) said Air France-KLM sought to compete with carriers such as Ryanair (Dublin: RY4.IR - news) and easyJet on flights to popular sunspots, noting that Ryanair was very interested in providing service to Morocco.
Air France-KLM said the new subsidiary would use a fleet of Boeing (NYSE: BA - news) 737-800s with a capacity of 186 passengers and added that Transavia would also start to offer flights from Orly.
The low-cost Transavia carrier currently operates a combination of scheduled and charter flights, mainly from the Netherlands.
It posted net profit of 32 million euros in the 2005-2006 fiscal year on sales of 468 million euros.
The project for the new carrier will be submitted to the Air France board on Wednesday, a day before the group's quarterly results are released.
German rival Lufthansa (Xetra: 823212 - news) is already present in the budget sector with its Germanwings subsidiary that offers low-cost flights and charter carrier Condor.