Air France sees mainland revenue doubling

Updated: 2011-12-02 07:38

By Yang Ning and Gao Yuan (China Daily)

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BEIJING - Air France-KLM Group, Europe's biggest airline by revenue, expects revenue in China to double within six years, the company's top executive said on Thursday in Beijing.

"The group's business growth in China is two times or even three times quicker than in other countries and regions in the past three years.

"We expect our revenue to double in about six years if this growth momentum continues," said Alexandre de Juniac, chairman and chief executive officer.

The group will strive to further expand in the country by opening several new routes in the next two to three years and strengthening cooperation with its Chinese partners, China Eastern Airlines Corp Ltd and China Southern Airlines Co Ltd, said Juniac.

Air France-KLM, established in 2004 through the merger of Air France and Netherlands-based KLM, will increase passenger capacity on the mainland by 9 percent by 2012, said Bruno Matheu, chief commercial officer.

The increase will be helped by the new Wuhan-Paris service and upgrading of the current fleet with bigger jets, he said.

Air France sees mainland revenue doubling

Asia and Latin America are the two most important markets for the carrier, which also plans to fly the Shanghai-Paris route using A380 aircraft, said Juniac, though an exact timetable hasn't been set.

Juniac, 49, was appointed as chairman and CEO on Nov 16. He was previously a chief of staff to France's former finance minister, Christine Lagarde, who is now managing director of the International Monetary Fund.

"China is my first trip since I took this position, showing the significance of the Chinese market," he said.

In its winter schedule, Air France-KLM is operating 54 flights a week to six destinations on the Chinese mainland - Beijing, Shanghai, Guangzhou, Chengdu, Hangzhou and Xiamen.

It also offers 31 weekly code-share fights with its Chinese partners.

Last month, Air France-KLM announced that it will begin operating scheduled service between Paris-Charles de Gaulle and Wuhan Tianhe International Airport starting on April 11, using a Boeing 777-200ER configured with 309 seats.

It will be the first airline to offer direct flights between Wuhan, capital of Central China's Hubei province, and Europe.

In October, European carriers reported a year-on-year 6.4 percent increase in international passenger traffic, the latest figures from the International Air Transport Association show.

However, most airlines are experiencing a slide in profitability due to surging fuel costs and a sluggish economy, which are weighing on ticket prices.

Air France-KLM saw an operating profit of 397 million euros ($534.7 million) in the third quarter, down 31.1 percent from the previous year, the company said last month.

Operating profit at Deutsche Lufthansa AG, Europe's second-biggest airline, dropped 27 percent to 575 million euros.

"The current global oil price remains high, and the company needs to implement more cost-control measurements to keep the business profitable," said Juniac.

Air France-KLM has announced a plan for the first half of 2012 to curb increasing operating costs, Reuters reported on Sunday.

The company said it is likely to make a loss for the whole of 2011.