AF™/KL™ | Air France-KLM Group: Air France/KLM

[hkskyline]

Wednesday September 26, 3:10 PM
Air France prepares bid for Spain's Iberia: report

MADRID (Reuters) - French-Dutch airline Air France KLM is planning to team up with two Spanish firms to bid for Spain's Iberia against a group led by private equity group TPG, Expansion newspaper said on Wednesday.

The Air France KLM offer would keep 51 percent of Iberia in Spanish hands, allowing the airline to keep flying certain routes in Spain and abroad, the newspaper reported.

On Monday, the head of Air France KLM, Jean-Cyril Spinetta, said the airline would not do a deal with Iberia or Italy's Alitalia unless it was "strongly creative" of value. In July, the airline said it might be interested in Iberia.

TPG , in a consortium with British Airways and Spanish firms Ibersuizas, Vista Capital and Quercus Equity, has been talking to Iberia management for months and has made an indicative offer of 3.60 euros a share.

Iberia stock closed at 3.25 euros on Tuesday.

Expansion said Air France KLM would bring on board two Spanish family investment vehicles -- Torreal, which belongs to Juan Abello, and Planeta, owned by the Lara family, the lead shareholder in Barcelona-based airline Vueling .

Planeta declined to comment. Torreal was not immediately available to comment.

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Air France sees decision on Alitalia, Iberia-paper

AMSTERDAM, Oct 19 (Reuters) - Air France-KLM expects to make a decision on buying Italy's Alitalia or Spain's Iberia shortly, a Dutch newspaper reported on Friday its chief executive as saying.

The chairman and chief executive officer of the French-Dutch airline, Jean-Cyril Spinetta, said in an interview with the newspaper NRC Handelsblad that the company would decide on Alitalia on Oct. 25 during a board meeting.

Spinetta confirmed the airline was on a short list of companies interested in Alitalia, but declined to comment when asked whether Air France-KLM would make a bid for Alitalia alone or with other airlines.

Air France-KLM would make a decision on Iberia in the coming weeks, Spinetta said.

The airlines chief said KLM might also fly from London's Heathrow airport after the company said Air France would team up with Delta Air Lines to share routes linking U.S. cities and Europe.

Every European city might be used as a starting point for transatlantic flights, Spinetta said, citing Rome as an example.

A so-called Open Skies pact between the United States and the European Union enabled the deal with Delta Air Lines, and Spinetta acknowledged that other airlines, such as British Airways , could compete at airports important to Air France-KLM, like those of Paris and Los Angeles.

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Air France's Spinetta Fears Competition From Emirates -Report
22 October 2007

PARIS (Dow Jones)--Jean-Cyril Spinetta, chairman and chief executive of airline Air France-KLM (AKH) rates Dubai-based competitor Emirates Airline's business model as the most menacing for Air France-KLM on flights in Europe and Asia, French weekly newsletter La Lettre de l'Expansion reports Monday, without citing sources.

Referring to comments made within the company, La Lettre de l'Expansion adds Spinetta is said to believe Emirates' on-board services are excellent, ticket prices are attractive and passengers are favorable to the prospect of spending a stopover in Dubai to enjoy attractive duty-free shopping.

No one at Air France was immediately available for comment.

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Air France ok for deals if profitability intact

PARIS, Nov 16 (Reuters) - Air France KLM wants to be a consolidator of the airline industry but will do so only if this does not hurt its medium-term financial performance, the Franco-Dutch carrier's deputy head said on Friday.

Asked whether Air France KLM was still interested in an alliance with troubled Italian carrier Alitalia , Air France-KLM Deputy Chief Executive Pierre-Henri Gourgeon said:

"Of course we are still ready to talk with Alitalia... But however interesting the matter is, we will go ahead with the project only if we have a clear vision that they will not hurt our medium-term performance."

"If we can't see the possibility of continuing on the path of profitability at a three-year horizon, then too bad, we will not be able to pursue this (project)," he added, in a speech at shareholders trade fair Actionaria in Paris.

Alitalia seeks a buyer for the Italian Treasury's 49.9 percent stake in the loss-making Italian flag carrier after an auction for it collapsed in July.

Air France KLM did not take part in the original auction, citing unattractive conditions set by the Italian government, but was later named by Alitalia management as a potential buyer.

Gourgeon also repeated that Air France KLM was looking at Iberia but he declined to say whether it would join a bid battle for the Spanish carrier.

IBERIA

"Iberia is looking for something that could guarantee its future. They have the feeling that they need to merge with one of the big players," he said.

"We are ready to move along with the consolidation process... After that, it is like a dance and it takes some time for the couples to form."

Sources close to Air France have not ruled out a bid for Iberia but say any such bid would be a financial deal rather than an industrial partnership because the two airlines compete heavily on routes to Latin America.

British Airways has already expressed interest in Iberia, while Lufthansa has for months said the Spanish airline was too expensive.

On Thursday, a group of Spanish billionaires along with Spanish bank BBK made a takeover approach that values Iberia at up to 3.7 billion euros ($5.4 billion).

Gourgeon downplayed risks that surging oil prices and a weakening of the dollar could affect Air France KLM's profitability.

He said its fuel hedging policy had been "efficient" to reduce the impact of rising oil prices and added that fuel taxes on tickets had allowed the airline to match the gradual rise in oil prices with the gradual rise in ticket prices.

The weakening of the dollar was not negative for the airline, Gourgeon said.

"When the dollar goes down, we are benefiting from it since we have more dollar costs than dollar revenues," he said.

"But if the euro goes up against all other currencies, then this is a different matter because then it is our yen revenues and our yuan revenues that are falling."

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Air France-KLM CFO Sees Alitalia, Iberia Decision By Yr-End
17 November 2007

PARIS (Dow Jones)--Franco-Dutch airliner Air France-KLM (AKH) is currently not holding talks with Spain's Iberia Lineas Aereas de Espana SA (IBLA.MC) and Italy's Alitalia SpA (AZA.MI) about a potential takeover, but will likely unveil its intentions about the two firms before the end of the year, the group's chief financial officer told Dow Jones Newswires Saturday.

"We are not at that stage yet (of holding talks with Alitalia and Iberia)," Air France-KLM Chief Financial Officer Philippe Calavia said on the sidelines of an investor conference here.

"But I do expect us to reach a decision by the end of the year," the executive said.

Calavia said the company is advised by investment banks BNP Paribas (13110.FR) on Iberia and Lazard and Morgan Stanley (MS) for Alitalia.

"For Iberia, if we make an offer, we will likely have to team up with a local (Spanish) partner. For Alitalia that seems less necessary," he added.

"We will have to make a choice between the two, an offer on both companies will not be the case," Calavia said.

Iberia recently said it received a takeover approach from a group of investors, valuing Iberia at as much as EUR3.76 billion. Madrid-based Iberia, Spain's largest airline by revenue, in March received a takeover approach from U.S. private equity firm TPG. It has since built a consortium including key Iberia shareholder British Airways PLC (BAB) and several Spanish financial investors to prepare a binding offer for the company.

Last month, Alitalia said it had six potential suitors, including leading European carriers Air France-KLM and Deutsche Lufthansa AG (DLAKY).

[Alvar Lavague]

Air France-KLM enters bidding for Alitalia

As the final deadline passed for Alitalia's auction, Lufthansa said it will not bid, but Air France-KLM is making an offer for the unprofitable Italian national carrier.

The Franco-Dutch airline is the leading candidate to buy a 49.9% stake in Alitalia, but reportedly at a lower price than Rome wants. Air France-KLM's Chief Executive Jean-Cyril Spinetta has said: "Any consolidation in Europe must improve the profitability of the new group."

Air France-KLM has 569 planes, 102,000 employees and turnover in its last financial year of 23 billion euros. Alitalia has a fleet one third the size and a workforce of 18,000. Its turnover last year was 4.37 billion euros, but is losing more than one million euros a day.

Business Finance professor Fabio Verna said: "Air France KLM is the logical potential buyer for Alitalia, so it's definitely an important opportunity for our country and for our national airline, the negative aspect is that probably it won't be our national airline anymore."

Italian low cost carrier Air One also plans a bid. That would keep Alitalia in Italian hands, but analysts questioned whether the smaller airline could achieve a takeover of a company with such huge problems.

Italian Prime Minister Romano Prodi has said he hopes Alitalia will go to the best bidder, with Italian ownership a secondary consideration. Alitalia is expected to pick a bidder in mid-December with which to start exclusive talks.

http://www.euronews.net/index.php?pa...e=457889&lng=1

[Alvar Lavague]

Air France-KLM still looking at Iberia, silent on Lufthansa

PARIS, Dec 6 (Reuters) - Air France-KLM is still looking at Spain's Iberia after making a non-binding offer for Italian flag carrier Alitalia on Thursday.
An Air France spokeswoman said that on the Iberia dossier, the group was sticking to comments made last month by Chief Executive Jean-Cyril Spinetta that Air France-KLM was looking closely at the Spanish carrier.
Air France-KLM would make no comment after German rival Lufthansa said it would not make an offer for loss-making Alitalia for economic reasons.

(Reporting by Dominique Vidalon)

http://www.reuters.com/article/merge...00899820071206

[Alvar Lavague]

Alitalia recommends Air France-KLM as preferred buyer

ROME: Alitalia recommended Friday that Air France-KLM, the world's largest airline, should buy the Italian state's controlling stake in the carrier.

The move put pressure on the Italian government to reject an offer from a domestic rival, Air One.

Alitalia's five-member board, which includes the government-appointed chairman, Maurizio Prato, and representatives of the Finance Ministry, said the Air France plan was "credible" and voted unanimously to support the offer, the Rome-based carrier said. The government has said it will take the board's recommendation into consideration when choosing the buyer in January.

"The government should take the Alitalia recommendation into account," Gianluca Verzelli, of BNP Paribas Private Banking in Milan. "It would be very difficult for the government to explain a change in direction."

Prime Minister Romano Prodi has been trying to sell Rome's 49.9 percent stake in Alitalia, which has been losing more than €1 million, or $1.4 million, a day, recently. The government gave Prato a mandate in August to find a buyer after canceling a seven-month auction process the previous month when bidders dropped out.

http://www.iht.com/articles/2007/12/...s/alitalia.php

[Alvar Lavague]

AirFrance-KLM buys Belgium's VLM

BRUSSELS (AFP) — Aviation giant AirFrance-KLM is to buy out Belgium's VLM, a major regional airlines operating out of London City Airport, VLM said in a statement Monday.

The move would see VLM, which operates a fleet of 18 Fokker 50 aircraft and one BAE 146 and uses the British airport as a hub for most of its flights, link up with Air France subsidiary CityJet.

No financial details were released.

VLM chief Johan Vanneste said the move would "create value for our customers, as this transaction will ensure them access to the largest number of destinations from London City Airport."

"The strengths of the Air France-KLM group will provide the necessary support to take the development of VLM Airlines to the next level," he said.

http://afp.google.com/article/ALeqM5...ucIVqWtlkzNFqg

[Alvar Lavague]

AIR FRANCE KLM: December 2007 Traffic

Passenger

Traffic up by 3.1% with a load factor of 78.6%

Further rise in unit revenue excluding currency impact

Cargo

Traffic up by 2.9% and load factor maintained at the high level of 70.2%

Passenger activity

In December 2007, Air France-KLM posted a 3.1% rise in traffic following a slow-down at Air France at the end of the month due to strike action at Orly Airport. With capacity up 4.1%, the load factor declined slightly (-0.8 points) but remained at the high level of 78.6%. Unit revenue excluding currency impact improved further. The number of passengers rose 0.5% to 5.8 million.

- On the Americas network traffic was up 4.7% with capacity up 6.4%. The load factor remained at the high level of 83.1% (-1.4 points).

- The Asian network posted a traffic growth of 4.9% and an increase in capacity of 5.6%. The load factor was maintained at 82.1% (-0.6 points).

- On the Africa and Middle East network traffic was up 2.6% with capacity up by 5.7%. The load factor declined by 2.4 points to 79.1%.

- On the Caribbean and Indian Ocean network traffic was up 1.5% on stable capacity, leading to a
1.3 point rise in load factor to 83.6%.

- On the European network traffic was stable (-0.2%) while capacity rose 0.7%. The load factor stood at 65.8% (-0.6 points).

Cargo activity

In December 2007 the cargo activity recorded a rise in traffic of 2.9%, driven by the Americas and Africa and Middle East networks. Capacity was up by 3.7%. The load factor was maintained at the high level of 70.2% (-0.5 points). The group transported 131,648 tonnes, a rise of 2.3%.

STATISTICS

http://corporate.airfrance.com/en/news/index.html

[Alvar Lavague]

Air France-KLM takeover talks for Alitalia underway


Air France-KLM has started its exclusive talks as preferred bidder for Alitalia. It has been given a deadline of eight weeks for the discussions by Italian treasury minister Tommaso Padoa-Schioppa.

Air France-KLM's chairman Jean-Cyril Spinetta met Alitalia's head Maurizio Prato in Rome. Spinetta then held talks Alitalia's trade union representative.

If a deal is reached the shareholding in the new combined airline would have 67.7% in the market, the French government would hold 17.8%, Alitalia's workers would have 11.5% and the Italian government 3%. But one of the unions involved in the talks said it is possible that the Italian state could end up with a 5% stake as part of
a share-swap deal.

The government of Prime Minister Romano Prodi currently holds 49.9% of the near-bankrupt Italian flag carrier which is predicting a loss this year of 400 million euros.

Air France-KLM's shares fell following a report in a Milan newspaper that its rival, Italian carrier AirOne, has not given up on the idea of buying Alitalia and it has "the support of five or six heavyweight financiers ready to invest 200 to 250 million euros."

http://www.euronews.net/index.php?pa...e=463797&lng=1

[Alvar Lavague]

Delta Air Lines could be working on plans to bring Air France-KLM Group into its merger talks.

After Delta's board of directors last Friday authorized merger talks with Northwest and United airlines, Delta CEO Richard Anderson and other top executives flew to Paris to meet with management of Air France-KLM Group, according to a person familiar with the negotiations.

Delta's president and financial chief, Ed Bastian, and Glen Hauenstein, its head route-planner, accompanied Anderson, according to the person.

The purpose of the trip could have been simply to update nervous alliance partners on the merger discussions. Delta and AirFrance-KLM are partners in the decade-old SkyTeam marketing alliance. But Delta also could be approaching Air France to buy a stake in a contemplated merger between Delta and Northwest.

Northwest also is in SkyTeam, which lets passengers accrue frequent-flier miles from the various carriers in the group. KLM Royal Dutch Airlines and Air France merged in 2003.

KLM and Northwest also have antitrust immunity dating from an earlier linkup in the 1990s, which allows them to coordinate flight schedules and fares in ways that other competing airlines can't. Late last year, Delta and Air France announced similar plans for a joint venture that will give Delta its first access to London's Heathrow Airport, the busiest airport in Europe.

Air France is supplying four pairs of Heathrow slots to the joint venture.

By raising the possibility that it could defect to a rival alliance if it merges with United, Delta also could be hoping to pressure Air France to chip in valuable assets such as a cash investment or more Heathrow flying rights to encourage a merger with Northwest.

A spokeswoman for Delta said she didn't know details of the executives' travel plans, and declined to comment beyond earlier statements that the airline's board and management are looking at strategic alternatives including possible mergers.

Delta reportedly is contemplating a stock-swap deal with Northwest or United. A cash-infusion from Air France-KLM in exchange for an equity stake in the combined carriers would make the deal more attractive to investors and help cement ties with the European carriers.

Federal law limits foreign carriers to a 25 percent voting stake in an American carrier, but interest in such deals has heated up as U.S. carriers' stock prices and the value of the dollar has slumped compared to the euro.

Last month, German carrier Lufthansa announced that it was paying $300 million for a 19 percent stake in U.S. discount carrier JetBlue Airways.

But veteran airline industry consultant Jon Ash said Delta could simply be discussing how the merger plans might affect alliance partners, who could oppose a deal when the European Commission's antitrust arm reviews any merger proposal.

"My suspicion is that it's kind of a difficult situation to break up alliances," he said. The trip "could very well be to settle them down."

Airlines on both sides of the Atlantic have been rushing to expand their networks, partly in response to a new "Open Skies" treaty that takes effect in March. The pact opens more access for U.S. carriers to Heathrow, but also allows European carriers to fly to the United States from more cities.

http://www.ajc.com/business/content/...ance_0117.html

[Alvar Lavague]

Air France Backs Delta-Northwest Merger, Person Says

By Andrea Rothman and Mary Jane Credeur

Jan. 17 (Bloomberg) -- Air France-KLM Group will encourage a merger between Delta Air Lines Inc. and Northwest Airlines Corp. and may make a financial investment to foster a tie-up, a person familiar with the European carrier's plans said.

A Delta-Northwest combination would preserve the SkyTeam Alliance, a marketing group that includes all three carriers, said the person, who asked not to be identified because the talks are private. Delta executives have met with Air France- KLM, Europe's biggest airline, to discuss a role in a Northwest merger, the person said today.

Delta, the third-largest U.S. carrier, is in talks with Northwest and United Airlines parent UAL Corp., U.S. Representative James Oberstar of Minnesota said yesterday. United is a member of the Star Alliance, a SkyTeam competitor.

``These global alliances are not casual arrangements; they are contractual agreements where they're sharing revenue on these markets,'' said Michael Derchin, an analyst at FTN Midwest Research Securities in New York. Star Alliance member Deutsche Lufthansa AG is ``the mortal enemy of Air France,'' he added.

Brigitte Barrand, a spokeswoman for Paris-based Air France, declined to comment. U.S. law limits foreign ownership of airlines to 49 percent of equity and 25 percent voting stake.

The chief executive officers of Delta and Eagan, Minnesota- based Northwest told employees in messages this week the carriers are studying options, including mergers, to offset rising fuel bills. Atlanta-based Delta formed a board committee in November to consider a tie-up.

Spokeswomen for the three U.S. carriers have declined to comment on any merger negotiations. Oberstar, a Democrat from Minnesota, said Northwest executives confirmed to him that Delta was in discussions with Northwest and United.

Staying With SkyTeam?

Darryl Jenkins, an aviation consultant in Marshall, Virginia, said Northwest was unlikely to pick a partner from outside SkyTeam. The 11-carrier alliance includes Continental Airlines Inc., Alitalia SpA and China Southern Air Holding Co.

``In this one, they actually work as a real, virtual airline,'' Jenkins said in an interview. ``It is the best managed, the oldest and most successful.''

Alliances get carriers as close to a joint-venture relationship as possible under foreign-ownership rules. The groups let members sell tickets on each other's flights, thus expanding their route networks. Alliance carriers also usually connect their frequent-flier programs so that travelers have more ways to earn mileage points.

Delta fell 81 cents, or 5.1 percent, to $15.19 at 4 p.m. in New York Stock Exchange composite trading. Northwest dropped 47 cents, or 2.7 percent, to $16.95. Chicago-based UAL slid $1.22, or 3.5 percent, to $33.42 in Nasdaq Stock Market composite trading. Air France-KLM declined 31 euro cents to 19.8 euros in Paris trading.

Jet fuel has surged 54 percent in the past year, while the 16-member Bloomberg U.S. Airlines Index has dropped 43 percent.

Air France's support of a Delta-Northwest merger was reported earlier today by the Wall Street Journal.

http://www.bloomberg.com/apps/news?p...cSU&refer=home

[Alvar Lavague]

Air France Advance May Leave British Airways Behind
By Andrea Rothman and Tracy Alloway


Jan. 22 (Bloomberg) -- Air France-KLM Group, the world's largest carrier by sales, may widen the lead over British Airways Plc and Deutsche Lufthansa AG by swallowing Italy's Alitalia SpA and using African routes to counter an expected slowdown in North Atlantic traffic.

Rising oil prices and cooling travel demand amid a credit squeeze in the U.S. and Europe have slashed British Airways' and Air France's market value by almost half in the past year. The Paris-based company has the lowest price-earnings ratio among Europe's biggest airlines. The stock may rebound by 68 percent in 2008, according to the average of 14 analyst estimates compiled by Bloomberg, compared with 38 percent for British Airways.

Air France, which took over KLM in 2004, got 16 percent of sales from North America in the year ended March 2007. That compares with 32 percent at British Airways a year earlier, according to Aviation Economics, a London-based consulting company.

``Air France is better hedged on fuel and is less exposed to the U.S., the area where most of the concern is about economic conditions,'' said Jonathan Wober, an analyst at Societe Generale in London who recommends buying the company and has a ``hold'' rating on British Airways. ``They have a far more diversified revenue base, with good exposure to emerging markets.''

The French-Dutch carrier's shares surged 1.20 euros, or 6.8 percent, to 18.85 euros in Paris, where stocks rose for the first time in six days following the Federal Reserve's surprise interest-rate cut today. British Airways jumped 6 percent in London to 296 pence. Lufthansa rose 2.1 percent.

Open Skies

In the North Atlantic market, Air France may gain after March 31, when the U.S.-European open-skies agreement lets it run trans-Atlantic flights from British Airways' main base at London's Heathrow airport.

Lufthansa, the fifth-largest airline by sales, is also beefing itself up for open skies. The Cologne, Germany-based carrier bought 19 percent of JetBlue Airways Corp. last month, completing the transaction today, to gain a potential partner for expanding U.S. service. Lufthansa said on Jan. 15 that it wants to play an ``active role'' in industry consolidation ``if conditions are right.''

``That was a very good move,'' said Klaus Breil, a fund manager at Cominvest Asset Management in Frankfurt, which oversees the equivalent of $69 billion including Lufthansa shares.

U.S.-Europe Traffic Origins

``JetBlue is a very strong carrier east of the Mississippi, and 70 percent of all travelers going from the U.S. to Europe and beyond originate from east of the Mississippi,'' he said. The German company is also adding flights to Shanghai in China and Busan, South Korea, he said.

Nineteen analysts surveyed by Bloomberg expect Lufthansa shares to rise 49 percent to 23.71 euros in the next 12 months.

Air France's efforts to take over Alitalia were boosted on Dec. 28, when Italy's government, which owns 49.9 percent of the Rome-based airline's shares, granted the French company exclusive rights to negotiate a purchase. If the talks succeed, Air France's sales would jump to as much as 27 billion euros ($39 billion) a year as it gains a potential market of almost 60 million people.

Air France had sales of 23.1 billion euros in fiscal 2007, up 7.6 percent from a year earlier, compared with 8.49 billion pounds ($16.6 billion) at British Airways. Air France's operating profit, or earnings before interest and tax, rose 32 percent to 1.24 billion euros. British Airways' operating profit dropped 12 percent to 640 million pounds.

Market Share

Air France has built up its dominant market share since buying KLM in 2004 and now accounts for 27.1 percent of all passenger traffic handled by members of the Association of European Airlines, an industry group based in Brussels. That compares with 16 percent for British Airways, according to the association.

Air France-KLM serves some 240 destinations, compared with 145 at British Airways, according to the companies' Web sites. The gap is particularly wide in Africa. Air France and KLM have 344 direct flights to 42 airports, according to OAG Official Airline Guide, a global flight information company. British Airways serves 14 airports in Africa directly, with 91 weekly flights, OAG said.

Africa's Contribution

``Africa alone is the biggest contributor to operating profit'' at Air France, said Yan Derocles, an analyst at Oddo Securities in Paris, who estimates the airline gets 30 percent of its profit there. He recommends buying Air France shares and selling British Airways.

British Airways depends on flights between Heathrow and the U.S. for at least half its profit, according to estimates by Derocles and Chris Avery, an analyst at JPMorgan Chase & Co. in London.

Since 1977, British Airways has been one of four carriers allowed to serve the U.S. from Heathrow, Europe's busiest airport. Because of the open-skies agreement, ``BA is quite exposed at Heathrow to new competition,'' said Nicholas van den Brul at Exane BNP Paribas, who also recommends buying Air France stock and selling British Airways.

Delta, Northwest Ties

Air France-KLM aims to set up an alliance with Delta Air Lines Inc. and Northwest Airlines Corp. to share costs, revenue and flights from 2010. Air France already has such an alliance with Delta, and KLM with Northwest, though a four-way deal still requires an antitrust waiver from the U.S. government, which may respond to the group's request for one by April.

Air France has already announced a venture with Skyteam alliance partner Delta to share costs and revenue of as much as $8 billion for trans-Atlantic flights, including service to Heathrow. The French airline also plans service between Heathrow and Los Angeles.

A potential takeover of Northwest by Delta could provide further momentum for sharing sales and costs. Air France-KLM might provide capital to help finance the tie-up, a person familiar with the company's plans said.

While open skies will give new competitors the right to fly to Heathrow, it won't give them the terminal slots they need to take off and land. British Airways still holds rights to about 40 percent of the slots.

``Even though open skies may increase trans-Atlantic competition, British Airways is still very well positioned,'' said Gert Zonneveld, an analyst at Panmure Gordon & Co. in London, who recommends buying the British company. ``Slot scarcity at Heathrow makes it extremely difficult and improbable for other airlines to build up competing networks with enough frequency to attract premium traffic.''

Spinetta's Turnaround

Uncertainty about the Alitalia deal may also keep investors away from Air France until the takeover terms become clear. A political crisis in Italy may derail the transaction. Prime Minister Romano Prodi's government is on the verge of collapse and the leader may resign, allies said last night.

Alitalia shares fell 1.3 percent to 69 euro cents today in Milan. The Italian carrier's losses and history of labor unrest may present greater hurdles for Air France than KLM did. Alitalia has lost money every year since 2000 except for 2002, when it received an injection of 1.4 billion euros from Italy's government.

Like the Italian company today, Air France was plagued by labor strife and losses and received a government bailout before Chief Executive Jean-Cyril Spinetta took over in 1997. He persuaded pilots to accept a wage freeze and a no-strike accord in return for equity when Air France sold shares to the public in 1999.

Spinetta, 64, met with Alitalia's unions the day he began takeover talks with the Italian government. That helped him win statements of support from pilots for a bid even as flight attendants signaled a wait-and-see approach.

``We are ready to negotiate labor peace with Air France, said Nelson Ferrera, a spokesman for the Anpac union, which represents about half of Alitalia's 2,000 pilots. ``This is the last chance to sustain the company.''

http://www.bloomberg.com/apps/news?p...cVc&refer=home

[hkskyline]

Air France to spend almost $3B a year through 2020 to reduce plane pollution
28 January 2008

PARIS (AP) - Air France-KLM is to invest almost $3 billion a year until 2020 to modernize its Air France fleet with the aim of cutting pollution, the group's chairman said Monday.

The announcement by the world's largest airline by revenue comes as dozens of airlines are pledging to clean up their fleets as fears about global warming -- and fuel costs -- have mounted. So far, however, growth in worldwide air travel has largely outpaced industry progress in reducting aircraft emissions.

The plan would reduce fuel consumption -- and therefore fuel costs -- by 15 percent to 20 percent over the next five years, Air France-KLM chaiman Jean-Cyril Spinetta told a news conference.

He also said Air France aims to reduce noise pollution to below 2005 levels.

As part of the project, Air France has set itself the target of reducing carbon dioxide emissions -- blamed by scientists for contributing to global warming -- over the next five years by 20 percent on flights between mainland France and its overseas territories and by 5 percent on domestic flights, Spinetta said.

[skytrax]

wow this is great!

[Alvar Lavague]

Air France, Skyteam Partners To Add New Heathrow-US Flights

February 05, 2008: 08:39 AM EST

PARIS -(Dow Jones)- The SkyTeam airline alliance will be adding 11 new daily flights between the U.S. and London's Heathrow airport starting March 30, Air France, the French airline operated by Air France-KLM (AKH), said Tuesday.

The new flights are being introduced thanks to the 'Open Skies' agreement freeing up competition on transatlantic routes.

The flights by Skyteam's 11 partner airlines will create eight new nonstop routes to and from Heathrow, to Los Angeles, Houston, Atlanta, New York JFK, Newark, Detroit, Minneapolis and Seattle. The SkyTeam partners that will either operate the routes, or participate on a code-sharing basis, include Delta Air Lines Inc. (DAL), Continental Airlines Inc. (CAL) and Northwest Airlines Corp. ( NWA) as well as Air France and KLM. The three U.S. carriers will be the first U.S. airlines to gain new entry to Heathrow airport since 1991.

http://money.cnn.com/news/newsfeeds/...9_FORTUNE5.htm

[hkskyline]

^ They got the coveted Heathrow slots?

[Alvar Lavague]

Air France-KLM wants to take over 100 pct of Alitalia
02.19.08, 2:18 AM ET

PARIS (Thomson Financial) - Air France-KLM wants to take over 100 pct of Alitalia, the Wall Street Journal reported, citing vice chairman Leo van Wijk.

The airline is poised to inject 3 bln eur into the ailing Italian flag carrier over six years, an executive told the paper.

The airline is currently in negotiations as preferred bidder to take over the Italian government's 49.9 pct stake in the airline.

The paper quoted van Wijk saying, 'if we get a deal with the Italian government, then we will make a general offer for Alitalia. And if it works out, we will delist it'.

Van Wijk said the group is interested in buying a stake in the entity, formed by a merger between Delta Airlines and Northwest Airlines (nyse: NWA - news - people ), and is still considering how much capital it would inject if the deal goes through, the WSJ reported.

Van Wijk said the Alitalia deal depends on the new Italian government and on whether it will support the carrier's plan to cut daily flights from Milan's Malpensa airport. 'If the Malpensa hub is not significantly downsized, we don't see a reason for a deal,' he told the paper.

http://www.forbes.com/markets/feeds/...fx4667716.html

[Alvar Lavague]

Skyteam Unveils Plans for London Heathrow Co-Location
Tuesday 19 February 2008


The alliance is working closely with BAA, the airport company, to develop a customer-focused facility that gives passengers a superior travel experience and helps member airlines grow their businesses.

As part of its previously announced plan to increase its presence at London Heathrow International Airport (LHR), SkyTeam, the global airline alliance, unveiled plans today for its new co-located facility in Terminal 4.

BAA is coordinating a broad airport relocation project that involves a £100 million (approximately $194.3 million) expansion and renovation of Terminal 4. In conjunction with this effort, SkyTeam is investing in building an alliance co-location facility for all members operating out of Heathrow. The SkyTeam facility will be completed in spring 2009. SkyTeam will offer a common check-in area and other standard features alliance passengers have come to expect. Additionally, alliance customers travelling through Heathrow will have access to several service enhancements, including:

* Common-use self service kiosks;
* More check-in desks; and
* Additional bag drop-off locations.

“Co-locating our member operations at London Heathrow will allow SkyTeam to offer our customers worldwide a superior travel experience in one of the most contested markets in the world,” said Giorgio Callegari, chairman of SkyTeam Airport and Infrastructure Special Projects. “SkyTeam continuously strives to provide our customers with a hassle-free journey before, during, between and after their flights. In order to maximize this customer offering at Heathrow, we are working together as an alliance and with BAA to make the necessary renovation and branding investments in Terminal 4, where we will be the anchor airline alliance.”

Heathrow will be the first airport in which all co-located SkyTeam members will share kiosks, allowing alliance passengers to access travel reservations with any of the ten carriers. The greater number and common-use feature of the kiosks will help improve passenger flow through the terminal, reduce congestion and reduce operating costs for member airlines.

Passengers transferring at Heathrow can take advantage of several non-stop service options, including long-haul destinations such as Nairobi and Seoul; European destinations including Amsterdam, Milan, Moscow, Paris, Prague, Rome and Rotterdam; and U.S. destinations such as Houston, New York, Atlanta and Los Angeles. The addition of SkyTeam’s three U.S. carriers and the co-location of all alliance members to one terminal will allow SkyTeam to increase its service out of Heathrow to nearly 50 daily flights.

“London Heathrow will play a key role in the SkyTeam global network for connecting and point-to-point traffic,” said Mr. Callegari. “It will augment our already superior transatlantic hub system, which includes Paris Charles de Gaulle International Airport (CDG) and Amsterdam Schiphol International Airport (AMS), as well as Houston, New York-JFK, New York<s> </s>Newark and Atlanta Hartsfield-Jackson. The development of SkyTeam’s profile at Heathrow is a long-term priority for the alliance, supporting our ongoing focus on providing seamless connections for our customers.”

Although the first-stage open skies agreement takes effect this spring, SkyTeam began taking steps for a shared terminal at Heathrow almost two years ago, when nine members signed a Memorandum of Understanding with BAA in 2006 to co-locate their facilities. Since then, SkyTeam members and BAA have jointly determined the optimal design of Terminal 4 to ensure that passengers enjoy a travel experience of the highest quality. The planned renovations will result in better traffic flow for passengers making their way to their departure gates due to an extended and refurbished departure concourse.

As previously announced, SkyTeam’s move to Terminal 4 will take effect over the next 12 months. In phase one, at the end of March 2008, the U.S. carriers (Continental Airlines, Delta Air Lines and Northwest Airlines) will join KLM Royal Dutch Airlines and Kenya Airways, who already operate out of Terminal 4. In the spring of 2009, the remaining SkyTeam carriers operating out of Heathrow (Aeroflot, Air France, Alitalia, CSA and Korean Air) will relocate. BAA anticipates approximately 10 million passengers* will be served out of Terminal 4 once all airline moves are complete and the ten SkyTeam alliance carriers are operating out of the co-location.

About SkyTeam

SkyTeam is the global airline alliance partnering eleven members, including Aeroflot, Aeroméxico, Air France, Alitalia, China Southern Airlines, Continental Airlines, Czech Airlines, Delta Air Lines, KLM Royal Dutch Airlines, Korean Air and Northwest Airlines, and three Associate Airlines: Air Europa (Spain), Copa Airlines (Panama) and Kenya Airways. Through one of the world’s most extensive hub networks, SkyTeam offers its 428 million annual passengers a worldwide system of 16,400 daily flights covering 841 destinations in 162 countries. www.skyteam.com.

* Total estimated passenger traffic through Terminal 4, including non-SkyTeam alliance carriers with operations in the terminal, as provided by BAA.

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