7jetset7

Sign Up Now for
7J7 Updates and
Exclusive Content !
only $27 /year

Receive thousands of updates and pertinent information for all airlines, especially the ones that matter most to you!

We take the guess work out of flight and airport data — we are the most up-to-date resource for international airline information.

Airlines

Name: AIR FRANCE
7JetSet7 Code: AFA
Status: Operational
Region: EUROPE
City: PARIS
Country: FRANCE
Employees 54565
Web: airfrance.com
Email:
Telephone: +33 1 41 56 78 00
Fax: +33 1 41 56 70 29
Sita: CDGMEAF
Background
(definitions)

Click below for data links:
AFA-2000-07 ACCDT SST-A
AFA-2000-07 ACCDT SST-B
AFA-2000-07 ACCDT SST-C
AFA-2000-07 ACCDT SST-D
AFA-2000-07 ACCDT SST-E
AFA-2000-07 ACCDT SST-F
AFA-2000-07 ACCDT SST-G
AFA-2002-10-B
AFA-2002-10-C
AFA-2002-10-D
AFA-2002-10-E
AFA-2003-01 TOP AIRPORTS
AFA-2003-01 TOP-WLD-CARGO
AFA-2003-08-A 70 YRS
AFA-2003-08-B 70 YRS
AFA-2003-08-C 70 YRS
AFA-2003-08-D 70 YRS
AFA-2003-08-E 70 YRS
AFA-2003-08-F 70 YRS
AFA-2003-09-A MERGER
AFA-2003-09-B MERGER
AFA-2003-10-A AFI
AFA-2003-10-B AFI
AFA-2004-01 2003TRAFFIC
AFA-2004-01 WLDTOP25-2003
AFA-2004-02 1ST A318
AFA-2004-04 1STQTOPRPK
AFA-2004-04 777-328ER
AFA-2004-04 777-328ER-A
AFA-2004-05 CDG ACCDT
AFA-2004-05-A MERGER
AFA-2004-05-B MERGER
AFA-2004-06 ST MAARTEN LDG
AFA-2004-07 1ST 6 MTHS STATS
AFA-2004-07 MERGER
AFA-2005-01 2004 STATS
AFA-2005-01 2004-WORLD-RPK
AFA-2005-01 A380 ORDERS
AFA-2005-07 777F LAUNCH
AFA-2005-08 ACCDT-A
AFA-2005-08 ACCDT-B
AFA-2005-08 ACCDT-C
AFA-2005-12 KLM-A
AFA-2006-01 2005TOP-RPK
AFA-2006-07 2006-1ST-6-MTHS
AFA-2007-01 2006 WLD TOP RPK
AFA-2007-01 KLM-LAN-MRO
AFA-2007-01 TOP-WLD-CARGO-2006
AFA-2007-01 WLD-TOP-RPK-2006
AFA-2008-01 2007-STATS
AFA-2008-01 2007-TOP-WLD-CARGO
AFA-2008-07 2008TOPWLD6MTHSRPK
AFA-2009-01 WLD-TOP-RPK-2008
AFA-2009-01 WORLD TOP 10 CARGO 2008
AFA-2009-02 777F-OK
AFA-2009-06 ACCDT-A
AFA-2009-06 ACCDT-B
AFA-2009-10 A380 DELIVERY
AFA-2010-08-WLD RPK-2009
AFA-2011-01-2010 WORLD TOP TRAFFIC
AFA-2011-01-EUROPEAN MERGERS
AFA-2011-05-A330 ACCDT 2009-06
AFA-2011-09 - 787-9 ORDER
AFA-2012-09 - 777 UPDATE IPADS
AFA-2012-11 - NEW ENGINE TEST CELL
AFA-2013-01 - AIRFRANCE OPERATORS
AFA-2013-01 - HOP TOP 12 MKTS
AFA-2013-03 - HOP LAUNCH
AFA-2013-04 - HOP! EMB-190
AFA-2013-09 - INCDT A330-203
AFA-2013-10 - 80 YEARS
AFA-2013-10 - A330 INCDT REPORT
AFA-2013-11-A380 LATER
AFA-2014-01-2013 TOP WORLD AIRLINES-A
AFA-2014-01-2013 TOP WORLD AIRLINES-B
AFA-2014-05-40TH YR A300B EIS
AFA-2014-05-777 BUSINESS CLASS COCOON
AFA-2015-04 - TOP 25 WORLD TRAFFIC.jpg
AFA-LA PREMIERE F SUITE - 2016-03.jpg
AFA-LOGO
AFA-MAINTENANCE MRO A380 2001-06
AFA-MAINTENANCE MRO AD
AFA-MAINTENANCE MRO-INDUSTRY PROFILE-2012-01
AFA-MAP
AFA-NEWS 777-PERF
AFA-NEWS A319 DEDICATE
AFA-NEWS ORY-777
AFA-NEWS-1ST A318
AFA-VISIT BORDEAUX
AFA-VISIT EIFFEL TOWER-A
AFA-VISIT FRANCE AVIGNON
AFA-VISIT FRENCH CHATEAU
AFA-VISIT MONT SAINT MICHEL
AFA-VISIT PARIS NOTRE DAME-A
AFA-VISIT PARIS NOTRE DAME-B
AFA-VISIT PARIS-2011-08
AFA-VISIT THE EIFFEL TOWER

FOUNDED AND STARTED OPERATIONS IN 1933. DOMESTIC, REGIONAL AND INTERNATIONAL, SCHEDULED AND CHARTER, PASSENGER AND CARGO, JET AIRPLANE SERVICES.

ADDRESS:
45 RUE DE PARIS
F-95747 ROISSY-CDG CEDEX, FRANCE

FRANCE (FRENCH REPUBLIC) WAS ESTABLISHED IN 843, IT COVERS AN AREA OF 551,700 SQ KM, ITS POPULATION IS 59 MILLION, ITS CAPITAL CITY IS PARIS, AND ITS OFFICIAL LANGUAGE IS FRENCH.

On top of great food and beautiful scenery, cheap, high-quality health care is a big lure for many American retirees. There are also surprising tax breaks for retirees in what's thought of as a high-tax nation. Paris is pricey, but the countryside is affordable.

JUNE 1988: ACCDT: AIR FRANCE (AFA) A320 CRASHED DURING A LOW PASS WITH GEAR EXTENDED AT MULHOUSE-HABSHEIM AIRPORT = 3 FATALITIES OF 136.

NOVEMBER 1995: PREDICTING 1995 = -$243.2 MILLION.

AIR FRANCE (AFA) OWNS 16% OF AIR AFRIQUE (AFR); 20% FRENCH POST OFFICE (FPO); 34% AIR AUSTRAL (AUX); 2.7% AIR CALIN (NCI)' 72.3% AIR FRANCE EUROPE (ANT); 80% AIR CHARTER (ACI); 11.2% AIR GABON (GBN); 3.5% AIR MADAGASCAR (MAD); 12.8% AIR MAURITIUS (MAU), 33.7% TOUMAI AIR TCHAD (TCH), 1.5% AUSTRIAN AIRLINES (AUL), 3.6% CAMEROON (CAM), 28% MIDDLE EAST AIRLINES (MEA), 4.0% ROYAL AIR MAROC (RAM), 33.3% SABENA (SAB), & 5.6% TUNISAIR (TUN).

TO CODE SHARE WITH AEROMEXICO (AMX), ON MEXICO CITY - PARIS, & CANCUN. NEW F 70, 79 PASSENGER (PAX) SERVICE TO LONDON CITY AIRPORT, REPLACING ATR42.

1 747-200B (CF6-50E2), EX-SABENA (SAB).

DECEMBER 1995: MICHEL BLANC'S COMMENT ON NEW AIRPLANE COMPETITION: "PUGNACITY OF BOEING (TBC) IS SUPERIOR."

JANUARY 1996: 20 YEAR ANNIVERSARY OF 1ST SCHEDULED PASSENGER (PAX) FLIGHT OF CONCORDE, TO RIO, VIA DAKAR, 100F PAX! TO FLY +20 YEARS.

MARCH 1996: TO ENTEBBE, UGANDA (AFTER 20 YEARS). TO INCREASE LONG-HAUL 8.5%, & MEDIUM-HAUL 6%: TO MAPUTO, KAMPALA, ABIDJAN, CAYENNE, & HOUSTON. NON-STOPS TO BOGOTA, CAIRO, SAO PAULO, & DAKAR.

1 747-100 (20378) (JT9D-7A) FROM VEGA AIR. LATER THIS YEAR, TO CONVERT 10 A310'S, TO 2 FLIGHT CREW COCKPITS.

MAY 1996: 2 A320-200'S (CFM56-5A3), EX-VIETNAM AIRLINES (VIE).

JUNE 1996: 1 A340-200 (CFM56-5C2), EX-LUFTHANSA (DLH).

JULY 1996: CODE SHARE WITH (JAL), TOKYO TO NOUMEA, NEW CALEDONIA (11/96).

5 ORDERS (ORIGINAL) NOW A340-300E'S HGW, AND TO SELL 2 A340-200'S TO STANDARDIZE ON -300'S. 2 A340-300'S (168; 174) (CFM56-5C4) (2/97) (ILF) 4 YEAR LEASED.

SEPTEMBER 1996: TO TAKE DELIVERY OF 5 A340-300E'S (CFM56-5C4) 11/97 - 12/98) TO REPLACE 3 A340-200'S (CFM56-5C2) (031; 038; 043).

OCTOBER 1996: AGREEMENT WITH AIR CANADA (ACN), FOR AIR FRANCE (AFA) TO DO "C" & "D" CHECKS ON (ACN) 747'S, & (ACN) TO DO ALL HEAVY MAINTENANCE ON (ACN) 767'S. 1ST (ACN) 747 ARRIVED FOR "C" CHECK. IF OK, 5 YEAR CONTRACT. NEXT YEAR, TO CONVERT 6 747-200'S COMBIS, TO ALL PASSENGER (PAX) CONFIGURATION, & 1 747-200 COMBI, TO ALL-CARGO. ONLY COMBIS WILL BE 6 747-400'S. SUB-CONTRACTING CARGOLUX (CLX) 747-200F, FOR PARIS TO NEW YORK, WHILE (AFA) 747F HAS MODIFICATION WORK. 2ND 747-228B (RD657) TO FULL-CARGO, COMPLETE MODIFICATION BY ISRAELI INDUSTRIES (IAI), IN 1/97 (PREVIOUSLY RD659 HAD MODIFICATION).

1 A320-200 (CFM56-5A1), EX-AIR CHARTER (ACI).

NOVEMBER 1996: JEAN-MARIE LEROI, VP (AFA) INDUSTRIES RETIRES. PHILIPPE LAZARE ACTING, UNTIL NEXT YEAR, WHEN DIDIER LUX, DIRECTOR MAINTENANCE AT (AFA) EUROPE (ANT), REPLACES HIM.

CODE SHARE WITH DELTA AIRLINES (DAL).

LAST 6 MONTHS = +$158 MILLION (+$66 MILLION) (NET PROFIT).

10/10 ORDERS 777-200'S (IGW) (GE90B) (/98) 288 PAX, 3 CLASS, AND +5 TO LAST JUNE'S 5/5 ORDERS A340-300E'S HGW 252 PAX, 3 CLASS.

DECEMBER 1996: "D" MAINTENANCE CHECK ON AIR TANZANIA (TNZ) 737-200 (PY612).

36,484 EMPLOYEES.

JANUARY 1997: 1996 = 35,711 MILLION (RPM) (TRAFFIC) (+16%) (#10 HIGHEST OF WORLD AIRLINES).

TO HAVANA, CUBA. CUBA TO ANTILLES (737, 141 PAX) CAYENNE, FRENCH GUYANA, & HAVANA, VIA FORT-DE-FRANCE, MARTINIQUE, & PONTE-A-PITRE, GUADELOUPE. CODE SHARE WITH ALITALIA (ALI), TO ROME.

MARCH 1997: ROBERT IVERSEN, VP/(COO) AMERICAS (EX-PRESIDENT OF LAKER AIRWAYS (LAK)).

PILOT STRIKE AVERTED, WHEN CHRISTIAN BLANC THREATENED TO RESIGN, BECAUSE IT WOULD BE CERTAIN COMMERCIAL, AND ECONOMIC DISASTER.

PREDICTS FISCAL YEAR (FY) 1996 = -$40 MILLIO9N, ALTHOUGH PRODUCTIVITY +27%, IN LAST 3 YEARS.

35,000 EMPLOYEES.

3 ORDERS A320-200'S (6/97). 3 A321-200'S (CFM56-5B3) (674; 675; 684), GATX 5 YEAR LEASED.

APRIL 1997: PHILIPPE MHUN, DIRECTOR 777 MAINTENANCE & ENGINEERING. JOSEPH SAKSIK, ENGINEERING MANAGER. ANDRE MARTIN, BOEING FLEET MANAGER, RETIRES. REPLACED BY MRS ELIZABETH HERLIER. RAYMOND TOPIN, 747/767 ENGINEERING MANAGER. ERIC TRAUTMANN, 737 FLEET MANAGER.

"D3" CHECK ON IRAN AIR (IRN) 747 (RD681). ARRANGEMENT WITH AIR CANADA (ACN), FOR AIR FRANCE (AFA) TO DO 9 (ACN) 747'S "C" & "D" CHECKS, STRUT MODIFICATION, & SECTION 41, WHILE (ACN) WILL DO 5 (AFA) 767'S, & ALL (JT9D), & (PW4000) ENGINES.

PARIS (ORLY), TO WEST INDIES.

TO LEASE 2 747-100'S, EX-(ACN), FOR 2 MONTHS, WHILE (AFA) 747, IN FOR HEAVY MAINTENANCE. 1 767-300ER (PW4056), AWAS (AWW) LEASED 8-12 MONTHS, TO AFRICAN DESTINATIONS. 1 A340-300 (CFM56-5C4) DELIVERY. TO RE-ACTIVATE 6TH CONCORDE, FROM STORAGE IN 7/97, TO COVER FOR OTHERS IN FOR HEAVY MAINTENANCE (12,000 FLIGHT HOURS), TO TAKE 8/9 MONTHS PER AIRPLANE @ $5.2 MILLION. 7TH (AFA) CONCORDE, WAS BROKEN UP FOR SPARES.

MAY 1997: PILOTS' & FLIGHT ENGINEERS' STRIKE, 4 DAYS @ -$17.5 MILLION/DAY, MAY WIPE OUT CHANCES FOR PROFIT, & PROSPECTS FOR GROWTH.

STRATEGIC INTERNATIONAL AGREEMENT, CODE SHARE, WITH AIR INDIA (AIN), TO INDIA.

FISCAL YEAR (FY) 1996 = +$35.9 MILLION (1ST +VE SINCE /89!). AIR FRANCE (AFA) GROUP = +$67 MILLION, DUE TO HIGH FUEL COSTS ($153 MILLION), (ANT)'S -$114 MILLION, AND PILOT (FC) STRIKES -$34 - $42.5 MILLION.

2 A321-200 DELIVERIES.

JUNE 1997: LOS ANGELES (LAX) TO TAHITI (747).

NEWLY ELECTED TRANSPORT MINISTER, SAYS "NO" TO PRIVATIZATION OF (AFA), IN HIS TENURE.

5 YEAR MAINTENANCE CONTRACT, INCLUDING AIRFRAME/COMPONENTS FOR ROYAL AIRLINES (ROY), 3 A310'S.

1 A321-200 (CFM56-5B3/P) DELIVERY.

JULY 1997: AIR TRAVELERS ASSOCIATION GIVES AIR FRANCE (AFA), A REPORT CARD "B" RATING FOR SAFETY, USING DATA FROM AIRCLAIMS UK.

AUGUST 1997: $80 MILLION/YEAR MAINTENANCE CONTRACT, FOR 8 VIRGIN ATLANTIC (VAA) A340-300'S.

SEPTEMBER 1997: CODE SHARE WITH AEROFLOT (ARO), TO MOSCOW. CODE SHARE WITH FINNAIR (FIN), TO HELSINKI. CODE SHARE WITH MAERSK (MRS), TO BILLUND.

CHRISTIAN BLANC RESIGNS.

EXPECT 1997 TO BE +#1 BILLION F. GOAL TO GO FROM 8TH IN WORLD, TO 5TH.

POLL INDICATES 56% PUBLIC, WANT PRIVATIZATION.

OCTOBER 1997: Air France (AFA) Chairman & (CEO), Christian Blanc made good on his threat to step down if the government blocked plans for majority privatization of (AFA)'s capital. "Privatization is necessary for the development of Air France (AFA)," Blanc maintained in a resignation statement signed September 4, after the new Socialist/Communist government made clear it had no intention of selling off a majority of the airline. His successor, Jean-Cyril Spinetta, is a former Chairman of Air Inter, and firmly in the Socialist camp. He was appointed to Air Inter in 1990, and served three years. Upon leaving, he criticized the merger of Air France (AFA) and Air Inter, and opposed French aviation deregulation. Blanc is credited for using FFR20 billion/$3.3 billion in state subsidies and deft arm-twisting to pull (AFA) out of its financial nosedive and return it to profitability. He said (AFA) should generate a consolidated net profit of about +FFR1 billion in 1997. Last year, earnings totaled +FFR394 million.

"COMMERCIAL AGREEMENT" WITH ACES (ACE), TO BOGOTA, MEDELLIN, CALI, & CARTAJENA. JOINT OPERATIONS WITH AIR-INDIA (AIN), TO INDIA.

(AFA) GROUP = 38,542 EMPLOYEES.

1ST 9 MONTHS = 46.55B RPK (TRAFFIC) (9TH HIGHEST IN WORLD). LAST 6 MONTHS = +$308 MILLION (+$102.9 MILLION) (NET PROFIT).

343 FLIGHTS/MONTH OVER NORTH ATLANTIC USING 180 MINUTES 767 EXTENDED TWIN ENJGINE OPERATIONS (ETOPS) METHODS.

LAST A300 SERVICE. ALL A300'S WITHDRAWN FROM USE (WFU). 4TH A321-200 (CFM56-5B3) (761) (2/98), GATX LEASED.

NOVEMBER 1997: JEAN-CYRIL SPINETTA, CHAIRMAN & (CEO) (RESIGNED FROM AIR FRANCE EUROPE (ANT) CHAIRMAN IN 1993).

JEAN-CLAUDE GAYSSOT, TRANSPORT MINISTER, NOW SAYS POSSIBLE INTERNATIONAL CROSS-OWNERSHIP, WITH LIMITED, FRACTIONAL SHARES, TO BE SOLD IN MID-1998.

CODE SHARE WITH (CRN), TO BASEL MULHOUSE, BERN, AND LUGANO. COOPERATIVE AGREEMENT WITH TAAG AIR ANGOLA (ANG), PARIS CHARLES DE GAULLE (CDG), TO LUANDA, AIR FRANCE (AFA) A340-300, TAAG ANGOLA AIRLINES (ANG) 747-300).

CABIN ATTENDANTS (CA), CALL FOR 48 HOUR STRIKE (20TH IN LAST 20 MONTHS).

NEW HUB AT LYON-SATOLAS (5M PASSENGERS (PAX).

2 ORDERS (2/99) A319'S, (ILF) 5 YEAR LEASED.

DECEMBER 1997: RECEIVES >500 REQUESTS/YEAR FOR CONCORDE CHARTER FLIGHTS, EVEN CHARGING $80,000/BLOCK HOUR, AND STILL CANNOT FULFILL ALL REQUESTS.

LAST 6 MONTHS FY 1997 = +$296 MILLION (X3), INCLUDING CONSOLIDATION WITH AIR FRANCE EUROPE (ANT): +1.6% (RPK) TRAFFIC, -0.6% (ASK) CAPACITY, 76.1% LF (LOAD FACTOR) (+1.6), +9% PASSENGERS (PAX), +13.4% (FTK) FREIGHT TRAFFIC, DESPITE +12.7% FUEL COSTS.

WITHDREW LAST 747-100 FROM SERVICE. 1 ORDER (/99) A321-200 (CFM56-5B3), NOW OPERATES 8 A321-200'S.

JANUARY 1998: JOINT SERVICE WITH AIR AFRIQUE (AFR), PARIS - POINTE NOIRE, CONGO (A320, 120 PAX) WITH TECHNICAL STOP AT OUAGADOUGOU, BURKINA FASO. PARIS (CDG) - QUITO & - LOMOGES (DAILY BRIT AIR ATR42).

1 737-300 DELIVERY. 13TH ORDER A340-300, 10 DELIVERED.

FEBRUARY 1998: AIR FRANCE (AFA) DEPENDS ON TOWBARLESS TOWING VEHICLES (TLTV) TO MOVE ALL BOEING, & AIRBUS AIRPLANES, AT PARIS (CDG), AND USE WITH 777 IS ESSENTIAL.

46,000 EMPLOYEES (INCLUDING AIR FRANCE EUROPE).

TO RETURN 3 737-500'S, TO EURALAIR (ERA), FOR AOM FRENCH AIRLINES (MNR). 1 737-300 (PQ988) TO TRAMCO, AMSTERDAM, FOR MODIFICATIONS. 2 A300B2-100'S (006; 007) SOLD TO CHANNEL EXPRESS (CEX). 2 737-300'S, 2 A321-200'S, & 1 A340-300X DELIVERIES.

MARCH 1998: CODE SHARE WITH ROYAL AIR MAROC (RAM), STRASBOURG, LYON, & PARIS, TO CASABLANCA (737-200). TO SHANGHAI (A340-300, 6F, 42C, 204Y).

3 737-300'S (28569; 28672; 28673), (GEH) LEASED. 1ST 777 DELIVERY. CARGO LION (CGO) LEASED DC-8-62F, REPLACED WITH 1 DC-10-30F, GEMINI AIR CARGO (GMN) LEASED. SELLS 6 A300B2'S TO EUROPEAN AVIATION (EUL). 1 A321-200 (CFM56-5B3/P) DELIVERY.

APRIL 1998: 36,484 EMPLOYEES (INCLUDING 9,138 FLIGHT CREW (FC)).

JEAN-CYRIL SPINETTA, CHAIRMAN, APPOINTS PIERRE-HENRI GOURGEON, (CEO); ALAIN VIDALON, EXECUTIVE VP GROUND & FLIGHT OPERATIONS; ALAINE BASSIL, EXECUTIVE VP (AFA) INDUSTRIES, & (AFA) MAINTENANCE. PIERRE-HENRI GOURGEON, REPLACES MARC VERON. ALAINE BASSIL, REPLACES PHILIPPE LAZARE.

1ST QUARTER = 25.4 BILLION (RPK) TRAFFIC (+6.4%), 1.58 BILLION (FTK) FREIGHT TRAFFIC (+6.5%).

NEW NON-STOPS TO ATLANTA (767-300, 25C, 184Y), & BOSTON (A310-300, 40C, 127Y). TO NEW YORK (JFK) (777).

767 180 MINUTES EXTENDED TWIN ENGINE OPERATIONS (ETOPS) FLIGHTS/MONTH: 311 OVER NORTH ATLANTIC.

MAY 1998: RESUMES SERVICE TO SHANGHAI (A340-300), AFTER 25 YEARS.

FISCAL YEAR (FY) 1997 = +$310 MILLION (-$44 MILLION) RECORD! NEEDS >71.4% LF TO BREAK EVEN: 73.6% LF, +9.7% (RPK) TRAFFIC, +4% (ASK) CAPACITY, +5.1% PASSENGERS (PAX).

16/16 ORDERS A319'S, AND 4/4 ORDERS A320'S, TO REPLACE 19 737-200'S. TO DEFER PURCHASE OF 3 777-200'S (IGW), DUE IN 2000. 3RD 777-200 DELIVERY.

JUNE 1998: CODE SHARE WITH AIR-INDIA (AIN), TO MUMBAI, AND NEW DELHI. TO HAVANA, CUBA (747-200, 22F, 75C, 374Y).

(IATA) REPORTS FOR 1997, TOTAL PASSENGER (PAX) VOLUME, AIR FRANCE (AFA) JUMPED TO 11TH PLACE, FROM ITS PREVIOUS 17TH IN THE WORLD.

1 B AE ATP, BRITISH WORLD (BAF) LEASED, FOR 6 MONTHS.

JULY 1998: $520 MILLION, 2 ORDERS 777-200ER'S, 5 YEAR ILFC (ILF) LEASED, AND 5 ORDERS A319'S, 6 YEAR (ILF) LEASED. +20/20 ORDERS A319/A321'S (5/99).

EXTENDED TWIN ENGINE OPERATIONS (ETOPS) FLIGHTS/MONTH (& TOTAL): 5 767 (180 MINUTES) = 202 (18,188) ATLANTIC; 3 777 (138 MINUTES) = 113 (339) ATLANTIC.

AUGUST 1998: USA DEPARTMENT OF TRANSPORT (DOT) OK'S CODE SHARE WITH CONTINENTAL AIRLINES (CAL) TO KENYA, TURKEY, & UNITED ARAB EMIRATES (UAE), & WITH DELTA AIRLINES (DAL), TO 17 POINTS IN AFRICA, SAUDI ARABIA, & INDIA.

WORLD TOP AIRLINES 1997 COMPARISON:
EMPLOYEES (1,000): 1 FED 94; 2 UAL 92; 3 AAL 86; 4 DAL 63; 5 DLH 58; 6 BAB 53; 7 NWA 48; 8 USA 42; 9 CAL 40; 10 AFA 36; 11 QAN 30; 12 SIA 28; 13 KLM 27; 14 SWA 25; 15 TWA 25; 16 IND 23.

NET ($MILLION): 9 DLH 482 (371); 10 CAL 385 (319); 11 SWA 318 (207); 12 AFA 314 (-28); 13 ACN 308 (109); 14 KLM 303 (-33).

(RPK) TRAFFIC (BILLION): 1 UAL 195; 2 AAL 172; 3 DAL 160; 4 NWA 116; 5 BAB 106; 6 JAL 77; 7 CAL 77; 8 DLH 71; 9 AFA 70; 10 USA 67.

(FTK) FREIGHT TRAFFIC (BILLION): 1 FED 9.3; 2 GRC 6.5; 3 KAL 5.7; 4 UPS 5.4; 5 AFA 5.0; 6 SIA 4.8; 7 JAL 4.2; 8 BAB 3.9; 9 KLM 3.9; 10 CAT 3.6.

IN EUROPE 1997 COMPARISON:
EMPLOYEES (1,000): 1 DLH 58; 2 BAB 53 (+2%); 3 AFA 36 (+19%); 4 KLM 26; 5 SAS 23 (+19%); 6 IBE 21 (-4%).

(RPK) (B): 1 BAB 106 (+5.1%); 2 DLH 71 (+12.8%); 3 AFA 70 (+21.8%); 4 KLM 55 (+13.4%); 5 ALI 36 (+4.2%); 6 IBE 28 (+6%

(FTK) (B): 1 GRC 6.2 (+2.4%); 2 AFA 4.9 (+5.5%); 3 BAB 3.9 (12%); 4 KLM 3.7 (+.8%); 5 SWS 1.8 (+12.8%); 6 ALI 1.4 (-1%).

SEPTEMBER 1998: CODE SHARE WITH KOREAN AIR (KAL), TO SEOUL (AIR FRANCE (AFA) A340-300: 6F, 42C, 167-204Y; (KAL) 747-400: 12F, 58C, 306Y).

COMPLETED RETROFIT, OF ROCKWELL COLLINS, GNLU-910 (FMS)/(GPS) GLOBAL, NAVIGATION LANDING UNITS, ON 19 737-200'S, INCLUDING INTEGRATION OF MULTI-FUNCTION, CONTROL DISPLAY UNITS/3RD (DME).

777-228 IGW CARRIES +14,220 GALLONS IN STRUCTURAL CENTER SECTION, FOR TOTAL 45,220 GALLONS = 2,300 STATUTE MILES RANGE. 648,000 LBS (MTOW).

OCTOBER 1998: IN JANUARY, TO RELOCATE CARGO FLIGHTS FROM PARIS ORLY (ORY) TO NEW TERMINAL AT PARIS CHARLES DE GAULLE (CDG), TO COST $65 MILLION FOR 1 MILLION SQ FT CARGO FACILITY, ABLE TO HANDLE 1 MILLION TONNES OF CARGO ANNUALLY.

EXTENDED TWIN ENGINE OPERATIONS (ETOPS) FLIGHTS/MONTH (TOTAL FLIGHTS) = 5 767'S 180 MINUTES: NORTH ATLANTIC 258 (18,991); TRANS AFRICA 22 (65); 3 777'S 120 MINUTES: NORTH ATLANTIC 166 (1,097).

NOVEMBER 1998: COMMERCIAL ACCORD WITH AIR MAURITIUS (MAU) TO MAURITIUS, SOME VIA REUNION ISLAND (747, 2 CLASS, & A340, 3 CLASS).

A340-313X (245) DELIVERY (CFM56-5C4). 737-500 DELIVERY. 2 737-200'S (JT8D-15A), & 4 A320-200'S (CFM56-5A3), EX-AIR CHARTER (ACI). A340-200 (CFM56-5C2), LEASED TO AIR TAHITI NUI (NUI). A340-313X (CFM56-5C4) (245) DELIVERY.

DECEMBER 1998: DESPITE JUNE PILOT (FC)'S STRIKE, 1ST 6 MONTHS FISCAL YEAR (FY) 1998 END 9/98 = +$239 MILLION (-24%): +5.1% (RPK), +4.5% (ASK), 76.5% LF (+.4). LONG-HAUL +7.2% (RPK), 79.8% LF: NORTH AMERICA 88.5%, LATIN AMERICA 86.2%, ASIA 82.1%, AFRICA 85.6%. -12.4% (FTK), DUE TO 9-DAY STRIKE, ASIAN RECESSION, & TRANSITION TO PARIS (CDG) NEW CARGO FACILITY.

2 737-53S'S (29073; 29074), PEMBROKE (PEB) 5 YEAR LEASED. 1 ORDER (3/99) 737-53S (3101-29075), (PEB) LEASED. 1ST A319-111 (938) DELIVERY, (ILF) LEASED. 737-53S (98-29076), (PEB) LEASED. A340-313X (246) DELIVERY.

JANUARY 1999: GROUND STAFF TO 35 HOUR WEEK, IN EXCHANGE FOR +4,000 JOBS, BY 2001. NEGOTIATING WITH (WDL) & OTHER GERMAN REGIONAL AIRLINES TO FIND A REPLACEMENT FOR EUROWINGS (RFG), AND NOW PARTNERS WITH (KLM). PRIVATIZATION EFFORTS CONTINUE, WITH OFFERS FOR 20% OF ITS CAPITAL. VALUATION, ESTIMATED BETWEEN $2.8 BILLION & $4.4 BILLION. IBERIA (IBE), & ALITALIA (ALI), ARE ALSO PRIVATIZING.

737-200 (23008) RETURNED, LEASED TO SENEGAL INTERNATIONAL (SNL). 2 777-228'S DELIVERIES (187; 189).

FEBRUARY 1999: PARTIAL STRIKE BY MAINTENANCE STAFF, GROUNDS 10 AIRPLANES, REQUIRING AIR FRANCE (AFA) TO CHARTER 6 AIRPLANES, AND SUBCONTRACT SOME OF ITS MAINTENANCE OPERATIONS TO LUFTHANSA (DLH).

MAINTENANCE & TECHNICAL SUPPORT CONTRACT TO SOLID AIR (SOL), FOR 2 A310-300'S (CF6-80C2) (595; 599), LUFTHANSA (DLH) 5 YEAR LEASED.

VALUATION OF AIR FRANCE (AFA), NOW SET AT $3.5 BILLION. GOVERNMENT WILL LOWER ITS STAKE IN (AFA) FROM 97.3% NOW TO 63.6% IN MARCH 1999, 56.8% IN JANUARY 2000, & 53% IN MARCH 2003.

CODE SHARE ALLIANCE WITH TRANSPORTES AEREOS MERIDIONAIS (TPR), PARIS - SAO PAULO (777/A330), & ALSO RIO DE JANEIRO, BELOHORIZONTE, BRASILIA, CURITIBA, PORTO ALEGRE, FORTALEZA, RECIFE, & SALVADOR. CODE SHARE WITH MIDDLE EAST AIRLINES (MEA), TO BEIRUT & ON TO DHAHRAN, KUWAIT, AND TEHERAN (A310). PLANS TO LAUNCH SERVICE TO TAIPEI, AS AIR ORIENT.

1 747-228F SOLD TO ATLAS AIR (TLS) 83,000 HOURS. 1 777-200, (ILF) LEASED. A319-111 (938, F-GRHA) DELIVERY. 1 A321-200 (CFM56-5B3/9), & 1 A340-300XC (CFM56-5C4) DELIVERIES.

MARCH 1999: IF EUROPEAN UNION (EU) BANS ADDITION OF USA-BASED STAGE 3 AIRPLANES WITH HUSHKITS, THE USA WILL BAN CONCORDE OPERATIONS INTO THE USA. THE ANGLO-FRENCH CONCORDE 1ST FLIGHT WAS 30 YEARS AGO FROM THE AEROSPATIALE AIRFIELD IN TOULOUSE. HAS SINCE, LOGGED 900K HOURS, 2/3 >SPEED OF SOUND. RECORD TRANSATLANTIC CROSSING IS 2 HOURS 52 MINUTES 59 SECONDS, AT 1,300 MPH.

INCDT: 747-200F (21515) NOSE GEAR COLLAPSED ON LANDING AT MADRAS, INDIA, AIRPLANE CAUGHT FIRE AND WAS DESTROYED = 3/1 OK.

2 737-200'S (23004; 23007) RETURNED TO LESSOR, TO FRONTIER (FRO). 737-500 (29075), PEMBROKE 5 YEAR LEASED. 1 737-548 (26287), EX-AER LINGUS (ARL), (ILF) LEASED. 1 777-200ER (GE90-90B) DELIVERY. 1 A321-200 (956) (CFM56-5B3), GECAS (GEH) LEASED.

APRIL 1999: 55,747 EMPLOYEES (INCLUDING 3,434 FLIGHT CREW (FC) & 10,017 CABIN ATTENDANTS (CA)).

(http://www.airfrance.fr). SITA: PARSXAF.

REPLACES 747 WITH 777 ON ROUTE TO WASHINGTON. NEXT MONTH, WILL ADD 2ND NONSTOP 747.

2 737-500'S (26445; 26446), EX-MALAYSIA AIRLINES (MAS), (GEH) LEASED. 15/10 ORDERS (2003) A318'S, ALLOWS AIRBUS TO LAUNCH PRODUCTION. 2 ORDERS (3/00) A319'S, (ILF) LEASED, & 1 ORDER (4/01) 777-200 IGW (GE90), (ILF) LEASED. 2 A319-113'S (998, F-GHRC; 1000, F-GHRD) DELIVERIES, ILF LEASED. 2 ORDERS (12/00) A340-300'S (CFM56-5), (ILF) LEASED.

MAY 1999: 2 A319-111'S (1020, F-GHRE; 1025, F-GHRF), (ILF) LEASED. 747-128 (F-BPVP) PARTED OUT. 8TH 777 (F-GSPH) DELIVERY.

JUNE 1999: FISCAL YEAR (FY) 1998 = +$280 MILLION (+$271.7 MILLION) (NET PROFIT): 35.6 MILLION PASSENGERS (PAX) (+3.5%), OPERATIONS WERE A NET LOSS (-12.2% (FTK) FREIGHT TRAFFIC.

PILOT STRIKE LOOMS. HAD 10-DAY STRIKE IN SPRING 1998.

LENDS IRELAND'S CITYJET $2.7 MILLION, EFFECTIVELY GIVING IT 25% SHARES. AIR FOYLE (FOY) RECENTLY TOOK CONTROLLING 50.01% INTEREST IN CITYJET, AND INSTALLED CHIEF, CHRIS FOYLE, AS ITS CHAIRMAN. FOUNDER, PAT BYRNE, RETAINS HIS CEO POSITION. CITYJET OPERATES WET LEASE, AND FRANCHISE SERVICES FOR AIR FRANCE (AFA).

(AFA) SUBCONTRACTORS = 1.4 MILLION PASSENGERS (PAX) ON FRANCHISED FLIGHTS.

SELECTS DELTA AIRLINES (DAL), AS ITS "ALLIANCE" USA PARTNER ACROSS THE ATLANTIC.

1998 TOP WORLD AIRLINES - TRAFFIC (RPM) (BILLION):
1 UAL 124.54; 2 AAL 198087; 3 DAL 103.24; 4 BAB 72.08; 5 NWA 66.71; 6 CAL 50.94; 7 JAL 48.97; 8 DLH 46.88; 9 AFA 46.35; 10 USA 41.25; 11 GIA 35.88; 12 KLM 35.59.

JULY 1999: TECHNICAL DEPARTMENT RESTRUCTURE: PHILIPPE MHUN, ENGINEERING & MAINTENANCE DIVISION MANAGER (LONG HAUL); FRANCK TERNER, ENGINEERING & MAINTENANCE DIVISION MANAGER (MEDIUM RANGE FLEETS); PHILIPPE CAREJE, ENGINEERING COORDINATOR/METHODS MANAGER; CLAIRE CAMIN, 747/767 ENGINEERING MANAGER; RAYMOND TOPIN, 777 MANAGER; ELIZABETH HERELIER, GROUND SUPPORT DIVISION MANAGER; PIERRE REVILLE, VP ENGINEERING MARKETING & SALES; FRANCOIS COUQUE, DIRECTOR AFM/AFI LOGISTICS.

747-200F (CF6-50E2), ATLAS AIR (TLS) WET-LEASED.

AUGUST 1999: NEW ALLIANCE WITH DELTA AIRLINES (DAL) MAY BE EXPANDED TO INCLUDE KOREAN AIR (KAL), & AEROMEXICO (AMX), BY THE END OF 1999.

AIR FRANCE (AFA)'S ANGLO-FRENCH CONCORDE'S ARE RIDING A 2-YEAR WAVE OF SUCCESS WITH INCREASED PROFITABILITY. THEY ARE CONSIDERED THE FLAGSHIP OF THE AIRLINE, AND WILL CONTINUE FLYING SCHEDULED SERVICE INDEFINITELY. HEAVY "D" MAINTENANCE CHECKS TAKE >1 YEAR TO COMPLETE. SPENDING $818,000 ON IMPROVEMENTS TO INTERIOR. IN LAST YEAR, CARRIED 38,000 PASSENGERS (PAX) (+2%), 53% LF (LOAD FACTOR).

AIR FRANCE (AFA) INDUSTRIES HAS MAINTENANCE CONTRACT EXTENSION, THROUGH 7/04, FOR 10 VIRGIN ATLANTIC (VAA) A340'S (CFM56-5), INCLUDING COMPONENT SUPPORT AND ENGINE MAINTENANCE.

OCTOBER 1999: AIR FRANCE INDUSTRIES: CONTACT ALAIN HUBERDEAU, DIRECTOR MARKETING & SALES (afimiml@airfrance.fr), HAS HANGARS FOR 6 WIDE BODIES, & 6 NARROW BODIES FOR 727'S, 737'S, 747'S, 777'S, DC-8'S, A300-B2'S/-B4'S, A300-600'S, A310'S, A320'S, A330/A340'S, & F27'S "A" - "D" MAINTENANCE CHECKS, INCLUDING 747 SECTION 41, 747 CARGO CONVERSIONS, CORROSION & PREVENTION CONTROL PROGRAM (CPCP), EXECUTIVE (VIP), INTERIORS, AVIONIC UPGRADES, AND STRIP/PAINT.

(AFA) INDUSTRIES HAS AEROFLOT (ARO), 7-YEAR MAINTENANCE, ENGINEERING & COMPONENT SUPPORT CONTRACT FOR 4 767-300ER'S (PW4000).

1 737-500 (26454), EX-MALAYSIA (MAS), (GEH) 6 YEAR LEASED. 8/5 ORDERS (1/01) A330-200'S (CF6-80E1A3), 219 PAX, TO REPLACE AGING 767'S, & A310'S.

NOVEMBER 1999: CODE SHARE WITH CHINA EASTERN (CEA), TO SHANGHAI (777/A340).

2ND 737-5H6 (26456), EX-MALAYSIA (MAS), (GEH) 6 YEAR LEASED. 2 777-200ER'S (GE90-90B), 1 A319 (CFM56-5B5/P), 1 A321-200 (CFM56-5B3/P) AND 1 A340-300X (CFM56-5C4) DELIVERIES. A321-211 (1133, F-GTAH) DELIVERY.

DECEMBER 1999: CODE SHARE OF AIR FRANCE (AFA)'S TAIWAN AFFILIATE, "AIR ORIENT," WITH (EVA) AIR CARGO FLIGHTS, PARIS - DUBAI - TAIPEI. IN MARCH TO PHILADELPHIA (A300/A310).

2 777-200 (258; 263) DELIVERIES. 1 A300B4F, HEAVYLIFT (HVL) WET-LEASED TO AIR FRANCE (AFA) CARGO FOR SERVICE TO AFRICA. 1 ORDER (2/02) A319, (ILF) LEASED. A340-313X (310, F-GLZS) DELIVERY.

JANUARY 2000: IN MAY, PARIS (CDG), TO CINCINNATI (767-300ER).

TO CONVERT 1 747-200 TO FREIGHTER IN SEPTEMBER 2001 FOR AIR FRANCE (AFA) CARGO USE.

FEBRUARY 2000: POSSIBLE PRIVATIZATION OF AIR AFRIQUE (AFR) BY JUNE COULD SEE AIR FRANCE (AFA) ADD 25% TO EXISTING 12.7% STAKE.

CURRENTLY, (AFA) SERVICE TO 189 CITIES WORLDWIDE, AND 12 GATEWAYS IN USA + 79 USA CITIES FROM CONTINENTAL AIRLINES (CAL), & DELTA AIRLINES (DAL) CODE SHARES.

4TH QUARTER = +$125 MILLION (+269%), FROM SEVERAL ONE-TIME GAINS, INCLUDING AIRPLANE DISPOSAL WRITE-OFFS, EARLY RETIREMENT PACKAGE, & +VE EXCHANGE RATE: +9.1% (RPK) TRAFFIC, +7.1% (ASK) CAPACITY, 75.2% LF (+1.4), +12.1% (FTK) FREIGHT.

5 737-228'S (23002; 23005; 23011; 23349; 23504) RETURNED TO TRITON (TIA), LEASED TO AUSTRAL (ALA). 747-100 (20798) PARTED OUT. A319-111 (1169, F-GRHI), & A340-313X (319, F-GLZT) DELIVERIES.

MARCH 2000: CODE SHARE WITH TACA (TAC), MIAMI (MIA) - GUATEMALA CITY.

AIR FRANCE (AFA) INDUSTRIES HEAVY MAINTENANCE CONTRACTS FOR 3RD CORSAIR (COR) 747-200, AIR CALIN (NCI) A310, & AEROLINEAS ARGENTINAS (ARG) 747-200.

3 ORDERS (4/01) 777-2Q8ER'S, (ILF) 5 YEAR LEASED. +1 ORDER (/01) A320 & +1 ORDER (/02) A321. 2 A319-111'S (1176, F-GRHJ; 1190, F-GRHK) DELIVERIES.

APRIL 2000: 55,747 EMPLOYEES (INCLUDING 3,434 FLIGHT CREW (FC), & 10,017 CABIN ATTENDANTS (CA)).

(http://www.airfrance.net). SITA: PARSXAF.

SOLD 737-228 (23002). DONATES 747-100 (F-BPVJ) TO THE MUSEE DE L'AIR ET DE L'ESPACE, PARIS-LE BOURGET. A319-111 (1201, F-GRHL) DELIVERY.

MAY 2000: 1999 FISCAL YEAR (FY) = +$330 MILLION (+42%), EXCEEDING ANALYSTS ESTIMATES, AND HIGHLIGHTING ITS ALLIANCE WITH DELTA AIRLINES (DAL), AND COST SAVINGS PLAN: +12.1% (RPK), +11.2% (ASK); +$146 MILLION ONE-TIME GAIN FROM SALE OF EQUANT SHARES, +36% FUEL COSTS, 37.05 MILLION PASSENGERS (PAX) (+10.6%). 1999 AIR FRANCE (AFA) GROUP = 37 MILLION PASSENGERS (PAX) (+10.6%).

CODE SHARE WITH DELTA AIRLINES (DAL), TO LOME, TOGO. TO (DAL)'S CINCINNATI HUB (767-300ER, DAILY).

AIR FRANCE (AFA) CARGO, TO FORM JOINT VENTURE WITH DELTA AIRLINES (DAL) CARGO DIVISION, CALLED "DELTA AIR LOGISTICS."

IN 4TH QUARTER, WILL CONVERT 747-200 COMBI TO ALL-FREIGHTER, USING ISRAELI INDUSTRIES (IAI), SUPPLEMENTAL TYPE CERTIFICATE (STC) KIT.

JUNE 2000: CODE SHARE WITH DELTA AIRLINES (DAL), ATLANTA - LIMA (757). NEW GLOBAL ALLIANCE DELTA AIRLINES (DAL) - AIR FRANCE (AFA) - KOREAN AIR (KAL)- AEROMEXICO (AMX) NAMED "SKYTEAM," TO MATCH "ONEWORLD" AND "STAR" ALLIANCES.

AFTER EMIRATES (EAD), AND SINGAPORE AIRLINES (SIA), AIR FRANCE (AFA) BECOMES 3RD AIRLINE TO EXPRESS INTEREST IN A380, WITH 10 (LOI) ORDERS.

JULY 2000: IN OCTOBER, CODE SHARE WITH IBERIA (IBE), TO BILBAO, VALENCIA, ALICANTE, SEVILLE, AND OVIEDO. ALSO, TO SANTIAGO, VIA MADRID.

55,199 EMPLOYEES.

ACCDT: CONCORDE (203, /75) CRASHES ON TAKEOFF FROM PARIS (CDG), WITH ENGINES ON FIRE, HITS HOTEL-RESTAURANT COMPLEX = ALL 9/100 FATALITIES, + 4 ON GROUND. - - SEE FOLLOWING LATER (DECEMBER 2010 COURT FINDING: December 2010: ACCDT: A Paris court has said Continental Airlines (CAL) was “criminally responsible” for the crash of an Air France (AFA) Concorde supersonic jet (203, /75) 10 years ago in June 2000, and fined it 200,000 euros and ordered to pay 1 million euros to Air France (AFA), which operated the doomed flight. (CAL) Mechanic (MT), John Taylor received a fine of 2,000 euros and a 15-month suspended prison sentence.

Continental Airlines (CAL) vows it will appeal a French judge’s ruling that the airline and one of its employees was guilty of involuntary manslaughter in the July 25, 2000, crash of an (AFA) Concorde, in which 113 persons died, including four on the ground. (CAL) was fined €200,000/$268,234 and ordered to pay Air France (AFA) €1 million related to the accident. A (CAL) mechanic (MT) was also found guilty and received a suspended jail sentence of 15 months. Three French officials (a former Aerospatiale executive and two representatives, at the time, of the French civil aviation agency (DGAC)) were also cleared of contributing to the crash. The French officials were accused of not addressing known Concorde design flaws. During its takeoff run for a flight to New York, AF4590 ran over a metal piece that the court determined fell off a Continental (CAL) DC-10 that had taken off immediately before the Concorde. The supersonic airplane’s fuel tank was struck by debris and caught fire. It crashed shortly after takeoff to the west of Paris Charles de Gaulle Airport as it tried to divert to Le Bourget Airport. All 113 people on board were killed. The airplane never recovered after a 16-month grounding and was finally taken out of service in 2003.

See video on (AFA) Concorde crash:

1999 TOP WORLD AIRLINES COMPARISONS:
TRAFFIC (RPK) (BILLION): 1 UAL 201.9; 2 AAL 177.3; 3 DAL 168.6; 4 NWA 119.3; 5 BAB 117.5; 6 CAL 93.4; 7 AFA 83.7; 8 JAL 82.9; 9 DLH 81.4; 10 USA 66.9.

NET ($ MILLION) PROFIT: 1 DAL 1,285; 2 UAL 1,235; 3 AMR 985; 4 SIA 737; 5 DLH 633; 6 SWA 474; 7 CAL 455; 8 FED 442; 9 AFA 340; 10 KLM 324.

EMPLOYEES (1,000): 1 UPS 308; 2 FED 150; 3 UAL 96.7; 4 AAL 86.1; 5 DAL 72; 6 DLH 66.2; 7 DHL 60; 8 AFA 55.2; 9 BAB 53.1.

(FTK) FREIGHT TRAFFIC (BILLION): 1 FED 10.31; 2 LUB 7.07; 3 UPS 6.02; 4 KAL 5.96; 5 SIA 5.48; 6 AFA 4.73; 7 BAB 4.54; 8 JAL 4.42; 9 KLM 4.15.

FISCAL YEAR (FY) 1999 AIR FRANCE (AFA) GROUP = +$340.17 MILLION (+$239.67 MILLION): 83.74 BILLION (RPK) (+12.3%); 76.1% LF; 4.73 BILLION (FTK) (+2.9%); 37.02 MILLION (PAX) (+11.6%).

2 A319-111'S (1267, F-GRHN; 1271, F-GRHO) DELIVERIES.

AUGUST 2000: WITH SKYTEAM PARTNER DELTA AIRLINES (DAL), CODE SHARES PARIS (CDG) TO DOUALA (CAMEROON) (A310, 6/WEEK) & BEYOND, TO YAOUNDE (3/WEEK).

(http://www.airfrance.com).

(CFM56-5B) COMPONENT SUPPORT CONTRACT FOR NOUVELAIR (NOU) 6 A320'S. MAINTENANCE/COMPONENT SUPPORT FOR KHALIFA (KHZ) 5 A310-300'S.

1 737-5H6 (2484-26448, /93 12 16), EX-MALAYSIA (MAS), GECAS (GEH) 5 YEAR LEASED. 1 A319-211 (1299, F-GTAI) DELIVERY. 2 A320'S (V2500) (414; 430), EX-KHALIFA (KHZ), TRANSAER (TSD) WET-LEASED TIL NOVEMBER.

SEPTEMBER 2000: CODE SHARE WITH DELTA AIRLINES (DAL) TO NOUAKCHOTT, MAURITANIA (A310).

PIERRE VELLAY, CORPORATE VP NEW AIRCRAFT & FLEET PLANNING STATED: "THE 777 CONTINUES TO MEET AIR FRANCE (AFA) EXPECTATIONS, IN TERMS OF GLOBAL PERFORMANCE, AND PASSENGER APPEAL, AND (AFA) IS PLEASED TO ADD THESE AIRPLANES TO THE (AFA) FLEET."

SKYTEAM CARGO, INCLUDING (AFA) CARGO, AEROMEXICO (AMX) CARGO, DELTA AIRLINES (DAL) AIR LOGISTICS, & KOREAN AIR (KAL) CARGO, OPERATE 1,070 AIRPLANES, 6,810 DAILY FLIGHTS, TO 411 DESTINATIONS (INCLUDING 12 MAJOR HUBS), IN 100 COUNTRIES.

1 737-5H6 (2654-27356, /94 10 13), EX-MALAYSIA, (GEH) 5 YEAR LEASED. 1 767-300ER & 1 A300-600F, CITY BIRD (CBD) WET-LEASED. EXERCISES OPTIONS TO CONVERT TO 4 ORDERS 777-200ER'S, FOR TOTAL 23, BY 4/02.

OCTOBER 2000: 1999 = +$340.17 MILLION (+$239.67 MILLION) (NET PROFIT).

GAINS 100% OF L'AEROPOSTALE (FPO), BY BUYING 50%, HELD BY FRENCH POST OFFICE.

52,721 EMPLOYEES (INCLUDING 3,426 FLIGHT CREW (FC), 9,961 CABIN ATTENDANTS (CA), & 9,332 MAINTENANCE TECHNICIANS (MT)).

CONSIDERING ACCORD WITH STATE-OWNED, HIGH-SPEED TRAIN OPERATOR, "THALYS," TO REPLACE ITS PARIS - BRUSSELS FLIGHTS WITH RAILWAYS SERVICES FROM MARCH 2001, SINCE AIR FRANCE (AFA) DOES NOT MAKE MONEY ON ROUTE, WITH ONLY 60% LF (LOAD FACTOR), & QUALITY OF "THALYS" PRODUCT, IS BETTER WITH TRAINS COVERING 300 KM, IN <80 MINUTES.

$4 BILLION, 10/10 ORDERS 777-300'S. 1 A319-111 (1344, F-GRHP) DELIVERY. JOINT VENTURE WITH UNITED SERVICES, TO PROVIDE A319ACJ EXECUTIVE JET MAINTENANCE AND SUPPORT. 2 ORDERS A319 ACJ'S.

NOVEMBER 2000: IN MARCH 2001 TO SANTIAGO (777, 3/WEEK). IN MAY 2001 TO DALLAS/FORT WORTH (DFW) (A340, DAILY).

2 737-228'S (23003; 23503), RETURNED TO (FSB). 777-228ER (30456, F-GSPM) DELIVERY.

DECEMBER 2000: LAST 6 MONTHS = +$367 MILLION (+38.4%) (+$265 MILLION) RECORD +10.3% (RPK), +5.4% (ASK), 80.7% LF (+3.6), 22 MILLION PASSENGERS (PAX).

AIR FRANCE INDUSTRIES HAS JOINT AGREEMENT WITH DELTA AIRLINES (DAL) TECHNICAL OPERATIONS TO MARKET 3RD PARTY MAINTENANCE WITH 1ST CUSTOMER, 6 A320'S HEAVY MAINTENANCE, FOR IBERWORLD (IBW). ALSO, "4C"/"5Y" CHECKS, FOR AERO LLOYD (ACH) 3 A320'S, & CABIN MODIFICATIONS & SERVICE BULLETINS (SB)'S FOR AUSTRIAN AIRLINES (AUL) 3 A321'S.

CODE SHARE WITH (DAL) TO ISTANBUL, FROM USA, VIA PARIS.

IN 1ST QUARTER 2003, WILL OPEN 35,000 SQ M COMPONENTS FACILITY AT VILLENEUVE-LE-ROI (NEAR ORLY).

4 ORDERS 747-400F'S, TO CONTRIBUTE TO SKYTEAM (STM) ALLIANCE CARGO. 2 777-228ER'S (30457, F-GSPL; 29011, F-GSPN) DELIVERIES. 2 A340-313X'S (373, F-GNIH; 377, F-GLZU) DELIVERIES. +1 ORDER (2/02) A319, FOR TOTAL 17.

JANUARY 2001: JEAN-CYRIL SPINETTA, CHAIRMAN, ELECTED NEW 2001 CHAIRMAN OF ASSOCIATION OF EUROPEAN AIRLINES (AEA).

WILL HIRE +5,000 STAFF OVER NEXT 5 YEARS, TO TOTAL 59,190 (+8%).

2000 = 70.8 BILLION (RPK) (+17.7%), 89.6 BILLION (ASK), 79% LF (+2). 6 MONTHS END 2000-09 = +$365 MILLION.

2 A319-111'S (1404, F-GRHQ; 1415, F-GRHR) DELIVERIES. A319 DELIVERY (AIRBUS'S 500TH AIRPLANE, PRODUCED IN HAMBURG, SINCE PLANT OPENED IN 1994).

TOP WORLD AIRLINES 2000 - TRAFFIC (RPM) TRAFFIC (BILLION):
1 UAL 126.88; 2 AAL 116.51; 3 DAL 107.78; 4 NWA 79.1 5 BAB 73.88; 6 CAL 62.31; 7 DLH 58.52; 8 AFA 57.04; 9 JAL 55.30; 10 USA 46.83; 11 SIA 43.99; 12 ACN 42.38; 13 SWA 42.2.

FEBRUARY 2001: 2 777-228ER'S (30614, F-GSPO; 30615, F-GSPP) DELIVERIES. 1 A320-212 (235, F-GKXB), (GAX) LEASED.

MARCH 2001: 737-228 (23010) RETURNED TO TRITON AVIATION (TIA). 1 777-228ER (28682, F-GSPQ) DELIVERY. SELLS 6 A310-222'S (CF6-80A3) (316; 326; 335; 355; 369; 454) TO FEDEX (FED), CONVERTED TO FREIGHTERS BY (EADS). 2 A319-111'S (1444, F-GRHS; 1449, F-GRHT) DELIVERIES.

APRIL 2001: 59,000 EMPLOYEES.

AIR FRANCE (AFA) INDUSTRIES CONTRACT, WITH VIETNAM (VIE) AIRLINES, FOR "C" MAINTENANCE CHECKS ON 4 A320'S AT TOULOUSE, & 6 A320'S IN HANOI, INCLUDING TRAINING OF (VIE) MECHANICS, & MANAGERS. ALSO, CHINA EASTERN (CEA) 2 A340'S AT ORLY, & 3 A340'S AT SHANGHAI, ALSO INCLUDING TRAINING OF MECHANICS, & MANAGERS.

NEGOTIATING WITH ALITALIA (ALI) ON ALLIANCE, AND POSSIBLE CROSS-OVER STAKES, IN EACH OTHER.

737-228 (23011), RETURNED TO TRITON (TIA). 1 737-5H6 (26450), EX-MALAYSIA (MAS), GECAS (GEF) 4 YEAR LEASED. SOLD 1 737-33A (25138). 6 737-500'S (25206; 25227; 25230; 25231; 25234; 25235), SOLD TO (GEF) AND LEASED BACK FOR 44 MONTHS. 1 737-548 (25165, F-CJUA) (ILF) LEASED, EX-BRAATHENS (BRT). 5 ORDERS (11/01) A319'S; 1 ORDER (3/03) A321, AND 1 ORDER (5/02) 777-200ER, ALL (ILF) LEASED. 1 A319-111 (1471, F-GRHU), (ILF) LEASED, 1 A321-211 (1476, F-GTAG), & 1 A340-313X (399, F-GNII) DELIVERIES. A320-212 (131, F-GLGN) DELIVERY.

MAY 2001: 1 737-5H6 (26450, F-GJNZ), EX-(MAS), (GEF) LEASED. 2 ORDERS 747-400FLR'S. A319-111 (1505, F-GRHV) DELIVERY. A320-212 (132) RETURNED TO (GAX), LEASED TO CANADA 3000 (ATW).

JUNE 2001: FISCAL YEAR (FY) 2000 = +#421 MILLION EURO (+#354 MILLION).

A320-214 (1502, F-GKXC) DELIVERY.

JULY 2001: CONTRACT WITH JOUVE DATA MANAGEMENT TO CONVERT 747, & 767 TECHNICAL MANUALS TO DIGITAL DOCUMENTS.

AIR FRANCE (AFA) INDUSTRIES, TO CONVERT 3RD 747-200 COMBI (22794) TO FREIGHTER FOR COMPLETION IN SEPTEMBER 2001 USING BEDEK (IAI) KIT SUPPLEMENTAL TYPE CERTIFICATE (STC), & COMBINED BOEING/ANCRA CARGO SYSTEMS, WITH (IAI) TECHNICAL ASSISTANCE.

ALITALIA (ALI) BECOMES 6TH MEMBER OF SKYTEAM (STM) ALLIANCE: (AFA); (DAL); (CSA); (KAL); & (AMX).

1 A319-111 (1524, F-GRHW) DELIVERY.

AUGUST 2001: EXPANDS CODE SHARE WITH GRUPO TACA (TAC) BEYOND GUATEMALA, TO INCLUDE EL SALVADOR, NICARAGUA, & HONDURAS (SAN PEDRO SULA).

SEPTEMBER 2001: CONTRACT FOR HEAVY MAINTENANCE OF AERO LLOYD (ACH) 3 A320'S, WITH GUARANTEED 21-DAY, TURN-AROUND-TIME (TAT).

CODE SHARE WITH AIR CALIN (NCI), NOUMEA, TO JAPAN.

STRATEGIC PARTNERSHIP, BETWEEN AIR FRANCE (AFA) INDUSTRIES, AND DELTA AIRLINES (DAL) TECHNICAL OPERATIONS, TO PROVIDE WORLD-CLASS, AVIATION MAINTENANCE SERVICES.

747-228F (22794, F-GCBF) CONVERTED TO FREIGHTER.

OCTOBER 2001: AIR FRANCE (AFA) CARGO TO LIMA, PERU (1/WEEK).

777-228ER (28683, F-GSPR) DELIVERY, (ILF) LEASED.

NOVEMBER 2001: 777-228ER (32306, F-GSPS) DELIVERY. 2 A319-111'S (1611, F-GRHY; 1622, F-GRHZ). RESUMES CONCORDE OPERATIONS.

DECEMBER 2001: SERVICE TO BOSTON.

2 737-228'S (23001; 23005), RETURED TO TRITON (TIA). 2 A319-111'S (1640, F-GRXA; 1645, F-GRXB). 2 OF 8 A330-203'S DELIVERIES.

JANUARY 2002: JOINT VENTURE (JV) BETWEEN AIR FRANCE INDUSTRIES (AFA), AND AAR (ALC), CALLED "SPAIRWISE," TO PROVIDE FULL, COMPONENT MANAGEMENT SUPPORT, TO A320 FAMILY OPERATORS, IN NORTH, AND CENTRAL AMERICA, BASED IN ATLANTA.

AIR FRANCE (AFA), WITH ITS CARGO, JOINT VENTURE (JV) WITH DELTA AIRLINES (DAL), AND KOREAN AIR (KAL), OPENS ITS WORLD HQ, IN ATLANTA HARTSFIELD AIRPORT, UNDER (CEO), BERNARD FRATTINI, WITH NEW 11,000 SQ FT OFFICE, AND INTERNATIONAL STAFF OF 56. HAS REGIONAL OFFICES IN NEW YORK, CHICAGO & LOS ANGELES (LAX).

4TH QUARTER = -6.5% (RPK), 70.6% LF (-5), -30% FUEL COSTS; -$114.5 MILLION.

2001 TOP 50 WORLD AIRLINES - TRAFFIC BILLION (RPM):
1 UAL 116.60; 2 AAL 106.15; 3 DAL 97.60; 4 NWA 73.11; 5 BAB 64.24; 6 AFA 59.54; 7 CAL 58.76; 8 DLH 56.76; 9 JAL 50.77; 10 USA 45.93; 11 SWA 44.50; 12 SIA 42.76; 13 QAN 42.14; 14 ACN 41.49; 15 KLM 35.76; 16 ANA 33.16; 17 CAT 27.81; 18 TII 27.43; 19 IBE 25.64; 20 KAL 23.73; 21 ALI 22.45; 22 MAS 22.29; 23 AMW 19.06; 24 VAA 17.65; 25 VAR 16.02; 26 CHI 16.00; 27 EAD 14.37; 28 SAS 14.26; 29 ANZ 13.54; 30 SAA 12.70; 31 SVA 12.56; 32 BEJ 12.39; 33 ASA 12.23; 34 JAS 10.06; 35 THY 9.35; 36 AMX 8.51; 37 PAL 8.36; 38 GIA 8.15; 39 CMA 7.99; 40 ELA 7.79; 41 GUL 7.65; 42 PIA 7.24; 43 AIN 7.10; 44 TAP 6.43; 45 EGP 5.53; 46 OLY 5.24; 47 AUL 5.06; 48 FIN 4.93; 49 IND 4.52; 50 CQT 4.51.

+2 ORDERS (3/03) 747-400ER'S (CF6-80CE), (ILF) 6 YEAR LEASED. RETIRES 4 A310-300'S, AND WILL RETIRE 4 747-200B'S, BY APRIL 2002. 9 ORDERS (4/04) 777-300ER'S (GE90), (ILF) 6 YEAR LEASED. 1 777-228ER (382-32308, F-GSPT), 1 A321-211 (1658, F-GTAK), & 1 A330-203 (448, F-GZCC) DELIVERIES.

FEBRUARY 2002: CANCELS 2 ORDERS A330-200'S.

APRIL 2002: PHILIPPE WALLET, VP MAINTENANCE.

64,717 EMPLOYEES (INCLUDING 4,375 FLIGHT CREW (FC); 11,367 CABIN ATTENDANTS (CA); & 49,035 MAINTENANCE TECHNICIANS (MT)).

MAIN BASES: PARIS CHARLES DE GAULLE AIRPORT (CDG); & PARIS ORLY AIRPORT (ORY).

HUBS: CLERMONT-FERRAND AUVERGNE AIRPORT (CFE); LYONS-SAINT EXUPERY AIRPORT (LYS); MARSEILLES - PROVENCE AIRPORT (MRS); & BORDEAUX -MERIGNAC AIRPORT (BOD).

MAY 2002: FY 2001 = +#EUR 153 MILLION/+$138 MILLION (-64%): +1.6% RPK; +3.5% ASK; 76.6% LF (-1.6).

TO PUNTA CANA, DOMINICAN REPUBLIC (3/WEEK).

777-228ER (401-32310, F-GSPZ) DELIVERY.

June 2002: 2001 Top World Airlines by Traffic (RPK) Billion):
1 UAL 187.67; 2 AAL 170.88; 3 DAL 163.66; 4 NWA 117.66; 5 BAB 106.27; 6 CAL 98.37; 7 AFA 94.42; 8 DLH 86.70; 9 JAL 84.27; 10 USA 73.93; 11 SWA 71.59; 12 SIA 69.15; 13 QAN 67.89; 14 ACN 67.03; 15 KLM 57.85; 16 ANA 56.90; 17 CAT 44.79; 18 TII 44.04; 19 IBE 41.30; 20 KAL 38.45; 21 MAS 38.31; 22 ALI 36.52; 23 SWS 32.98; 24 TWA 31.85; 25 AMW 30.69.

2001 Top World Cargo Operators Billion (FTK):
1 FED 11.05; 2 LUB 7.08; 3 UPS 5.96; 4 SIA 5.88; 5 KAL 5.57; 6 AFA 5.12; 7 KLM 4.64; 8 JAL 4.19; 9 BAB 4.033; 10 CHI 4.030; 11 NCA 3.93; 12 CAT 3.89; 13 CLX 3.77; 14 EVA 3.28; 15 UAL 2.80; 16 NWA 2.79; 17 AAL 2.56; 18 MTH 2.40; 19 AAR 2.38; 20 DAL 2.31; 21 MAS 1.84; 22 SWS 1.79; 23 TII 1.67; 24 QAN 1.57; 25 AHK 1.55.

Air France (AFA) 2001: +$134.64 Million/+# EUR153 Million (+$370.48): 94.42B RPK (+2.8%); +3.5% ASK; 75.8% LF; 39.07 Million PAX (-.4%); 5.12B FTK; 64,717 EMPL (+9.7%). Jean-Cyril Spinetta, Chairman & (CEO), stated "The North Atlantic has been and continues to be apriority in (AFA)'s expansion policy. We're currently in 5th position, and do not want to be number one, but do want to be on the podium. "Profitability" is the bottom line. (AFA) is convinced that the North Atlantic will remain the largest market for a long while."

3 A321-211'S (674; 5; 84) returned to (GAX), leased to Air Canada (ACN). 1 A330-203 (481, F-GZCF), (ILF) leased.

July 2002: Talks with KrasAir (ZXD), to organize stopovers for Air France (AFA) in Krasnoyarsk, on the way to southeast Asia. Also, discussing joint flights.

2nd Q = +# EUR159 Million/+$157.5 Million (-18%) (+# EUR195 Million): -4.2% RPK; -1.8% ASK; 77.1% LF (-1.9).

In 10/02, code share with Aeroflot (ARO), to Moscow.

A310-300 (CF6-80C2) (502) returned to (ILF).

August 2002: Air France (AFA) Industries, has contract for component support, for Virgin Atlantic (VAA) 10 A340-600'S.

Code share with MNG Cargo Airlines (MHK), Paris (CDG), to Istanbul.

777-228ER (401-32310, F-GSPZ), stored at Victorville, California, USA.

September 2002: Goverment says it hopes to reduce its stake in Air France (AFA), from 54.4%, to between 20 & 25%.

French Defense procurement agency (DGA), awarded a 10-year, # EUR 185 Million/$180 Million contract for on-condition maintenance of (CFM56-2) engines, to (AFA) Industrie, in partnership with Snecma Services, covering about 100 powerplants on C-135 tankers, (AWACS) airplanes, and DC-8's transports.

Plans to add service to Bangalore, and Chennai. Code share with Czech Airlines (CSA), to Vilnius, via Prague.

747-228F (334-21576, N536MC), returned to Atlas Air (TLS).

October 2002: Code share with Corse Mediterranee, Paris Orly (ORY) to Corsica's 4 airports: Ajaccio; Bastia; Calvi; & Figari. In 2001, 850K passengers travelled between (ORY), and Corsica.

3rd Q = +# EUR 57 Million (-35%) (+# EUR 88 Million). Last 6 months end 9/02 = +# EUR 216 Million (-23.7%) (+# EUR 283 Million). Lost -# EUR 80 Million/-$80 Million from 2002-09 pilot's (FC) strike.

1st 6 months Top World Airlines Traffic Billion (RPK):
1 AAL 95.18; 2 UAL 84.56; 3 DAL 74.53; 4 NWA 56.50; 5 BAB 49.30; 6 AFA 48.21; 7 CAL 47.49; 8 DLH 42.06; 9 JAL 39.44; 10 SWA 36.03; 11 SIA 36.00; 12 ACN 33.69; 13 USA 33.06; 14 KLM 27.54; 15 CAT 23.07; 16 IBE 19.53; 17 KAL 16.47; 18 CHI 15.70; 19 AMW 15.20; 20 ALI 14.21; 21 EAD 13.45; 22 VAR 12.68; 23 GUN 12.49; 24 SAS 12.01; 25 BEJ 10.32.

2 747-428ERF's (1315-32866, F-GIUA (ILF) leased; 1317-33096, F-GIUB) deliveries. A330-203 (500, F-GZCH) delivery.

November 2002: 1st 9 months pre-tax = +# EUR 113 Million: +1.1% RPK; +1.8% ASK.

Air France (AFA) and Alitalia (ALI) agreed to take a 2% stake in each other in 2003-01. Expanded its code share with (ALI), for Milan, and Rome, to Ancona, Bari, Brindisi, Ctania, Palermo, and Trieste.

1st 9 months Top World Airlines Traffic (RPK) B:
1 AAL 148.39; 2 UAL 132.89; 3 DAL 123.75; 4 NWA 88.26; 5 BAB 76.23; 6 AFA 74.00; 7 CAL 73.12; 8 DLH 67.07; 9 SIA 55.60; 10 SWA 55.20; 11 JAL 54.81; 12 ACN 54.41; 13 USA 50.38; 14 KLM 48.87; 15 QAN 43.76; 16 CAT 36.14; 17 IBE 30.78; 18 KAL 28.06; 19 AMW 23.82; 20 TII 19.76; 21 ALI 19.68; 22 SAS 18.82; 23 CHI 18.23; 24 VAR 17.47; 25 GUN 17.21.

747-428FER (1318-32867, F-GIUC), (ILF) leased. A320-214 (1873, F-GKXD), (GEF) leased and A330-203 (498, F-GZCG), (ILF) leased. A300C4F-605R (755), Islandsflug (ISF) wet-leased.

December 2002: Code share with Singapore Airlines (SIA), to Singapore. In 2003-01, to Guangzhou.

Will be launch carrier of 777-300ER with 1st airplane delivery in 2004-04.

1 A320-214 (1885, F-GKXF), (GEF) leased, and 3 A330-203's (502, F-GZCI; 503, F-GZCJ) deliveries.

January 2003: Paris (CDG) - Bamako.

2 737-36N's (28672; 28673) returned to (GECAS) (GEF). 2 A320-214's (1879; 1894, F-GKXG) & 1 A321-211 (1859) deliveries.

February 2003: 4th Q/2002 = +# EUR 2 Million/+$2.1 Million (-# EUR 131 Million): +14% RPK; +7.2% FTK. Last 9 months 2002 = +# EUR 218 Million (+43.4%) (+# EUR 152 Million).

747-228F (535-22678, F-GCBE), returned to (CIT) Aerospace (TCI). 767-383ER (263-24358, TF-ATT), Air Atlanta Icelandic (AID) wet-leased. Will retire its 4 767-300ER's in mid 2003. Is deferring deliveries of 4 A319's & A320's, 2 A330's, and 2 ERJ-145's. 2 A320-214's (1900, F-GKXJ, Debis AirFinance (DEA) leased; & (1924, F-GKXH; 1949, F-GKXI) (ILF) leased.

March 2003: Brit Air franchise operations, Paris Orly - Annecy (ATR 72, 2/day). To code share with Air Calin (NCI), Osaka/Tokyo - Noumea. In 2003-05, code share with Austral (AUX), Paris (CDG) - St Denis de la Reunion. In 2003-09, Paris - Guangzhou (5/week).

2002 = 98.10 Billion RPK (+2.7%).

In response to the "deteriorating economical situation" caused by the war in Iraq, will reduce its capacity by -7% ASK in 2003-04. Is postponing deliveries of 7 A320-family airplanes, including its 1st A318.

Air France Industris (AFA) has 7 year contract for component repair and spares for Alitalia (ALI) 10 777's. (ALI) Engineering & Maintenance has 5-year (AFA) contract for (APU) repair and overhaul of 20 747 classics.

747-428ER (1325-32868, F-GITH), (ILF) leased.

April 2003: Along with American Airlines (AAL), is testing Boeing's new data-monitoring and prognostic service, "Airplane Health Management," to ensure its availability to airlines in 1st Q 2004.

World Top 20 Airlines 1st Q Traffic (B) (RPK):
1 (AAL) 44.67; 2 (UAL) 39.66; 3 (DAL) 36.82; 4 (NWA) 26.65; 5 (BAB) 23.31; 6 (AFA) 23.27; 7 (CAL) 21.35; 8 (DLH) 20.62; 9 (SWA) 17.53; 10 (KLM) 14.04; 11 (USA) 13.28; 12 (SIA) 12.20*; 13 (ACN) 9.65*; 14 (CAT) 8.51*; 15 (AMW) 7.84; 16 (QAN)* 7.18; 17 (KAL)* 6.72; 18 (IBE) 6.17*; 19 (EAD) 5.69*; 20 (AAT) 5.42. * 2 months only.

Will withdraw its 5 Concordes from service at end of 2003-05. British Airways (BAB) plans to retire its Concorde fleet of 7 airplanes by the end of 2003-10. The Concorde entered revenue service in 1976-01.

70,156 employees (including 4,886 (FC), & 18,914 (CA)).

May 2003: Enters into a "strategic marketing and operational alliance" with Cargojet Canada (CJT) for the Canadian market.

1st Q (AFA) Group = -# EUR 98 Million (+# EUR 1 Million): due to the difficult economic situation with the Iraq war, and the Severe Acute Respiratory Syndrome (SARS) virus epidemic in Asia. FY 2002 = +# EUR 120M/+$138M (-21.6%) (+# EUR 153 Million).

1 order (2/04) 747-400 (CF6), 2 orders (2/04) 777-300ER's (GE90), & 1 order (2/04) A330-200 (CF6).

June 2003: Air France (AFA) and SkyTeam partners (DAL), (CSA), (AMX), & (KAL) are leasing facilities from airports operator (ADP) in the new purpose-built # EUR750 Million/$892 Million Terminal 2E at Paris Charles de Gaulle (CDG). Alitalia (ALI) operations will remain for now in nearby 2F. Terminal 2E, basically consisting of a main concourse 450 m long and a boarding pier 650 m long, ultimately will have a handling capacity of 17 on-stand parking gates and up to 10 Million passengers/year, with 6 Million passengers/year in the initial phase.

Code share with Finnair (FIN), including connections from Helsinki - Paris to Lyon, Marseilles, Bordeaux, and Nice. Also, including 6 Finland domestic destinations: Turku, Tampere, Oulu, Kuopio, Jyvaskyla, & Vaasa.

Air France Industries (AFA) plans to open # EUR 40M, 27,000 sq m, narrowbody maintenance hangar facility at Toulouse in 4th Q 2003, and a # EUR 86 Million, 41,000 sq m, component repair facility at Villeneuve le Roi, in 3rd Q 2004 to replace its Paris Orly North facilities.

2002 = +$120 Million (+$137M): 97.15B RPK (+2.4%); +2.2% ASK; 76.8% LF (+.2); 39 Million PAX (+1%); 4.86B FTK (-5%); 70,156 EMPLOYEES.

2002 TOP 25 WORLD AIRLINES - TRAFFIC - B - (RPK)
1 (AAL) 195.81; 2 (UAL) 176.15; 3 (DAL) 152.66; 4 (NWA) 115.91; 5 (BAB) 99.71; 6 (AFA) 97.15; 7 (CAL) 95.51; 8 (DLH) Grp 88.57; 9 (JAL) 83.54; 10 (QAN) 75.23; 11 (SWA) 73.05; 12 (SIA) 71.12; 13 (ACN) 69.42; 14 (USA) 69.42; 15 (KLM) 58.89; 16 (ANA) 52.97; 17 (CAT) 49.04; 18 (TII) 48.51; 19 (KAL) 41.80; 20 (IBE) 40.47; 21 (MAS) 36.90; 22 (AMW) 31.98; 23 (SAS) Grp 30.91; 24 (EAD) 30.17; 25 (ALI) 29.84.

2002 TOP 25 WORLD FREIGHT CARRIERS - B - (FTK)
1 (FED) 13.20; 2 (LUB) 7.16; 3 (UPS) 6.62; 4 (KAL) 6.25; 5 (SIA) 6.08; 6 (AFA) 4.87; 7 (CAT) 4.85; 8 (CHI) 4.60; 9 (JAL) 4.39; 10 (CLX) 4.16; 11 (BAB) 4.12; 12 (KLM) 3.99; 13 (EVA) 3.28; 14 (NWA) 3.24; 15 (AAL) 2.93; 16 (UAL) 2.79; 17 (AAR) 2.75; 18 (NCA) 2.21; 19 (POA) 1.97; 20 (EAD) 1.96; 21 (MAS) 1.92; 22 (BEJ) 1.88; 23 (TII) 1.824; 24 (DAL) 1.823; 25 (ACN) 1.58.

(AFA) donated Concordes to museums: at Sinsheim, Germany (207); Le Bourget (213); & to an air park being constructed in Toulouse (209).

July 2003: 59,000 employees. SITA: PARSXAF.

At the shareholders (AGM), resolutions were approved that will permit the French state, which owns 54% of Air France (AFA), to reduce its stake.

(AFA) Group FY 2002 = +$129.60 Million (+$165.34 Million): 96.80B RPK (+2.5%); 77.2% LF; 38.05M PAX (-2.6%); 4.87B FTK (+3.5%).

August 2003: According to a French newspaper, Air France (AFA) will take a 100% controlling interest in (KLM) through a share swap. Following the transaction, the French state will sell 20% of its 54% stake on the market reducing its holding in the combined entity to under 20% stake in (AFA), while (KLM) shareholders will receive 15% of the goverment stake in (AFA).

2 orders (5/04) A319-100ER's (CFM56-5B7/P), (ILF) 6 year leased.

2nd Q = +# EUR 4M/+$4.3M (+# EUR 159M).

September 2003: In 2004-01, Paris (CDG) - Guangzhou (Baiyun) (5/week).

(AFA) board approves merger with (KLM) to be completed by 2004-04, to give the European Commission (EC) enough time to analyze the deal. The airlines will be placed under a France-based corporate holding company umbrella named Air France (AFA) - (KLM), which effectively makes it the world's 3rd largest airline.

+1 order (2/05) 777-300ER (ILF) 6 year leased.

October 2003: 3rd Q = 27.54B RPK (+4.5%); +4.4% ASK; 78.1% LF (+.1). Last 6 months = 51.28B RPK (-.5%); +.7% ASK; 76.4% LF (-.9).

Air France (AFA) merger with (KLM) will finalize in 4/04.

Code share with (TACA) International (TAC), Miami - Guatemala City, Managua, San Pedro Sula, and San Salvador. Code share with Tarom (TRM), Bucharest - Paris. Code share with Aeroflot Russian Airlines (ARO), Moscow - Paris.

1st A318 (CFM56-5B) (2035, F-GUGA) delivery. +1 order (10/04) A319-100ER (CFM56-5B7/P), (ILF) 6 year leased.

November 2003: Last 6 months ending 9/03 = +# EUR 62M/+$62.1M (-74.3%) (+# EUR 202M): due to the impact of the Iraq war and the (SARS) outbreak, as well as "sluggish economies" in France and other European nations. 3rd Q = +# EUR 48M (-14.3%) (+# EUR 56M): 78.1% LF (+.1).

Conducted an auction of Concorde components and souvenirs raising $3.9 Million for the Air France Foundation, a charity for under-privileged children. One of the items sold by the Christies auction firm, was a Concorde nose cone, which fetched $550,000.

In 2004-01, code share with China Southern (GUN), Guangzhou - Paris.

December 2003: F 100, (EU) JET wet-leased for Nice - Lyon.

January 2004: 4th Q (AFA) Group = + EUR 28M/+$35.8M (+33%) (+# EUR 21M): +3.4% RPK; +2.7% ASK; 75.9% LF (+.5). Last 9 months = + EUR 80M (-64.1%) (+ EUR 223M). 2003 = 99.59B RPK.

Japan Air Lines (JAL) becomes 3rd carrier after American Airlines (AAL) and Air France (AFA) to agree to become a "developmental partner" for Boeing's Airplane Health Management (AHM) system, in what will be a 4 month pre-release test. (AHM) gathers data about airplane systems and relays it in real time via datalink to technical personnel on the ground, similar to the Airman system developed by Airbus for its fly-by-wire airplanes.

Paris (CDG) - Malabo, Point Noire (A319). In 2003-03, Code share with Japan Air System (JAS), Nagoya - Paris (CDG) (777-200ER).

A330-203 (567, F-GZCM) delivery.

February 2004: USA Department of Justice and European Commission give OK for (KLM)/Air France (AFA) merger. The airlines agreed to give up 94 takeoff and landing slots on routes between Amsterdam and Atlanta, Bologna, Bordeaux, Lagos, Lyon, Marseille, Milan, New York, Paris, Rome, Toulouse, & Venice, and between Paris and Detroit and Lagos.

In 2004-03, code share with Vietnam Airlines (VIE), Paris - Hanoi & Ho Chi Minh City.

March 2004: Summer schedule to increase capacity by +9% (ASK)s with 7 new destinations to its network: Canton (Guangzhou); Teheran; Pointe-Noire; Malabo; Kuwait City; Doha, & Tashkent. Capacity on domestic routes will increase +7% ASKs.

Air France (AFA) Cargo summer schedule to increase by +13% (FTK), with Paris to New York (JFK), via Atlanta (747-200F, weekly), Paris to Malabo (Equatorial Guinea) (A300-600F, Islandsflug (ISF) wet-leased, weekly), for 52 flights/week to 51 destinations.

737-53S (29075) returned to Pembroke (PEB), leased to Air Baltic (BAU). A320-211 (204) returned to (GEF). A320-211 (211), returned to Debis AirFinance (DEA).

April 2004: FY 2003 = +# EUR 93M/+$111.1M (-22.5%) (+# EUR 120M): 101.64B RPK (+1.7%); +2.4% ASK; 75.6% LF (-.5); 43.7M PAX (+1.7%); 5.43B FTK (-.2%). 1st Q = +# EUR 13M (-# EUR 103M).

Delta Airlines (DAL) and Air France (AFA) began interline e-ticketing.

Opens a call center in Guangzhou, becoming the first western airline to establish one in China.

European Commission (EC) OK's an alliance between Alitalia (ALI) and Air France (AFA) after the carriers agreed to surrender 42 pairs of slots/day, 19 of which will come from Paris Charles De Gaulle (CDG) and Orly (ORY) Airports on routes between France and Italy. The alliance will give (ALI) customers access to >100 new destinations while (AFA) customers will be offered about 20 new routes. The agreement enables the two carriers to cooperate across their respective networks in terms of pricing, scheduling and capacity.

(AFA) Cargo, Paris (CDG) - New York - Atlanta - Paris (747-200F, 4x-weekly.

747-428 (1343-32871, F-GITJ) & 1 747-428FER (1344-32870, F-GIUD), both (ILF) leased, deliveries, the latter to replace a 747-200F. Launch customer of 777-328ER (28623, F-GSPR; 466-32723, F-GSQA; 1343-32971, D) with 1st delivery, (ILF) leased. It carries 365 passengers (PAX) up to 7,705 nautical miles (14,270 km).

A318-111 (2109, F-GUGF), delivery.

May 2004: In early days of the merged Air France (AFA)/(KLM) airline, has coordinated schedules throughout the short-, medium-, & long-haul networks of both carriers. Three new services Amsterdam - Bordeaux, Amsterdam - Marseilles; & Paris (CDG) - Rotterdam. In 2004-06, (AFA) begins code sharing with (KLM) on all services between Paris (CDG2) and Amsterdam, incl those operated by affiliates of both companies, for a total of 15 flights on weekdays.

Has acquired nearly 90% of (KLM). The combination represents the 1st cross-border merger of major European airlines and creates a company that ranks as the 3rd largest company in the world after American Airlines and United Airlines in terms of passenger traffic (RPK's). The new company, Air France (AFA) - (KLM), will own 100% of both airlines but (KLM) will remain Dutch, with 51% of its voting rights held by the state and two foundations. That structure will allow (KLM) to retain its foreign landing rights. The stake of the French state in Air France will fall to 44.7% from around 54%. Air France staff hold 10.5% of the new company, and former (KLM) holders (17.3%). Some 45% of the firm will be traded on the market.

Paris (CDG) - Malabo freighter service (A300, Islansflug (ISF) wet-leased weekly). In 2004-06, Paris (CDG) - Kuwait City (A319, 3/week), - Doha (A319, 3/week), - Tashkent (A319, 2/week).

Air France (AFA) Industries and Lufthansa Technik (DLH) (LTK) signed an agreement to offer component support services jointly for the A380. The accord included providing component services for the future A380 fleets of (AFA) & (DLH), which together have paced orders for 25 A380's, and also for 3rd party customers. Under the scheme, the two will furnish component repair, management of a component pool with all required logistics services, and comprehensive component servicing at airlines' A380 main bases as well as outstations.

A 160-by-100-ft section of the Paris Charles de Gaulle (CDG) futuristic new Terminal 2E collapsed, killing 4 people and injuring several more. The $900 Million cylindrical concrete, steel and glass terminal, which was opened last June 2003 after several construction delays, is used primarily by Air France (AFA) and its SkyTeam partners. The collapse, which began when a section of roof gave way after passengers alerted police to cracks and falling dust, occurred as (AFA) flights from New York and South Africa were unloading passengers. At least 60 flights were delayed as airplanes were sent to other terminals.

737-33A (24025) returned to AWAS (AWW). 777-328ER (478-32724, F-GSQB) delivery.

June 2004: Launches reciprocal e-ticketing with (KLM).

Increases its "Dedicate Program" with 3 new nonstop destinations: Doha, Tashkent, & Kuwait. Paris (CDG) - Doha & Tashkent (A319ER, 28F "l'Espace Affaires; 54C "Tempo" 2/week). Paris (CDG) - Kuwait (A319ER, 3/week). Paris (CDG) - Pointe Noire (A319ER 3/week). The Dedicate Program is designed to serve specific corporate travel requirements of professionals involved in natural gas and oil industries and construction projects with services to Malabo & Pointe Noire.

Resumes Paris (CDG2) - Tehran (A330-200, 211 PAX, 3/week), after a 7-year halt. In October, code share with Qantas (QAN), France - Australia: Adelaide, Brisbane, Darwin, Melbourne, Perth, & Singapore - Sydney.

SkyTeam: Aeroflot (ARO) (applicant); Aeromexico (AMX); Air France (AFA)/(KLM); Alitalia (ALI); (CSA) Czech Airlines; Continental Airlines (CAL) (agreed to join); Korean Air (KAL); & Northwest Airlines (NWA) (agreed to join).

737-33A (24027), returned to Ansett Worldwide (AWW), leased to Air Plus Comet (APZ). 777-328ER (32727, F-GSQC) delivery. 2 A319-115LR's (2213, F-GRXG; 2228, F-GRXH), (ILF) leased.

September 2004: 777-328BER (32726, F-GSQD) & A319-115 (2279, F-GRXI) deliveries.

October 2004: Air France (AFA) (23.36%), Iberia (IBE) (18.5%), & Lufthansa (DLH) (5.05%) have begun their sale of their 46.91% shareholding in Amadeus Global Travel Distribution.

Air France (AFA) Industries plans to set up a Maintenance Repair & Overhaul (MRO) in Paris for the (GP7200) engines which will be used on the A380.

777-328ER (32851, F-GSQE) & A318-111 (2317, F-GUGG) deliveries.

November 2004: Resumes service to Abidjan. Next month, adds A319 "Dedicate" service, Paris - Riyadh.

737-33A (25118) returned to AWAS (AWW).

December 2004: Resumes Paris (CDG) - Punta Cana, Santo Domingo, Amman, Damascus, Brazzaville, Kinshasa, Antananarivo. Code share with Qantas (QAN), Singapore - Adelaide, Brisbane, Darwin, Melbourne, Perth, Sydney. In March, Paris (CDG) - Belgrade, Zagreb. In 2005-05, Paris (CDG) - Detroit (A330-200, daily), resume Paris (CDG) - Cincinnati (daily).

The French Government announced the sale of 18.4% of Air France (AFA).

737-528 (25234, F-GJNI), returned to (GEF), leased to Aerolineas Argentinas (ARG). 2 777-328ER's (32849, F-GSQF; 32850, F-GSQG), deliveries. 2 A318-111's (2344, F-GUGH; 2350, F-GUGI), deliveries.

January 2005: Next month, code share with Japan Airlines (JAL), Paris - Nagoya (777-200).

The Air France (AFA)-(KLM) Group created a so-called Cargo European House that it described as "a unified management body" for the carriers' cargo businesses. It should be operational by year end and will be in charge of network management, marketing & sales, with each airline continuing to manage its own operations.

737-528 (25235), returned to (GEF), leased to Aerolineas Argentinas (ARG).

February 2005: Code share with Continental Airlines (CAL), whereby (CAL) will place its code on Air France (AFA) flights from Paris (CDG) to 12 destinations in Europe & the Middle East, while (AFA) will code share on flights from Newark & Houston to 21 destinations in the USA.

Converted 7 options 777-328ER's to orders due April 2006. 777-328ER (32711), delivery.

March 2005: Air France (AFA)/(KLM) have merged their frequent-flier programs into one new program called "Flying Blue."

Summer schedule for Air France (AFA) Cargo, to Mexico (747-400ERF, increased to 4/week with 4th returning via Guadalajara). New freighter services to Algiers (A300-600F) and Guangzhou (747-400ERF, 2/week).

Exercised options to purchase +4 (April 2006) 777-300ER's (GE90-115B) valued at $920 Million. States it will replace its 8 747-300F's with 777-200LRF freighters hopefully by the end of 2008. The freighter should be able to carry 222,000 lbs of cargo up to 5,200 nautical miles.

2 777-328ER's (32725, F-GSQI; 32852, F-GSQJ), (ILF) leased. 1 A319-115LR (2456), (ILF) leased.

April 2005: 737-548 (25165) returned to (AWAS) (AWW), leased to Bulgaria Air (LZB).

May 2005: Air France (AFA) operates international scheduled passenger and cargo services to 189 destinations in 84 countries.

71,654 employees (including 5,041 Flight Crew (FC); 13,044 Cabin Attendants (CA); & 53,569 Maintenance Technicians (MT))).

(IATA) Code: AF - 057. KL - 074.

(ICAO) Code: AFR (Callsign - AIRFRANS). KLM (Callsign - KLM).

Parent organization/shareholders: Air France (AFA) - (KLM) Group (100%).

Owns: Regional (100%); CityJet (100%); Brit Air (100%); (KLM) (96%); Air Ivoire (38.97%); Austral (AUX) (33.36%); (CCM) Airlines (CCM) (11.95%); Air Tahiti Nui (NUI) (7.5%); Tunisair (TUN) (5.58%); Cameroon Airlines (CAM) (3.57%); Air Madagascar (MAD) (3.48%); Royal Air Maroc (RAM) (2.86%); Air Mauritius (MAU) (2.78%); AirCalin (NCI) (2.09%); Alitalia (ALI) (2%); & Austrian Airlines (AUL) (1.5%).

Alliances: SkyTeam; Aeroflot Russian Airlines (ARO); Air Austral (AUX); AirCalin (NCI); Air Europa (ARE); Air Labrador; Air Mauritius (MAU); Air Seychelles (ASY); Air Tahiti Nui (NUI); Air India (AIN); Austrian Airlines (AUL); bmi (BMI); Brit Air; Bulgaria Air (BUL); CCM Airlines (CCM); China Eastern Airlines (CEA); China Southern Airlines (GUN); CityJet; Comair (CML); Croatia Airlines (CRH); Estonian Air (ENA); Finnair (FIN); FlyBe (BEE); Japan Airlines International (JAL); Luxair (LUX); Maersk Air (MRS); Malev (HGA); Middle East Airlines (MEA); PGA-Portugalia Airlines; Philippine Airlines (PAL); Qantas Airways (QAN); Regional; Royal Air Maroc (RAM); South African Airways (SAA); TACA International Airlines (TAC); Tarom (TRM); Tunisair (TUN); & Vietnam Airlines (VIE).

Main Base: Paris Charles de Gaulle Airport (CDG).

Hubs: Paris Orly Airport (ORY); Marseilles Provence Airport (MRS); Bordeaux Merignac Airport (BOD); Clemont Ferrand Auvergne Airport (CFE); & Lyon Saint Exupery Airport (LYS).

Domestic, scheduled destinations: Ajaccio; Annecy; Avignon; Bastia; Biarritz; Bordeaux; Brest; Calvi; Clemont-Ferrand; Lannion; Le Havre; Lille; Limoges; Lourdes/Tarbes; Lyons; Marseilles; Metz/Nancy; Montpellier; Nantes; Nice; Paris; Pau; Perpignan; Rennes; Rouen; Strasbourg; Toulon; & Toulouse.

International, scheduled destinations: Abidjan; Algiers; Amman; Amsterdam; Antananarivo; Athens; Atlanta; Bamako; Bangkok; Bangui; Barcelona; Basle/Mulhouse; Beijing; Beirut; Berlin; Bogota; Bologna; Boston; Brazzaville; Brussels; Bucharest; Budapest; Buenos Aires; Cairo; Caracas; Casablnca; Cayenne; Chicago; Conakry; Copenhagen; Cotonou; Dakar; Damascus; Delhi; Djibouti; Douala; Dubai; Dusseldorf; Florence; Fort de France; Frankfurt; Geneva; Genoa; Guangzhou; Hamburg; Hanoi; Havana; Ho Chi Minh City; Hong Kong; Houston; Istanbul; Jeddah; Johannesburg; Kiev; Kinshasa; Kuwait; Lagos; Libreville; Lisbon; Lome; London; Los Angeles; Luanda; Madrid; Malabo; Malaga; Manchester; Marrakech; Mauritius; Mexico City; Miami; Milan; Montreal; Moscow; Mumbai; Munich; Naples; Ndjamena; New York; Newcastle; Niamey; Noualchott; Osaka; Oslo; Ougadougou; Papeete; Philadelphia; Pointe Noire; Pointe-a-Pitre; Port au Prince; Port Harcourt; Porto; Prague; Punta Cana; Rabat; Rio de Janeiro; Riyadh; Rome; San Francisco; Santiago; Santo Domingo; Sao Paulo; Seoul; Shanghai; Singapore; Sofia; St Denis de la Reunion; St Maarten; St Petersburg; Stockholm; Stuttgart; Tashkent; Tehran; Tel Aviv; Tokyo; Toronto; Tunis; Turin; Valencia; Valladolid; Venice; Verona; Vienna; Warsaw; Washington; Yaounde; & Zurich.

Fiscal Year (FY) Air France (AFA)-(KLM) Group 2004 = +EUR 770 Million/+$929.7 Million (+EUR 351 Million): +33.3% fuel costs.

5/3 orders 777-200F's. 3 747-400 Combis (currently configured as all-passenger) to be converted to full freighters by Boeing (TBC). Will receive a strengthened main-cabin floor, a full main-deck lining and provisions for a new cargo handling system with an upgraded flightdeck. First modified airplane by June 2007. These converted airplanes will accelerate the phasing out of the 747-200F's in preparation for entry into service (EIS) of the 777-200F's.

June 2005: Air France Industries (AFA) signed with Lufthansa Technik (DLH) (LTK) to launch Spairliners GmbH, a 50/50 joint venture (JV) that not only will support the 25 A380's ordered by (AFA) & (DLH) ut will offer a "full sprectrum of support services for components to all A380 operators worldwide." Spairliners will operate as a standalone company with 7 employees initially with the (CEO) from (AFA) and the (CFO) from (DLH) (LTK) and will be based at Paris Charles de Gaulle (CDG).

Air France Industries (AFA) acquired a 40% stake in Miami-based airplane component repair and services provider, Aero Maintenance Group with an option to increase its interest to a majority. Is part of (AFA) Industries' desire to increase its presence in the USA as part of its goal to provide a worldwide network of "proximity" Maintenance Repair & Overhaul (MRO) solutions to its clients. Last year its (MRO) entities combined for more than >EUR 2.6 Billion in revenues, maintaining 900 airplanes for more than >100 clients including (AFA) and (KLM). Approximately 30% of its business comes from outside the group.

Adria Airways (ADR) will perform maintenance work on A319's, A320's, & A321's for Air France (AFA) Industries, starting with 10 airplanes this year.

747-428ERF (33097, F-GIUE), delivery.

July 2005: INCDT: A330-200 (481, F-GZCF) on landing at Port Harcourt, Nigeria, struck 7 cows that were apparently sleeping on the runway. The airplane was able to reach its final parking position under its own power and the 198 passengers were able to disembark normally. A subsequent inspection revealed damage to the right main landing gear and penetrations, possibly made by cow horns, to one tire and the airplane hull. Apparently local airport officials rushed immediately to the scene and shared the beef among them. The incident closed the airport and forced Air France (AFA) to cancel the return flight to Paris later in the day. (AFA) maintenance technicians (MT) arrived at the scene the following day to begin patching up the airplane and estimated that it would take at least 2 weeks before the airplane could be ferried empty back to Paris for final repairs. (AFA) has complained several times about the presence of cattle on the runway and will be seeking compensation from the Nigerian authorities. The authorities have since "beefed" up their security and ordered soldiers of the Nigerian Air Force to shoot-on-sight any animal that strays onto the premises of Port Harcourt International Airport.

August 2005: ACCDT: A340-313X (289, /99 F-GLZQ), crashed on landing in severe weather conditions (lightning strike) at Toronto Pearson International Airport, overshot the runway, ended up in a ravine and broke up, with the wreckage catching fire = 12/297 all survived with 43 sustaining minor injuries. The A340-313X (289) airplane was written-off (W/O).

The Canadian inquiry says the accident was caused by rapidly changing stormy weather conditions and insufficient real-time information to the crew (FC) to allow them to make a safe decision about whether to land or go around.

Air France (AFA)/(KLM) = 102,722 employees.

September 2005: Air France (AFA) - (KLM) said two board positions remain vacant after the death of Willem Duisenberg in August and the resignation of Christian Paris.

September 2005: Citing "the strength of the combined networks of Air France (AFA) and (KLM)" and its strategy of targeting "fast-growing markets in Latin America and Asia, as well as to oil and gas destinations," (AFA) said it is raising system capacity (ASKs) +6.4% in the 2005 - 2006 winter schedule compared to the 2004 - 2005 schedule, with intercontinental capacity up +8.6%. Latin America will see a +25% increase in ASKs versus the year-ago period with additional flights to Sao Paulo and new nonstop service to Santiago three times per week in addition to continuing service over Buenos Aires three times weekly. Services added last summer will be maintained over the winter on routes to Rio de Janeiro, Caracas, Bogota and Mexico City.

Asia capacity will rise +13% with new services to China and opening of the Paris - Bangalore route from October 30 with 5x-weekly flights. Frequencies to Tokyo Narita will rise to 20 per week and service to Vietnam will become nonstop.

For Africa and the Middle East, capacity will be up +11%, with additional services to Johannesburg bringing the weekly total to 10 while Amman gets it 6x-weekly flight. The Dedicate service operated with specially configured A319s will be increased to Malabo, Nouakchott and N'djamena. Services added last summer will be maintained over the winter to Port Harcourt, Cotonou and Dubai.

(AFA) also is tweaking schedules and adding services elsewhere in the network while coordination with (KLM) continues. (AFA) has taken over all services to Malabo while all flights to and from Kuwait will operate out of Amsterdam. The respective Amsterdam and Paris hubs are connected by 15 daily services.

October 2005: Air France Industries (AFA) is investing €23 million/$27.6 million to open an additional (GE90) disassembly line at Paris Orly, scheduled for completion in the second quarter of 2006. (AFA) also is extending its (GE90) in-house capability to include full overhaul of the high-pressure compressor module (current capability covers partial repair up to forward cases and extension case refurbishment) as well as the LPT/LPC in 2008. (GE90-115B) capability is planned for 2007.

Sichuan Airlines (SIC) selected Air France Industries (AFA) to carry out three A320 "D" checks scheduled for completion by the end of November. Air France (AFA) - (KLM) Group is extending its French spoke network to (KLM)'s Amsterdam hub with a new 2x-daily service between Strasbourg and Schiphol. The route, on which (AFA) and (KLM) will codeshare, will commence October 31 and will be operated by Regional, an (AFA) partner, with ERJ-135s. Air France (AFA) and (KLM) already link Bordeaux, Clermont-Ferrand, Lyon, Marseille, Nice and Toulouse to Amsterdam. They will launch a Paris - Eindhoven route October 30 with 2x-daily flights, increasing to 3x- December 12.

Air France (AFA) will start a 5x-weekly service from Paris Charles de Gaulle 2 to Bangalore October 30 using three-class A330-200s. During the winter schedule it will operate 35x-weekly flights to five cities in India.

A318-111 (2582, F-GUGJ), delivery.

November 2005: Air France (AFA) introduced a 777-200 to its nightly Paris - Dubai service, increasing weekly capacity by +16%. The airplane will seat 270 in a three-class configuration. The airline also started a 5x-weekly service from Paris to Bangalore using three-class A330-200s. Air France (AFA) will inaugurate nonstop service from Bordeaux to Rome (FCO) on Mar 29th. Regional will operate 2x-weekly, on Sat/Sun, using an Embraer EMB-145.

Air France (AFA) signed a deal with Club Med for the 2006 summer season. The airline will provide 2 A320s from Apr 8th through Nov 4th with a 3rd one from mid-July to the end of Aug and will operate flights from Paris Orly to Agadir, Ajaccio, Athens, Calvi, Djerba, Marrakech and Tunis.

Air France (AFA) - (KLM)'s October passenger traffic increased +8.9% to 16.12 billion (RPK)s on + 6% higher capacity of 19.73 billion (ASK)s. Load factor improved by 2.2 points to 81.7% LF. (AFA) - (KLM) carried more than >6 million passengers, up +5.3% on October 2004.

Air France (AFA) - (KLM)'s net earnings nearly quadrupled in the fiscal second quarter ended September 30, soaring to +€717 million/+$846.8 million from +€195 million in the year-ago period as traffic rose and the sale of the company's stake in Amadeus resulted in a +€504 million capital gain. "These very strong interim results reflect the strategic rationale of the merger and validate our strategy of profitable growth," Chairman, Jean-Cyril Spinetta said in a statement. "The strong traffic which we are continuing to see, together with the level of our advance bookings, make us confident that we will be able to sustain these good results over the year as a whole."

Quarterly operating income increased more than +200% from +€352 million to +€1.06 billion on a +10.2% growth in turnover to €5.64 billion from €5.12 billion and a +7% rise in operating expenses from €4.78 billion to €5.11 billion. Fuel costs were up +29%, but the company mitigated that with a -14.6% decline in commercial and distribution costs and a -9% reduction in Maintenance Repair & Overhaul (MRO) expenses. Excluding special items like the Amadeus sale, operating profit grew +55.8% from +€339 million to +€528 million.

For the three months ended Sept 30, passenger traffic rose +9% (RPK) on a capacity increase of +5% (ASK) and load factor improved +2.2 points to 84.2% LF. This was +3.7 points above the (AEA) average, which the group noted reflected "the reinforced position of Air France (AFA) - (KLM) in the market." (AFA)-(KLM) market share in Europe was 27.5% compared to Lufthansa (DLH)'s 17% and British Airways (BAB)'s 16%.

Yield was up +1.3% to 8.3 cents and RASK rose +5.1% to 6.98 cents despite the transition to the zero commission system, which limited the increase by about 1.5 points. Cargo traffic remained sluggish but unit performance strengthened, with load factor falling -3 points to 62.9% LF but (RATK) rising +6.2% and yield climbing +11.2%.

For the semester, the group showed net income of +€829 million, a +17.1% gain over the +€708 million profit reported in the year-ago period. Turnover climbed +7.9% to €10.82 billion, operating expenses were up +5.9% to €10.08 billion and income from operating activities rose +32.1% to +€1.29 billion.

Shortly after the results announcement, Spinetta and (KLM) President and (CEO) Leo van Wijk spoke on a variety of topics. Spinetta revealed that (AFA) expects late delivery of its first A380 and hopes to have it ready to fly in its summer 2008 schedule. "Originally it was planned to introduce the A380 on April 1, 2007. Now we have decided together with Airbus to have a late delivery. Anyway, that's no good news for us," he said, adding that the airline first will use the airplane on service to Tokyo.

Van Wijk said the group is not in a hurry to decide between the A350 and 787 and is considering both. In other news, Spinetta said there are no plans to abandon the (KLM) brand; "We announced at the time of our merger that the brand (KLM) will exist at least until 2012. I see the name also beyond this time." Neither (CEO) predicted a ramp-up in mergers across the continent, which van Wijk said is "good for us, to strengthen our position."

Air France (AFA) Industries (AFI) will open a component logistics center at Abu Dhabi early next year as part of its effort to become the world's leading 777 service provider. (AFI) celebrated the 90th 777 to join its repair services on a flight-hour basis with Saudi Arabian Airlines (SVA)'s 23-strong 777 fleet.

Boeing delivered to Air France (AFA) the first 777-300ER incorporating enhancements that improve overall fuel efficiency by +1.4%. This equates to an annual fuel savings of approximately 200,000 gallons, according to the manufacturer. The improvements result from a modification to the (GE90-115B) by (GE), drag reduction via modification of the vortex generators and air induction systems for the environmental control systems, and weight savings that include lighter weight Environmental Control Systems (ECS) ducts and main deck floor panels. The enhancements will be retrofitted to the 27 existing 777-300ERs in the world fleet - - (AFA) operates 11 - - and incorporated into 777-200LRs.

+3 orders A318-100's. Air France (AFA) is delaying the delivery of its first Airbus A380 by a year from the original delivery date. The airline was to take its first A380 in April 2007 however Airbus (EDS) delayed that by 6 months. Air France has now asked the manufacturer for a further 6 month delay as it does not with to start A380 operation in the low season.

December 2005: Air France (AFA) and TAM (TPR) signed an agreement this week to develop jointly Sao Paulo and Rio de Janeiro as connecting hubs to Brazilian and Latin American destinations on TAM (TPR)'s network. The accord covers an increase in frequencies from seven to 10 per week from Paris (CDG) to Sao Paulo and daily flights to Rio de Janeiro, with onward connections to 10 Brazilian destinations via Sao Paulo and seven through Rio. TAM (TPR) will offer passengers departing from Brazil flights to eight French cities via (AFA)'s (CDG) hub.

January 2006: JAT Airways (JAT) will become a member of the SkyTeam (SKT) alliance with sponsorship from AirFrance (AFA), according to media reports in Serbia citing (JAT) Commercial Director, Milutin Popovic.

For the full year 2005, (AFA) - (KLM) = Passenger traffic 185.71 Billion (RPK) (+8.3%) (3rd highest in world); Freight traffic 10.61 Billion (FTK) (+2.3%); 69.16 Million passengers (+6.1%).

(LAN) finalized a 10-year component support agreement with AirFrance Industries (AFA) and (KLM) Engineering & Maintenance (E&M) covering its 24 767-300ERs. It is planning to add 10 more 767-300ERs through 2008. The contract is based on support per flight hour and is backed by the (AFA) and (KLM) (E&M) Americas component pool in Miami. Repairs will be performed by either (KLM) (E&M), AMG or (AFA).

Qantas (QAN) said it signed a nonbinding Memo of Understanding (MOU) with SR Technics (SWS) to establish a joint venture providing component management services for the A380. The new company will compete with Spairliners, formed last summer by Lufthansa Technik (DLH) (LTK) and AirFrance Industries (AFA). Qantas (QAN) said it is filling a similar need in the Asia/Pacific region.

(AFA) will inaugurate nonstop service from Paris (CDG) to Katowice (Poland) on March 26th. (AFA) will operate 3 flights on weekdays with a CRJ-200 as well as 1 Saturday and 2 Sunday flights. (AFA) will inaugurate nonstop service from Paris (CDG) to Yerevan (Armenia) on March 27th and will operate 3x-weekly with an A320 departing Paris on Monday/Wednesday/Saturdays and Yerevan on Tuesdays/Thursdays/Sundays.

February 2006: AirFrance (AFA) will launch three times weekly A320-200 service from Paris (CDG) to Yerevan on March 27.

The (AFA) - (KLM) Group said it will pursue a "profitable growth strategy" during the summer by boosting capacity +5.6% over summer 2005, comprising a +6% increase on its long-haul network, a +6.3% rise on its international medium-haul network and a +1.1% increase domestically.

Long-haul growth, including a +19.7% ramp-up in capacity to the Middle East, will come from additional frequencies and larger airplanes. (KLM) will offer a new destination, Chengdu, with 2x-weekly service from Amsterdam. The group will offer 47x- weekly flights to China. On its "oil, gas and mining routes" it will add a second daily flight to Houston plus new service to Tehran and possibly Riyadh. It also will increase capacity on routes to Asia and the Americas through cooperation with its SkyTeam partners.

On the European network, the group will add Yerevan (thrice-weekly aboard an (AFA) A320), Leipzig (2x-daily operated by Regional) and Katowice (thrice-daily operated by Brit Air) this summer. (AFA) will add second daily flights to Zagreb and Kiev and a daily flight from Paris (CDG) to Algiers, increase service to Athens and Tel Aviv and suspend its Nantes - London Gatwick service in addition to other operational changes. The group said there "will be very few changes" on its French network save select modifications.

AirFrance Industries (AFI) will provide full maintenance support for the (GE90) engines powering six of Vietnam Airlines (VIE)'s 777s, the first such contract for (AFI). The agreement covers spare engine support. (VIE) currently operates 10 777s, six with (GE90) powerplants. (AFI) also will deliver on-wing engine services and operation support for (VIE) in all of its line stations worldwide. Term of the initial contract is three years.

March 2006: AirFrance (AFA) Cargo will begin weekly service to the new cargo center at Dallas/Fort Worth International Airport (DFW) on April 1. Airport officials estimate the new flight will have an annual impact of $3.5 million. The 747F will stop at (DFW) en route from Mexico City. Service is being shifted from Houston, which had three weekly flights.

(AFA)-(KLM) said it posted a "further good performance both in terms of traffic and unit revenue" in February. Passenger traffic increased +8.5% over the year-ago month to 13.93 billion (RPK)s on a +6.9% rise in capacity to 17.93 billion (ASK)s. Load factor improved +1.1 points to 77.7% LF. The group carried nearly 5 million passengers, up +5.1%.

(AFA) unveiled its new €120 million/$143.7 million, 33,310 sq m Flight Crew Center at Paris Charles de Gaulle. Approximately 18,000 members of (AFA)'s flightdeck (FC) and cabin crew (CA) will be based at the facility. Construction began in December 2003.

EasyJet (EZY) said it was "forced" to cancel plans to operate daily Paris Orly - Ajaccio service from July, after being informed that French authorities "had granted a monopoly to (AFA)/(CCM) under a Public Service Obligation (PSO)," according to (EZY). Most (PSO) routes are operated by only one carrier, but (EZY) claims the route can support two airlines. "There is a huge demand for flights from Paris to Corsica, as we have seen over the past few weeks, and there is no justification for a monopoly. Not only are other airlines banned from this route, but also is tax-payers' money being handed over to (AFA)," (EZY) Director General - France, Francois Bacchetta commented, saying the ban also hurts Corsicans because tourists "have to pay ripoff prices." The Ajaccio flight was part of a French expansion that comprised five new routes and three new markets (Ajaccio, Bordeaux and La Rochelle). (EZY) is France's second-largest airline.

April 2006: AirFrance (AFA) and (KLM) launched a combined Internet check-in facility allowing passengers to check in for (AFA) flights on (KLM)'s website. Effective next month, (KLM) will accept all e-tickets issued by SkyTeam members.

(AFA) is to trial OnAir's (GSM) equipment enabling the use of mobile phones in flight. (AFA) will receive the first outfitted airplane, an A318, off the production line in early 2007 for the six-month trial. The OnAir service will allow passengers to use their own (GSM) mobile phones and (GPRS)-enabled devices such as the BlackBerry or Treo, to make and receive voice calls or send and receive (SMS) messages or e-mails without interfering with navigation systems. (AFA) will survey passengers before deciding whether to extend the program beyond the trial.

(AFA) will increase the frequency of flights from Paris (CDG) to Hong Kong from 7 to 10 flights a week on May 29th. In addition to the daily 777 flight, (AFA) will operate a 2nd flight departing Paris on Mondays, Wednesdays & Saturdays, and Hong Kong on Tuesdays, Thursdays, & Sundays using an A330-200 which will be upgraded to a 777-200 on October 30th.

(AFA) Industries (AFI), the Maintenance Repair & Overhaul (MRO) arm of (AFA), and Engine Alliance, the (GE) - (P&W) joint venture producing the (GP7000) for the A380, signed an Industrial Cooperation Agreement under which (AFI) will open an (MRO) center in Paris for the engine. The (AFI) facility "will work as a part of the Engine Alliance (MRO) network," according to a statement from (GE). (AFA), which chose the (GP7000) to power its A380s, will start with partial (GP7000) service capability next year, when the engine enters service and ramp up to overhaul capability as the fleet grows. Engine Alliance will provide (AFI) "with a technology package to fulfill its (MRO) role." (AFI) and Engine Alliance will offer customer and product support services, supply chain management, logistics for component repair and (LRU) support, the companies said.

May 2006: AirFrance (AFA) - (KLM) Group reported net income of +€913 million/+$1.17 billion for the financial year ended March 31, a +29.3% increase over the +€706 million earned in 2004 - 2005. Last year's results were restated to account for pension fund surpluses at (KLM). "The year 2005 - 2006 was marked by two features: Strong world economic growth, leading to extremely dynamic levels of activity in our sector, and a significant rise in oil prices. In this environment, we have confirmed the success of the (AFA) - (KLM) merger," Chairman & (CEO), Jean-Cyril Spinetta noted.

Full-year operating revenues rose +10.2% to €21.45 billion whereas costs were up +8.4% to €20.51 billion. Consequently, operating profits soared +69.3% to +€936 million from +€553 million in the prior year. Operating margin improved "significantly" from 2.8% to 4.4%. "The synergies generated by the merger, combined with our ongoing cost-control measures, have not only enabled us to attenuate the impact of the rise in fuel prices, but also to improve our margins significantly," Spinetta said. Fuel costs reached €3.59 billion, up +32% from the prior Fiscal Year (FY).

Passenger traffic grew +8.6% (RPK), on a capacity increase of +6.2%, leading to a +1.7 point lift in load factor to 80.6% LF. This was +5 points above the Association of European Airlines (AEA) average, "confirming (AFA) - (KLM)'s strengthening position in these markets," according to the company. Passenger revenues increased +0.2% to €16.94 billion with yield rising +1.5% to 8.40 euro cents.

Spinetta's outlook was cautious as he said, "The current year has begun with a further sharp rise in oil prices. Nevertheless, our aim is to generate operating income of at least the same level as last year." (AFA) - (KLM) expects to boost capacity by some +5% this year.

Net income for the fourth quarter was +€7 million, down -30.3% on the year-ago period. Activity levels remained "robust at all the group's businesses," lifting revenues +12.7% to €5.19 billion. Operating charges rose +12.1% to €5.2 billion, mainly owing to fuel costs. Operating result was "at breakeven" as the loss narrowed to -€4 million from -€30 million in the year-ago quarter.

(AFA) increased its fuel surcharge by +€7/+$8.90 per segment on long-haul flights effective April 28. Increases will be withdrawn when price per barrel falls below $60 for 30 consecutive days.

Worldspan signed a new multiyear full content agreement with (AFA) that will give Worldspan travel agencies complete access to the airline's content.

June 2006: Nine SkyTeam (STM) alliance member carriers signed a Memo of Understanding (MOU) with the British Airports Authority (BAA) confirming their co-location at London Heathrow (LHR)'s Terminal 4 in 2008, when the new T5 opens and the airport reorganizes. The (STM) alliance said nearly 3.5 million passengers travel through (LHR) each year aboard Aeroflot (ARO), AirFrance (AFA)-(KLM), Alitalia (ALI), (CSA) Czech Airlines, and Korean Air (KAL). (KLM) already operates out of T4. AeroMexico (AMX), Delta Air Lines (DAL), and Northwest Airlines (NWA) are parties to the agreement and will have the option to take a place in T4 should they serve (LHR) in the future.

The (STM) alliance will upgrade the terminal to include 32 check-in desks, additional luggage drop-off locations, lounges and space for self-serve kiosks.

AirFrance Industries (AFI) and Thales (THL) signed a Memo of Understanding (MOU) for maintenance, logistics, supply chain, repair and overhaul of the Top Series In Flight Entertainment (IFE) systems for AirFrance (AFA) A380s. The companies said they will "jointly explore innovative modes of cooperation to ensure cost-effective (IFE) maintenance and high level of (IFE) system reliability and availability." This cooperation will lead to a common support offer on a Paris (CDG) platform for other potential (THL) TopSeries (IFE) customers.

(AFA) this month will start deploying 777-300ERs on its routes from Paris Orly to the French Overseas Departments except French Guiana. Seven 777-300ERs in three-class configuration will gradually replace 747s, and by 2007, Fort-de-France, Pointe-a-Pitre and Saint Denis will have a dedicated fleet of 777s equipped with in-seat digital In-Flight Entertainment (IFE). In the high season, (AFA) operates up to 14 weekly flights between France and the French Caribbean and nine to Reunion. Some 1.4 million passengers travel on this network annually.

(AFA) will operate 3x-weekly flights between Paris Charles de Gaulle (CDG) and Chennai from October 30, departing Paris on Mondays, Thursdays, & Saturdays and Chennai on Tuesdays, Fridays, & Sundays using its own airplanes. It currently code shares on the route with Delta Air Lines (DAL). (AFA)'s flights will be aboard a two-class A340 and also will be sold by Delta (DAL). In addition, (AFA) will increase capacity to Bangalore from October 30, offering seven weekly flights from (CDG) instead of five. The Paris - Mumbai route will use 310-seat 777-300s instead of the 270-seat dash 777-200s operated last winter. In total, (AFA)'s capacity to India will grow by +27%.

(AFA) celebrated the fifth anniversary of "Saphir," its information and reservations service for disabled passengers. "The Saphir service is the only one of its kind and one of our biggest achievements," Chairman & (CEO), Jean-Cyril Spinetta said. "Our ambition in the medium term is to extend access to our international network for our passengers with reduced mobility." (AFA) has allocated 5,740 Saphir cards, and the 18-strong Saphir staff in Nice, handles an average of 300 calls per day and more than >50,000 each year. Not all reduced mobility passengers use the Saphir service. (AFA) carries more than >300,000 disabled passengers on its network each year.

July 2006: AirFrance (AFA) launched a trial with (RFID) tags to label and track passenger baggage on flights between Paris Charles de Gaulle and Amsterdam Schiphol. (KLM) joins the trial on July 10 at two baggage drop-off points in Schiphol's Departure Hall 2 (DH2). The tags will be used for all baggage dropped at those points regardless of destination. Later this year, all drop-off points in (DH2) will be equipped to handle (RFID) tags. (KLM) developed (RFID) together with Schiphol, which is responsible for facilitation.

"We are launching these (RFID) baggage tests in the hope that these labels will eventually replace the existing barcode technology. This will enable (AFA) - (KLM) to secure its leading position in terms of offering passengers innovative products," (AFA) VP Operations, Pascal de Izaguirre said. The technology will be tested on Paris - Tokyo flights this summer. The new (RFID) labels, which are uniform to (AFA) and (KLM), eventually will be introduced to outstations.
Airlines could save $768 million per year using passive (RFID) baggage tags, (IATA) (RFID) Project Manager, Andrew Price said.

(AFA) will increase the frequency on its Paris (CDG) to Bangalore route from 5x to 7x-weekly on October 28th and the new daily service will continue to be operated with an A330-200. (AFA) will increase capacity on its Paris (CDG) to Mumbai route by upgrading from a 777-200 to a 777-300 on December 1st.

August 2006: AirFrance (AFA) and (KLM) are hiking their fuel surcharges. (KLM) will increase its surcharge by +€5/+$6.40 per segment to €65 on all intercontinental flights and by +€1 per segment to €24 on all European flights on tickets issued as of August 10. (AFA) will impose further fuel surcharges of +€7 to each long-haul flight, +€1 on domestic flights and +€2 on medium-haul flights.

(KLM) said it no longer will operate flights to "loss-making" Amman and Damascus from October 29. From that date, (KLM) passengers will have to travel via Paris Charles de Gaulle (CDG) with (AFA). (KLM) announced it will not reinstate service to Beirut, even after the airport is fully operational, as "the route was already loss-making." Partner (AFA) intends to resume flights from (CDG).

(AFA) will place its code on Qantas (QAN)'s 5X-weekly Darwin - Cairns service.

(AFA) flights to the USA (except Detroit and Cincinnati) will be concentrated at (CDG)'s Terminal 2E. Flights that were handled at 2E, mainly to Africa, will be transferred elsewhere in T2. (AFA) operates 22 daily flights to 13 USA cities.

(AFA) will increase the frequency of its Paris (CDG) to Johannesburg (JNB) route from 10 to 12 flights a week on October 28th and the daily flight currently operated with a 747-400 will switch to a 777-300, while the 2nd flight operated 3 days a week will go to 5, departing (CDG) daily except Fridays & Sundays and departing (JNB) daily except Mondays & Saturdays operated with an A340-300.

Northwest Airlines (NWA) and (AFA), as SkyTeam (STM) alliance partners, who were rebuffed by the USA Department of Transportation (DOT) as part of the (STM) alliance's bid for transatlantic antitrust immunity (ati) last December, opted to move forward with a code share agreement.

(NWA) will place its code on (AFA)'s six weekly Paris Charles de Gaulle (CDG) - Detroit (DTW) flights and (AFA) will do likewise on (NWA)'s daily service. In the fall, the agreement will be expanded to include (AFA) connections into Europe, Africa and the Middle East and (NWA) flights from Detroit throughout the USA. Passengers will have access to each airline's loyalty programs and to the carriers' respective lounges at (CDG) and (DTW).

(NWA) was among the most vocal critics of the December (DOT) decision, calling it "arbitrary and capricious." The department did give tentative approval for blanket code sharing authority among (NWA), (AFA), Delta Air Lines (DAL), (KLM), Alitalia (ALI) and (CSA) Czech Airlines, which it said would give carriers the opportunity "to achieve most of the benefits they are seeking."

"This is the tangible result of our strategy of network development and alliances," (AFA) said of the deal.

Quali-audit, an (AFA) Consulting subsidiary, launched operation as an (IATA) Operational Safety Audit Organization. It will employ 18 auditors from major airlines.

Boeing (TBC) said it has firmed the design configuration for the 777F freighter, which was launched 15 months ago with an order from AirFrance (AFA) and will be the sixth version of the 777.

(TBC) said (AFA) "has been closely involved in the airplane's design and development." (AFA) will take delivery of the first of five 777Fs in the last quarter of 2008. According to Boeing (TBC), the 777F will have a range of 4,895 miles/9,065 km with a full payload. Maximum takeoff weight will be 766,000 lb/ 347,450 kg with a revenue payload capability of 229,000 lb/103.9 metric tons. It will be capable of accommodating 27 standard pallets on the main deck, 10 pallets in the lower cargo hold and 600 cu ft/(17 cu m of additional bulk cargo. "The 777F freighter is designed to complement 747 cargo operations with easy direct-transfer shipments," Dennis Todd, Engineering leader for the 777F program, said. "In addition, operators will benefit from the freighter's commonality with the passenger models of the 777 family."

The 777F is based largely on the 777-200LR passenger airplane and will be powered by (GE90-110B1)s. Emirates (EAD), Air Canada (ACN) and Avion Group (AID) have placed a combined 18 firm orders for the type.

September 2006: (AFA) will increase the frequency on its Paris (CDG) to Port Harcourt (Nigeria) route from 4 to 5 flights a week from October 29th and currently operates flights on Tuesdays, Wednesdays, Thursdays & Sundays will add a Monday flight, mostly with A330-200s.

(AFA) ordered Boeing Class 3 electronic flight bags (EFB) for its fleet of 777s, comprising 42 in-service airplanes and 13 to be delivered. It is the eighth carrier this year to order the Class 3 (EFB), Boeing said, adding the order was the "most significant" to date from a European airline. (AFA) partner (KLM) was the launch customer for the 777 (EFB) in 2002. (KLM) currently operates 13 (EFB)-equipped 777s and eventually will have 18.

October 2006: The Air France (AFA)-(KLM) merger could deliver up to -€1 billion/-$1.27 billion in savings to the airlines by 2009, double the initially anticipated cost benefit of -€500 million, Air France (AFA)/(KLM) Vice Chairman and (KLM) President & (CEO), Leo van Wijk told Dutch magazine "Zakenreis." Since the 2004 merger, the carriers have realized savings of -€660 million, he noted. He also revealed that he is considering relinquishing his titles at (KLM) when his contract expires in May 2007 in order to take a strategic role in the merged company. He said he expects to be replaced by Deputy CEO, Peter Hartman, who will retain a purely operational role as head of the Dutch entity. Final decisions will be taken later this year.

The top 20 managers of (AFA) and (KLM) will meet later this year in order to "reflect on what the 'grand plan' should be for next year and how we can take the next steps," Van Wijk said. He did not rule out further integration, "but there must be good reasons for that." Possible investment in China will be on the agenda, while he reiterated that the company would consider a stake in Alitalia (ALI)if the airline is privatized and profitable.

(AFA) Cargo will inaugurate service from Paris (CDG) to Bahrain on October 29th. The airline will operate 2 flights a week via Zaragoza (Spain) and continuing to Delhi and Hong Kong, using a 747F Freighter.

AirFrance (AFA) Industries announced that Virgin Atlantic Airways (VAA) chose it to provide total flight hour component support including access to a spares pool for eight A340s until 2016.

November 2006: Air France (AFA)/(KLM) Group improved its fiscal first-half profit to +€618 million/+$809 million, up +50.7% from +€410 million in the year-ago semester, results Chairman, Jean-Cyril Spinetta attributed to the "unique competitive position" of the merged airline company.

Meanwhile, both (AFA)/(KLM) and Alitalia (ALI) acknowledged a possible merger, but insisted talks are still at a preliminary stage despite months of speculation. "Exploratory exchanges are underway," Alitalia (ALI) said in a statement. Spinetta said during a press conference last week that (AFA)/(KLM) is still in the process of assessing the troubled Italian carrier's finances and "whether the integration of Air France (AFA)/(KLM) and Alitalia (ALI) could generate synergies." If (AFA)/(KLM) finds "positive" answers to its questions regarding Alitalia (ALI), and the potential benefits of a merger, "it then may be possible to start discussions," he said.

(AFA)/(KLM) appears to hold a strong hand going into any talks as revenues for the fiscal first half ended September 30 grew +10.3% to €11.93 billion and operating profit soared +30.5% to +€979 million from +€750 million last year.

Net income for the three months ended September 30 was +€374 million, up +25.5% from +€298 million in the year-ago quarter, excluding a €419 million net capital gain in the year-ago period, generated by the sale of a stake in Amadeus. Revenues grew +8.8% to €6.13 billion, while operating expenses rose +8.9% to €5.56 billion, producing a three-month operating profit of +€568 million, up +7.8% over +€527 million in the year-ago quarter. Fuel costs in the quarter jumped +29% to €1.17 billion.

Fiscal second-quarter passenger yield lifted +4% to 8.63 euro cents as passenger (RASK) increased +4% to 7.26 euro cents and passenger (CASK) rose +3.1% to 6.40 euro cents. Cargo revenues for the three months improved +3.7% to €724 million.

"On the basis of robust traffic levels and forward bookings for the coming months, Air France (AFA)/(KLM) maintains its objective for the full year to generate a significant increase in operating income compared to 2005 - 2006 [operating income of +€936 million]," the company said.

Air France (AFA)/(KLM) said non-French shareholders increased their stake in the carrier to 47% over the past few weeks and stated that it will use an "authorized mechanism" to protect its traffic rights and "to safeguard national ownership once the nonresident shareholding has reached 45%." In its most recent "Connecting" letter to shareholders, (AFA)/(KLM) noted that it regularly conducts a process to identify its shareholders "in order to retain its traffic rights as well as its European Community (EC) air transport operating licenses." At June 30, French investors held more than 63.2% of the group while 36.3% of shareholders were not resident in France. French shareholders comprised employees (13.8%), institutional shareholders (19.1%), the state (18.6%), and individual shareholders (10.7%).

Air France (AFA) Industries and (KLM) Engineering & Maintenance (E&M) are looking into uniting under one brand, (KLM) (E&M) VP Marketing, Sales & Customer Services, Rob Pruim said at the Maintenance Repair & Overhaul (MRO) Europe in Amsterdam. "We haven't taken any decision," he stressed, "but we have appointed consultants to see what the possibilities are. It's a delicate and difficult decision, because both Air France (AFA) Industries (AFI) and (KLM) Engineering & Maintenance are strong and recognized brands in the (MRO) market."

Meanwhile, both companies have started "full integration" of sales and customer support departments. "It's the next step in positioning ourselves as an (MRO) global leader," (AFI) VP Marketing & Sales, Christian Tallec noted. "Customers will have direct access to the combined portfolio of (AFI) or (KLM) (E&M) through a single point of contact, regardless of which entity carries out the maintenance."

SkyTeam carriers Aeromexico (AMX), Air France (AFA), Alitalia (ALI), and (KLM) have co-located their operations at Sao Paulo Guarulhos (GRU) Terminal 1, which the alliance said is the first co-location in its network where the participating airlines operate equally. A common-use ticket office and joint purchasing of ground handling services, also have been implemented. The alliance operates 75 weekly flights to and from (GRU).

Air France (AFA)/(KLM) Group expects to decide this month, whether it will launch a new carrier focusing on the medium-haul leisure market.

The startup would be modeled on its Amsterdam-based transavia.com (TAV) subsidiary, which offers a mixture of charter and scheduled low-fare flights, and would be based at Paris Orly (ORY) South. It would operate a fleet of 186-seat 737-800s to a selection of popular tourist destinations such as Morocco, Tunisia and Spain.

"This initiative will meet with the demand for scheduled flights to leisure destinations not presently served by Air France (AFA)," the carrier said in a statement, noting that the initiative "would fit in very well with the growth strategy of transavia.com (TAV), which has for some time been planning to operate from additional bases outside the Netherlands." In addition to Air France (AFA) Soleil flights, as the project has been dubbed, transavia.com (TAV) would commence charter operations from (ORY). Transavia.com (TAV) denied press speculation that part of its fleet would be transferred to the new company.

The new airline would be a jointly owned subsidiary of Air France (AFA) (60%) and transavia.com (TAV) (40%). It would be registered in France and personnel would have a working contract under French labor law. Flights would be sold via tour operators and directly on a seat-only basis to customers in France and the destinations served. Direct sales would be undertaken via the transavia.com (TAV) website and its call center. Commencement of operations is planned for spring 2007.

The creation of a hybrid low-fare/charter airline by (AFA) is rather surprising considering management's longstanding resistance to the idea of an in-house Low Cost Carrier (LCC) to compete with Ryanair (RYR) and easyJet (EZY). (AFA) quit the charter segment in 1997, when it closed Air Charter.

Transavia, (TAV) launched in 1965 and which and has reported a profit for 28 consecutive years, has experimented with several models. In 2005 it merged its basiqair.com brand for low-fare flights and Transavia (TAV) for charter flights into transavia.com (TAV). It is a wholly owned subsidiary of (KLM) and operates 31 737NGs. In 2005 - 2006 it posted a net operating result of +€32 million/+$41 million on revenues of €468 million.

Later, Transavia.com (TAV)'s French equivalent will commence operations next summer with four leased 737-800s, following approval by the boards of Air France (AFA) and Transavia.com (TAV). Initial startup capital will be €22 million/$28.8 million, split 60/40 between Air France (AFA) and the Dutch Transavia.com (TAV). Lionel Guerin, currently Chairman & (CEO) of French regional airline, Airlinair, has been appointed Chairman of the management board. Management expects to achieve revenues of €250 - €300 million in the third year of operations and post a profit from the second year. Next summer, some 10 Mediterranean destinations (mainly Morocco, Tunisia, Spain, Italy and Egypt) will be served by 67 weekly flights out of Paris Orly. From winter 2007 - 2008, the number of destinations may increase to 15, while the fleet should grow to seven 186-seat 737-800s in the second year, and nine in the third.

The commercial brand will be Transavia.com "in order to take advantage of the existing brand, which already has a reputation for being a reliable, punctual and safe airline," according to a statement by the two shareholders, who added that "production costs and productivity must be consistent with the applicable fares and will benefit from the very substantial synergies achieved with Transavia.com (TAV) in the Netherlands." Management of the new carrier, which will be based at Orly, will be separate from (AFA). The airline should create some +400 new jobs by 2009, comprising 80 ground staff (MT) positions, 100 flightdeck crew (FC), and approximately 220 cabin crew (CA).

A318-111 (2951, F-GUGO), delivery, and A319-112 (2938, F-GRXL), (ILF) leased.

December 2006: Air France (AFA)/(KLM) flew 15.54 billion (RPK)s passenger traffic in November, a +4.1% increase over the year-ago month. Capacity rose +4.2% to 19.8 billion (ASK)s and load factor dropped -0.1 point to 78.5% LF.

Boeing (TBC) said that Air France (AFA) Industries has adopted the Boeing Airplane Health Management system, which will provide real-time maintenance information on (AFA)'s 42 777s (plus 13 to be delivered) and 21 747-400s.

Air France (AFA) Industries will perform engineering, airframe maintenance, component and engine support on a power-by-the-hour basis on Nok Air (NKA)'s 737-400s.

The Italian government confirmed its intention to reduce its controlling interest in Alitalia (ALI) in an effort to lift the carrier out of the red and into an alliance.

Since the initial part-privatization in December 2005, the Italian state holds 49.9%. It now wants to reduce this by 25% to 30%. "The strategic recovery of Alitalia (ALI) cannot be done without the entry in the company's capital of new industrial and financial partners," the office of Prime Minister, Romano Prodi said in a statement following a cabinet meeting. The government has yet to appoint advisers on the sale, but aims to complete it by January.

Alitalia (ALI) (CEO), Giancarlo Cimoli told a parliamentary committee last week that the airline's future depends on a partnership. "The only strategic direction for Alitalia (ALI) is to integrate itself in a big international group," he said. Talk has centered on Air France (AFA)/(KLM), which holds a 2% stake, but several government officials have voiced disapproval of such a link-up and expressed their preference for a merger with another group or carrier, mentioning Air China (BEJ), Lufthansa (DLH), Thai Airways (TII), and Emirates (EAD). (ALI) dismissed reports some weeks ago, that it was in talks with Thai (TII).

(AFA)/(KLM) (CEO), Jean-Cyril Spinetta said last month that "exploratory" talks were underway, but reiterated that Alitalia (ALI) must improve its finances before (AFA) would consider increasing its current stake. The Italian carrier wanted to be part of the initial Air France (AFA)/(KLM) merger in 2004, but was excluded because of its poor financial health and government ownership.

A318-111 (2967, F-GUGP), & A319-112 (2961, F-GRXM), deliveries.

January 2007: 2006 (AFA)/(KLM) had 197.48 billion (RPK)s passenger traffic (+6.3%) (world 2nd highest); 11.01 billion (FTK)s; & 72.73 million passengers (+5.2%).

ACCDT: An F 100 operated by Regional, Air France (AFA)'s wholly owned subsidiary, overshot the runway while taking off at Pau Pyrenees Airport en route to Paris Charles de Gaulle on January 25th morning. All 50 passengers and four crewmembers evacuated uninjured, but the airplane hit a vehicle on a nearby road, killing one person and injuring another, (AFA) confirmed. The French (DGAC) regulatory authority said that based on initial reports, the pilot (FC) was forced to execute an emergency landing after one of the airplane's engines ingested several birds.

747-406FER (35233, F-GIUF), EX-(KLM), Guggenheim (GUG) leased. 777-328ER (32962, F-GSQS), & A318-111 (2972, F-GUGQ), deliveries. A318-111 (2972, F-GUGQ), delivery, & A320-214 (3008, F-GKXN), (GECAS) (GEF) leased.

February 2007: Air France (AFA) Industries signed Air Mauritius (MAU) to a five-year agreement for full component support of seven A340s and two A319s, together with a maintenance base kit to be installed at the airline's Plaisance hub.

Starting June 11th, Paris (CDG) - Seattle, using A330-200s.

777-328ER (32846, F-GSQT), delivery.

March 2007: A321-211 (3051, F-GTAN), (ILF) leased.

April 2007: 777-328ER (32847, F-GSQU), delivery and A319-115LR (3065, F-GRXN) & A321-211 (3098, F-GTAO), (ILF) leased.

May 2007: Air France (AFA)/(KLM)'s -2.4% decline in consolidated net earnings to +€891 million/+$1.2 billion in the fiscal year ended March 31, which compares to a +€913 million prior-year profit boosted by the sale of its Amadeus stake, will not slow the airline, which yesterday announced an airplane commitment worth approximately $7 billion. The orders, to be signed at the Paris Air Show, comprise the firming of two A380 options, which Chairman & (CEO), Jean-Cyril Spinetta were "part of an agreement with Airbus (EDS) relating to compensation for [A380] delivery delays," plus 30 A320 family airplanes and 18 777-300s.

Full-year traffic rose +5.4% against a +4.4% increase in capacity, lifting load factor +0.6 point to 81.4% LF. The company carried 73.5 million passengers, up +5%, and generated passenger revenue of €18.37 billion, up +8.4%. Operating income soared +55.5% to €1.07 billion. Yield increased +3.4% to €0.087, (RASK) rose +4.4% to €0.071 and unit cost grew just +2.6% to €0.066.

Air France (AFA) launched a fifth weekly Paris Charles de Gaulle - New York (JFK) flight aboard an A330. Service will become daily on June 4.

China Southern Airlines (GUN) and Air France (AFA)/(KLM) have entered into exclusive talks to launch a joint venture (JV) cargo carrier in China, (AFA)/(KLM) Vice Chairman & (KLM) President & (CEO), Leo van Wijk revealed recently in Beijing. China Southern (GUN) previously said it expects to launch a cargo (JV) by the end of 2007. The carriers currently are negotiating ownership share and where to base the (JV). Earlier this year, China Southern (GUN) Vice Managing Director, Xu Jiebo said a foreign airline would hold a 49% stake in a cargo (JV), the maximum allowable foreign investment under (CAAC) (CAC) regulations.

777-328ER (32854, F-GSQV), delivery.

June 2007: Air France (AFA) launched daily Paris (CDG) - Seattle flights aboard an A330-200. The airline said it operated its last 737 flight aboard a 737-500 on its Paris (CDG) - Turin route.

Air France (AFA)/(KLM) Group's Maintenance Repair & Overhaul (MRO) division inked two new contracts. Air France (AFA) Industries (AFI) signed an agreement with IndiGo (IGO) for support of its fleet of A320s covering door-to-door logistics support, pool access, repair management and dedicated on-site management in support of the airline's operations throughout India.

At this month's Paris Air Show, Air France (AFA) signed a Memo of Understanding (MOU) for the purchase of two more A320s and 18 Airbus narrow bodies.

Later, Air France (AFA)/(KLM) Group ordered nine 777-300ERs and seven 737-700s in a deal valued at $2.7 billion, marking the first time the combined airline has announced an airplane acquisition at the group level. (KLM) will operate the 737-700s, while the 777-300ERs will be added to (AFA)'s existing fleet of 46 777s. (AFA) took options on another seven 777-300ERs, while (KLM) took the same number of options on 737-700s. The 777-300ER order takes the total number of 777s sold to more than >960.

July 2007: Air France (AFA) and Aeroports de Paris have begun the progressive opening of (AFA)'s new boarding facility at Charles de Gaulle airport (CDG), which is scheduled to be fully operational by year end, with annual capacity of 8.5 million passengers. Planned for next year, is the April reopening of (CDG)'s Terminal 2E and the fall inauguration of a regional terminal. A second boarding facility is slated to be built by 2012.

(AFA) unveiled its new Tokyo Narita lounge, which is 400 sq m and has seating capacity for 140 passengers. It is the first of the airline's "new lounge concept" premium waiting areas, with the second slated to open in Johannesburg this fall.

777-328ER (35678, F-GSQY), delivery.

August 2007: 2006 Results: (AFA)/(KLM) is world #2 airline by passenger operations ranked by traffic: 199.51 billion (RPK) (+5.4%); 245.07 billion (ASK) capacity (+4.4%); 81.4% LF (+0.8); 73.5 million passengers (+5.0%); 103,050 employees (+0.6%); 10.99 billion (RTK) (+1.4%) cargo traffic; 363 airplanes (see link to world airline (RPK) comparison chart).

Air France (AFA)/(KLM) Group subsidiaries Regional and (KLM) Cityhopper (AUK) placed a joint order for 20 E170/E190 airplanes plus 18 options. The group said the combined order "will lead to substantial synergies both in the purchasing of airplanes, engines and spare parts and in fleet management, operational maintenance and crew training." Regional will take six E170s and four E190s and Cityhopper will take 10 E190s and replace its oldest F 100s. Deliveries are scheduled between 2008 and 2011. Regional flies to 46 destinations with a fleet of 28 ERJ-145s, nine ERJ-135s, seven ERJ-120s, three E190s, nine F 100s and five F 70s. Cityhopper operates 55 airplanes.

September 2007: Air France (AFA) will pilot a program by year end that will use biometric information encrypted on a small card, to enable a passenger to obtain a boarding pass from a kiosk in the terminal, and will provide access to a boarding portal. The so-called "smartboarding personal card" is one of a number of new technologies (AFA) is developing to improve the entire passenger processing system. "All people are aiming for more autonomy," Deputy VP Marketing, Michel Teychene said. "If Air France (AFA) can provide this autonomy, it creates a loyalty to the brand." The voluntary program will capture the forefinger and thumb prints of a passenger who registers at a check-in desk. When the biometric card is inserted into a kiosk, the passenger's travel information and a boarding card will be printed. A portal at the gate will open automatically, when the card is inserted, and a positive match ensured, based on the person's biometrics. The back of the card can be re-encoded up to 500 times. The fingerprint essentially replaces a photograph, Teychene said.

Initially, the card will be used for frequent fliers between Paris Charles de Gaulle and Amsterdam. "If only 10% of the people like it, then we have a problem," Teychene said, but he is confident it will find wide acceptance. The application could be extended to rental car companies and hotels, he said. (AFA) is working to develop a relationship with Hertz, that would allow a customer to use a biometric card issued by (AFA) to check in and obtain a rental car key.

Air France (AFA)/(KLM) Group intends to make Paris Charles de Gaulle (CDG) the premier hub in Europe, in order to give the company a competitive edge in customer service. "There will be a rebirth [of] (AFA) through this hub," (AFA)/(KLM) Chairman & (CEO), Jean-Cyril Spinetta said. "We want (CDG) to become a world leader in transportation." Spinetta outlined plans, including the role of the S3 Terminal that opened in June, that include a complete reengineering of passenger processing through new technology that will make (CDG) a "digital airport." A new baggage handling system is being added that will incorporate (RFID), online and kiosk check-in systems will be expanded, and a pilot program will be implemented by year end, testing the use of biometrics to issue boarding passes.

In November, (AFA) will start phasing in a new In-Flight Entertainment (IFE) system, featuring 85 films in nine languages on long-haul flights. It also plans to begin a pilot program to permit the use of mobile phones during flights.

Spinetta said (AFA) will continue its "Dedicate" service, which offers dedicated business class (C) flights from Paris to a number of oil-producing regions with specially configured A319s, but there currently are no plans to follow in the footsteps of MaxJet (MXJ) or Eos (EOS), which provide all-business-class (C) service between Europe and the USA.

October 2007: Air France (AFA)/(KLM) Group estimated the net impact on operating income associated with the recently concluded five-day strike by (AFA) cabin crew (CA) at some -€60 million/-$86.5 million. The figure reflects a -€80 million loss in revenue, offset by a -€20 million reduction in costs, linked mainly to fuel. The estimate will be refined at a later stage, the carrier said in a statement. (AFA) cabin staff (CA) were on strike October 25 to 29 over pay and working conditions. (AFA)'s flight schedule has returned to normal. Management and cabin crew (CA) unions agreed to a series of 20 meetings to negotiate salaries and working conditions between now and Christmas.

SkyTeam (STM) partners Air France (AFA)/(KLM) and Delta Air Lines (DAL) announced a wide-ranging agreement on the joint operation of transatlantic flights, including a number of flights from London Heathrow (LHR) to USA destinations, as the carriers seek to challenge British Airways (BAB) directly, when the (EU)-USA "open skies" accord takes effect at the end of March

Unisys said the Air France (AFA) cargo network went live via the Unisys-operated Cargo Portal Services, an electronic booking and management service.

November 2007: Air France (AFA) Industries (AFI) was contracted by Nouvelair (NOU) to provide (CFM56-5A/5B) engine support for its fleet of A320/A321 airplanes. The contract gives access to (AFI)'s engine and component pools.

Air France (AFA) Industries (AFI) signed a multiyear contract with Air Mauritius (MAU) for overhaul of 31 (CFM56-5C) engines and component maintenance of two new A330-200s to be delivered this month and at the end of 2009. The contract includes access to (AFI)'s component pool, with creation of a main based kit situated at Sir Seewoosagur Ramgoolam International.

Seven cargo airlines working in conjunction with (IATA) (ITA) and freight forwarders, initiated e-freight pilot programs on a number of selected trade routes. The airlines are Air Canada (ACN), British Airways (BAB), Cathay Pacific (CAT), (KLM), Martinair (MTH), (SAS), and Singapore Airlines (SQC). Cargo on key trade routes connecting the countries represented by the carriers, will be processed electronically. "The paper-free era for airfreight begins," (IATA) Director General & (CEO), Giovanni Bisignani said. "This first wave of pilots will pave the way for a global rollout of e-freight that will eliminate the paper that costs this industry $1.2 billion every year. Combined, these documents could fill 39 747F cargo freighters each year, making e-freight a win for the business and for the environment." Participating freight forwarders in the e-freight pilot program are (DHL) Global Forwarding, Panalpina, Kuehne+Nagel, Schenker, (TMI) Group-Roadair, and Jetspeed. (AFA)/(KLM) said that based on its "experiences at [Amsterdam] Schiphol, we hope to introduce e-freight shipments on the [Paris] Charles de Gaulle network at a later stage" and that it is targeting 50% e-freight penetration on "important trade lanes" within five years.

December 2007: The Board of Directors of Alitalia (ali) has decided to choose Air France (AFA)/(KLM) as its preferred bidder and considered its offer the best guarantee for (ALI)'s future. The decision came after a board meeting, which lasted almost seven hours and saw (AFA)/(KLM) win out over a rival offer presented by the AP Holding, the parent company of Italy's biggest private carrier Air One (ADH). (AFA)/(KLM) said it is a top priority to renew Alitalia (ALI)'s fleet, and that the combination of the three European brands "will be able to offer clients an unparalleled international network." (AFA/(KLM)'s plan calls for returning Alitalia (ALI) to profitability by 2010, and includes total investments of 6.5 billion euros through 2015.

(AFA)/(KLM) will launch daily London Heathrow - Los Angeles service on March 30 aboard a 777. The same day, (AFA)/(KLM) will begin code sharing with Delta Air Lines (DAL) on 12 (DAL) flights between the USA and the UK/Ireland. Alaska Airlines (ASA) entered into a code share agreement with Air France (AFA), effective January 5, under which (AFA) will sell tickets on Alaska flights serving 18 destinations in the USA Pacific Northwest and Alaska, providing feed for (AFA)'s Seattle - Paris Charles de Gaulle (CDG) service. Alaska (ASA) passengers also will be able to fly aboard (AFA) beyond (CDG) to points throughout Europe, India, Africa, and the Middle East. Ticket sales for codeshare flights started December 15.

(AFA) announced that passengers onboard an A318 operating in Europe, now can send and receive (SMS) and (MMS) messages and e-mails via mobile phones with Internet access using the Mobile OnAir system. The capability is similar to the one JetBlue Airways (JBL) launched recently on an A320. The first flight occurred between Paris Charles de Gaulle and Warsaw. (AFA) said that during the second half of the six-month trial, passengers will be permitted to make phone calls, with the service regulated "to maintain . . . comfort and well-being." OnAir has roaming agreements with Orange, Bouygues Telecom and (SFR), (AFA) said.

January 2008: 2007 statistics: 205.82 billion (RPK)s passenger traffic +4.2%; +3.9% capacity (ASK)s; +.3 load factor for 81.4% LF. SEE ATTACHED COMPARISON CHART TO SELECTED OPERATORS - "AFA-2007-STATS."

The Franco-Dutch group's interest in consolidation does not end with (ALI). On Christmas Eve, it announced an agreement to acquire VLM Airlines. Financial details of the transaction were not disclosed. VLM, which won Air Transport World (ATW)'s "Regional Airline of the Year" award two years ago, operates a fleet of 18 F 50s and one B Ae 146 and is the largest carrier at London City Airport (LCY). "The strengths of the Air France (AFA)/(KLM) Group will provide the necessary support to take the development of VLM Airlines to the next level," (VLM), Managing Director, Johan Vanneste said.

Delta Airlines (DAL) will place its code on Air France (AFA)'s daily, London Heathrow - Los Angeles (LAX) service, scheduled to commence March 30 with a 777.

March 2008: The Air France (AFA)/(KLM) board met and authorized the company to submit an offer for Alitalia (ALI) subject to certain pre-conditions, "including notably the commitment of the trade unions." Later, The Alitalia (ALI) board unanimously agreed to accept an offer by (AFA)/(KLM) to acquire control of the ailing Italian carrier - - subject, however, to a number of what the parties call "effectiveness conditions" that must be fulfilled by March 31.

(AFA)/(KLM)'s industrial plan for the restructuring and relaunch of (ALI) calls for a single hub at Rome Fiumicino and a drastic cutback of medium- and long-haul flights from (MXP). It also plans to develop (ALI) low-cost subsidiary, Volare Airlines (VLR) similarly to Transavia (TAV).

Air France (AFA)/(KLM) confirmed that its restructuring of Alitalia (ALI) will include approximately -1,600 job cuts, fleet downsizing, and the transfer of some 2,800 (ALI) Servizi employees to (ALI) Fly with the remaining (ALI) Servizi staff retained for up to two consecutive periods of four years.

Later, Air France (AFA)/(KLM) stated it will retain 4,191 out of approximately 7,400 (ALI) AZ Servizi workers under a new plan submitted to unions, rather than the 3,300 it originally anticipated, according to a document accessed by "Reuters." It eventually plans to cut an additional -500 positions, the news agency reported, and still plans to cut approximately -1,600 employees from (ALI)'s flying operation and close the cargo subsidiary in 2010.

April 2008: Air France (AFA)-(KLM) formally withdrew its offer to acquire (ALI), saying, "The conditions precedent that had to be satisfied prior to launching were not fulfilled."

OnAir and Air France (AFA) launched a trial of in-flight voice calls featuring mobile communications including voice, Short Message Service (SMS) and e-mail. The system employs Inmarsat's SwiftBroadband satellite connectivity for voice and data transmission.

May 2008: Air France (AFA)/(KLM) Group reported a consolidated net profit of +€748 million/+$1.17 billion for the fiscal year ended March 31, a -16% decline from the +€891 million earned in the prior year, as it booked a €530 million provision to cover possible penalties arising from the ongoing antitrust probe into airline cargo activities. Operating profit increased +13.3% to +€1.41 billion from +€1.24 billion in 2006 through 2007. While highlighting "the excellent quality of our results, which met all our objectives," Chairman & (CEO), Jean-Cyril Spinetta noted that Fiscal Year (FY) 2008 witnessed a deterioration in the economic environment during the second half linked to the crisis in the financial sector and the sharp rise in oil price.

Deputy (CEO), Pierre-Henri Gourgeon said the group's passenger business had another "excellent year" with revenue rising +4.3% to €19.16 billion on a +3.9% increase in traffic (RPK)s. Capacity was up +4.6% and load factor slipped -0.6 point to 80.8% LF. (AFA)-(KLM) carried 74.8 million passengers, up +0.7%. Yield increased +1% to 8.78 euro cents and (RASK) inched up +0.3% to 7.09 euro cents. Unit cost declined -0.7% to 6.52 euro cents, despite higher fuel costs.

The USA Departmeny of Transportation (DOT) announced a grant of transatlantic antitrust immunity to SkyTeam (STM) partners Delta Air Lines (DAL), Northwest Airlines (NWA), Air France (AFA), (CSA) Czech Airlines, Alitalia (ALI), and (KLM), upholding a tentative approval issued last month. The six now will be able to "coordinate their transatlantic fares, services and capacity as if they were a single carrier in these markets, subject to certain conditions," the (DOT) said.

Boeing (TBC) unveiled its first 777F freighter at its Everett facility just north of Seattle. The airplane, which has attracted 78 firm orders from 11 customers, is capable of carrying 113 metric tons over 4,885 nautical miles. The manufacturer plans to complete eight 777Fs this year, with two involved in flight tests. That pair is destined for launch customer Air France (AFA).

Air France (AFA) took delivery of its 50th 777, a 777-328ER (723-35542, F-GZNC "Gille Dehove"). (AFA) now operates 25 777-300ERs and 25 777-200ERs.

June 2008: China Southern Airlines (GUN) signed a framework agreement with Air France (AFA)/(KLM) to launch a cargo joint venture (JV), (GUN) President, Liu Shaoyong said. "The new cargo (JV) will be named "AE Cargo" and is expected to go into formal operation next year and operate 10 airplanes, including 747s and 777s, at the initial stage," Liu revealed. "AE" stands for "Asia Europe." He said (GUN) will hold a 75% stake in the new entity, while (AFA)/(KLM) will hold the rest but refused to reveal the exact amount of (GUN)'s investment.

Although Chinese carriers have just 24% of the domestic cargo market compared to foreign competitors, Liu is confident that "AE" will be better positioned as "the operating efficiency can be enhanced greatly through (GUN)'s cooperation with (AFA)/(KLM)." He said (GUN) will ask (AFA)/(KLM) to nominate a (CEO) candidate.

Liu said that he expects (GUN) to post a profit this year despite the current industry environment. "We have done pretty well in cost savings and we successfully saved about -CNY1 billion in our operating expenses last year. This year we plan to phase out 12 MD-82s to improve the fuel efficiency and realize further cost controls," he explained.

While stressing it supports "the principle" of the inclusion of aviation in the (EU) emissions trading scheme (EU ETS), AirFrance (AFA) lambasted proposals by a European Parliament (EP) committee as unfair, discriminatory and potentially damaging to the financial health of European carriers. "We do not want to be taken for idiots," President & (COO), Pierre-Henri Gourgeon said during an environmental workshop at the carrier's Paris Charles de Gaulle headquarters. "We did support the [inclusion of aviation in an] (EU ETS) from onset, to the surprise of and in contrast with some of our counterparts, because we believe it is a better solution than taxation and because it is a scheme that respects market rules, it is a neutral system and it motivates [airlines] to reduce emissions." But he added that the debate has gotten out of hand, pointing to the recent proposal to include all flights within, leaving or landing in (EU) territory in the (EU ETS) from 2011 and to lower the CO2 emissions cap to 90% of 2004 to 2006 levels. "It seems to be a simple logic here in Europe that we have to set the [environmental] example for the entire world," Gourgeon complained. "In order for the (EU ETS) to remain virtuous, it must apply in the same way to all airlines in the world. A carrier whose hub is located outside the European Union (EU), yet flies passengers from one side of the planet to the other while circumnavigating Europe, would have an unfair advantage over airlines with a hub in Europe. Some traffic flows would be diverted from European to non-European hubs and the efforts asked of European airlines in the fight against climate change would be wiped out."

Whereas a fair and balanced (EU ETS) for only intra-European air transport might work, according to Gourgeon, he questioned "seemingly direct contradictions between this concern to limit air transport-related CO2 emissions and the attempts of local authorities to attract (LCC)s at any cost. There is a lack of consistency in those two attitudes."

Air France (AFA)/(KLM), Cathay Pacific Airways (CAT), Martinair (MTH) and the (SAS) Group all reached agreement with the USA Department of Justice (DOJ) to plead guilty in USA court and pay criminal fines "for participating in a multiyear conspiracy to fix prices for air cargo rates," the (DOJ) said. (AFA)/(KLM) will pay a $350 million fine, Cathay (CAT) has agreed to pay $60 million, Martinair (MTH) $42 million, and (SAS) $52 million, bringing the total imposed by the (DOJ ) during its investigation into air cargo antitrust violations to $1.27 billion. The figure marks the highest amount ever imposed by the antitrust division in one investigation. British Airways (BAB), Korean Air (KAL), Japan Airlines (JAL), and Qantas (QAN) already have pled guilty and paid fines. In addition, a former Qantas (QAN) executive will serve eight months in a USA jail as a result of the investigation.

The (DOJ) said that "the airlines each engaged in a conspiracy to suppress and eliminate competition, by fixing the cargo rates charged to customers for international air shipments. The charged conduct affected billions of dollars of consumer and other goods . . . shipped by these airlines and their competitors."

July 2008: Eight years to the month after the crash of an AirFrance (AFA) Concorde began the countdown to the end of the age of supersonic air travel, a French judge ruled that five individuals as well as Continental Airlines (CAL) should stand trial for manslaughter in the disaster. All 109 people onboard AF4590 and four persons on the ground were killed in the July 25, 2000, accident at Paris Charles de Gaulle. The crash occurred after debris from a burst tire punctured the Concorde's wing tank, causing fuel to escape and ignite as the airplane was taking off. It briefly became airborne before crashing into a hotel. It later was determined that the tire burst after the airplane ran over a strip of titanium believed to have fallen off a (CAL) DC-10 that took off ahead of Concorde. According to "Agence France Presse," those going to trial are Henri Perrier, 79, Director of the first Concorde Program at Aerospatiale in 1978 through 1994; Jacques Herubel, 73, Concorde's Chief Engineer in 1993 to 1995; and Claude Frantzen, 71, Technical Services Director at the French DGAC in 1970 through 1994. Also named were John Taylor, a (CAL) mechanic (MT) who allegedly installed the suspect titanium strip, and Maintenance Chief, Stanley Ford.

In a statement, (CAL) said, "These indictments are outrageous and completely unjustified. Continental (CAL) remains firmly convinced that neither it nor its employees were the cause of the Concorde tragedy and we will defend ourselves vigorously against these charges." Citing the pending litigation, (CAL) declined to confirm the identity or employment status of Taylor or Ford.

Following the accident, UK and French aviation authorities grounded the Concorde fleet until modifications could be made to reduce its vulnerability to such events, which had been a chronic problem, including a "potentially catastrophic" double tire burst in 1979, according to the USA National Transportation Safety Board. The airplane reentered service with British Airways (BAB) and Air France (AFA) in 2001, but "9/11" and the bursting of the "dot.com" bubble spelled doom and they were retired in 2003. In announcing the 2001 grounding, (UKCAA) Chairman, Malcolm Fields stated, "It is clear to all of us in the (UKCAA) that a tire burst alone should never cause the loss of a public transport airplane."

August 2008: 1st 6 months = 102.53 billion (RPK)s traffic - - see "AFA-08TOPWLD6MTHSRPK."

September 2008: AirFrance (AFA)/(KLM) and (AFA) Chairman & (CEO), Jean-Cyril Spinetta will relinquish the latter title at both the parent company and airline on January 1, when Deputy (CEO), Pierre-Henri Gourgeon will take over. "I felt it necessary to propose an internal solution that would guarantee continuity of governance in view of the difficult economic climate facing us," Spinetta said.

(AFA) introduced mobile phone boarding passes on its 15x-daily, Paris Charles de Gaulle - Amsterdam service.

(AFA) and Aeroports de Paris (ADP) inaugurated Terminal 2G (T2G) at Paris Charles de Gaulle (CDG), (AFA)'s first dedicated terminal at its main hub. (T2G) is (CDG)'s first "regional" terminal, and is the result of "an exemplary cooperation between Aeroports de Paris and (AFA)," (ADP) Chairman & (CEO), Pierre Graff said, admitting that the relationship between the two parties has not always been amicable in the past. The new terminal allows (AFA) regional airlines Brit Air, City Jet, and Regional to group their flights at a single location at (CDG) and meets (ADP)'s more general need to increase capacity. (T2G) can accommodate up to 3 million passengers annually and 18 airplanes per hour. It is designed specifically to offer optimum operating conditions for small-capacity airplanes (up to 100 seats) operated by regionals. It comprises three buildings set out in a fan shape. The first houses check-in facilities, including 18 self-service check-in kiosks, 10 self-service transfer kiosks, and 12 baggage drop-off points, including one specially designed for reduced-mobility passengers. The second building holds the boarding lounge and concession shops. The third houses the baggage claim area. "The inauguration of Terminal 2G provides an opportunity to reinforce (AFA)'s strategic positioning by offering customers improved quality of service and optimizing our operating conditions and resources," (AFA)/ (KLM) Chairman & (CEO), Jean-Cyril Spinetta said, stressing, "(AFA)'s regional operations are one of the key factors in the airline's hub strategy." The terminal is located east of Terminals 2F and 2E, and is in line with (AFA)'s expanding activity in that part of the airport. To obtain the exclusive use of the terminal for 19 years, (AFA) participated in (T2G)'s financing, an uncommon practice in Europe.

Lufthansa (DLH) Systems signed 7-year contracts with Air France (AFA) and (KLM) for use of its Sirax AirFinance Platform.

Amadeus said (AFA) finalized implementation of its Ticket Changer Shopper solution featuring online rebooking and revalidation capabilities. Since launching the technology across 80 websites in July, the carrier has seen a +35% increase in online rebooking transactions.

Panasonic Avionics reached an agreement with (AFA) to provide its "eX2" In-Flight Entertainment (IFE) system on 10 new 777-300ERs, the first of which is slated to enter service in March 2010. (KLM) already uses the "eX2" system on its 777s. Panasonic says it has delivered or taken orders for more than >900 (IFE) systems around the world.

October 2008: Air France (AFA) will abandon its daily, London Heathrow (LHR) - Los Angeles International (LAX) service, launched when the (EU) - USA "open skies" agreement came into force on March 30 and opened (LHR) to flights to/from the USA to all (EU) and USA carriers. Until then, Europe's busiest transatlantic airport was the exclusive preserve of British Airways (BAB), Virgin Atlantic Airways (VAA), American Airlines (AAL), and United Airlines (UAL). (AFA) was the first (EU) carrier to take advantage of "open skies" and launch operations to the USA from outside its home base. Results were positive initially, but it has decided to remove (LHR) - (LAX) from the 2008 to 2009 winter schedule, citing "the present economic and financial crisis." The 777 used on the route will return to Paris Charles de Gaulle (CDG) and the slot will be used for a daily (LHR) - (CDG), an (AFA) spokesperson confirmed. (AFA) will return to (LHR) in the summer 2009 schedule with a daily flight to New York (JFK), that will complement a 2x-daily, (LHR) - (JFK) operated by SkyTeam (STM) Alliance partner, Delta Air Lines (DAL). "The assignment of an Air France (AFA) airplane to this route will give SkyTeam (STM) Alliance passengers the benefit of a first class (F) cabin. At the same time, Delta (DAL) will offer its new full-flat seats in business class (C) on (LHR) - (JFK) flights," the carrier noted.

(AFA)/(KLM)'s acquisition of (VLM) Airlines was cleared by the UK Office of Fair Trading (OFT) along with approval of an "up-front entrant" remedy it said "restores airline competition to pre-merger levels" on the London City (LCY) - Amsterdam (AMS) route, which the (OFT) said is worth more than >£50 million per year. The remedy goes beyond the traditional slot divestment and requires a new entrant to use the divested slots. "A key lesson from abroad is that an incumbent airline's offer to make slots available does not guarantee that a competitor would take up the offer and enter onto the route and so some past airline merger remedies failed to achieve their goal of restoring competition," the (OFT) reasoned.

Eastern Airways was approved as the new entrant and will commence up to eight-times-daily, (LCY) - (AMS) in January. (AFA)/(KLM) said the (OFT)'s approval opens the door for "close" cooperation between VLM and (AFA) subsidiary CityJet, which also operates from (LCY).

(AFA) launched a booking facility for children under 12 traveling alone. The mandatory form for all unaccompanied children will be filled out automatically according to details given at the time of reservation. Customers can then print the form and hand it in to (AFA) ground staff. (AFA) said it is the first airline to offer online reservations for under-12 passengers on all flights and those of its franchised carriers. It carries 390,000 such passengers each year.

(AFA) and Air Mauritius (MAU) signed a new five-year code share agreement under which (MAU) will add its code to (AFA) flights from Paris Charles de Gaulle to points in Europe, Israel, and North Africa, while (AFA) will place its code on (MAU) flights connecting from Mahebourg.

(AFA) will consider deploying the A380 in India "when the airport infrastructure at the Mumbai and Delhi airports supports the airplane," which also would require a renegotiation of (AFA)'s rights with the Indian government, Senior VP International, Jean-Louis Pinson told Indian media, the "Business Standard" reported. (AFA) has 12 A380s on firm order and currently serves Bangalore, Delhi, Chennai, and Mumbai. "We want (AFA) to be a preferred European airline for the Indian passenger and we are looking at a long-term investment in this market as the market has strong growth potential," Pinson said, adding that the carrier plans to codeshare with either Jet Airways (JPL) or Kingfisher Airlines (KFH).

1st 777-200F (32965, F-GUOB), delivery.

November 2008: The four-day strike called by French pilot (FC) unions to protest a potential change in the retirement age, is expected to cause "severe disruption" to Air France (AFA)'s schedule and could cost the carrier up to -€100 million, (AFA)/(KLM) Chairman & (CEO), Jean-Cyril Spinetta said. The work stoppage will result in approximately half of (AFA)'s medium- and long-haul flights leaving Paris being cancelled, with further cancellations to the long-haul program expected as the strike progresses. (AFA)'s normal daily schedule comprises 760 medium-haul flights from all airports and 73 long-haul flights from the capital. It said a flight schedule during the strike "is difficult to forecast as it will have to be adjusted each day." It said the impact on approximately 800 flights operated by Brit Air, CityJet, Regional, CCM, and Airlinair "should not be as great".

Air France (AFA)/(KLM) remains interested in acquiring 20% to 25% in the new Alitalia (ALI) as well as the Austrian government's 41.6% stake in Austrian Airlines (AUL) Group (AAG), Chairman & (CEO), Jean-Cyril Spinetta confirmed. "We would be willing to invest about €200 million/$253.8 million [in Alitalia (ALI)] through a capital increase," he said. The Compagnia Aerea Italia (CAI) investor group, which was cleared by the Italian government to take over (ALI) for €1.05 billion, has not announced its choice of international partner. The new airline, which will incorporate Air One (ADH), reportedly may be ready to commence operations as early as December 1. "Everything is still very imprecise," Spinetta said, noting that "negotiations have not yet started . . . But yes, I meet regularly with (CAI) and [head] Roberto Colaninno, and I'm sure they do meet with others too."

Boeing (TBC) said it will deliver the first 777F to (AFA) in the 2009 first quarter, rather than the current quarter, as a result of the recently concluded machinists strike, according to press reports. The "Everett Herald" said (TBC) has two 777Fs in flight testing and one in production. There are 73 orders for the airplane.

January 2009: Air France (AFA)/(KLM) become the relaunched Alitalia (ALI)'s international partner and will take a 25% stake in the restructured carrier through a capital increase of approximately €323 million/$435.1 million. The decision ends months of speculation and uncertainty and came on the last day of the flag carrier's operation as the "old" (ALI).

(AFA)/(KLM) said the partnership will be based on a multi-hub strategy in which Paris Charles de Gaulle, Amsterdam Schiphol, Rome Fiumicino (FCO) and Milan Malpensa will feature "on an equal basis." Synergies derived mainly from network optimization and revenue management will be achieved over the next three years and should amount to some €720 million for (ALI) and around €90 million for (AFA)/(KLM) by either the second or third year.

January 12 was the old (ALI)'s last day of existence. At 10 pm, all assets were transferred to (CAI). The "new" (ALI) will carry the same name and logo and is essentially a merger of the slimmed-down (ALI) with smaller rival Air One (ADH), which was a (DLH) partner. The new airline will operate 148 airplanes to 70 destinations, including 13 international airports. The first "new" flight was scheduled to depart at 6 am from London Heathrow to (FCO).

Thales (THL) will supply (AFA) with a 777-300ER Full Flight Simulator (FFS). The technology includes (THL)'s eM2K motion system featuring hydraulic mass compensation and transmission. The USA (FAA) Level D certification is expected.

February 2009: (AFA)/(KLM) said it is taking measures in response to the deteriorating economic environment, including a -2% capacity reduction in the summer schedule that will replace a previously planned +1.7% increase. Capital expenditure will be cut by -€1.2 billion over the next two years and "several" hedging positions will be unwound. It is hedged at 43% in 2009 - 2010 and 20% in each of the following two years. Airline spokespeople were quoted by several news sources as saying that the (AFA) unit will reduce the payroll by between -1,000 and -2,000 positions through natural attrition and a hiring freeze. No layoffs are planned.

(AFA) introduced a new logo featuring the airline's name written as one word in navy blue with a red flourish to the right. (AFA) said re-branding will be gradual "to avoid additional costs" and that airplanes will be painted with the new livery (the tail will change slightly but will continue to feature blue and red vertical stripes) during maintenance.

WestJet (WJI), (AFA) and (KLM) announced their intention to code share by late 2009 or early 2010. A Memo of Understanding (MOU) signed by the three airlines also covers the possibility of interline e-ticketing, through check-in and loyalty program cooperation. (WJI) said the code share would include flights to/from Calgary, Montreal, Toronto and Vancouver. (KLM) will serve all four when its Amsterdam - Calgary route opens in May, while (AFA) flies to Montreal and Toronto. (WJI) Executive VP Commercial Distribution, Hugh Dunleavy said the (MOU) "marks the successful execution of the next step in our strategic plan." Last year (WJI) announced its intention to code share with Southwest Airlines (SWA).

Air France Industries (AFI), (KLM) Engineering & Maintenance (E&M) and Aviation Repair Technologies (ART) Services formed an engine dis-assembly joint venture, Turbine Support International (TSI). (TSI) will disassemble, inspect and repair (CF6-50), (CF6-80) and (CFM-56) parts to support engine repair activities on (AFA)'s and other third-party airlines and lessors. (AFI) and (KLM) (E&M) will assume a majority stake in (TSI), which will be based at (ART)'s Arkansas State, USA facility.

(AFA)/(KLM), British Airways (BAB), Cathay Pacific Airways (CAT), Virgin Atlantic Airways (VAA) and UK airports operator (BAA) announced formation of the Aviation Global Deal (AGD) Group, which expressed its support for inclusion of carbon dioxide emissions in a "new global climate deal" scheduled to be discussed at December's United Nations climate summit in Copenhagen.

Meeting in Hong Kong, the (AGD) argued for a "fair and effective global policy solution" on aviation emissions, which were not included in the 1997 Kyoto Protocol and are not managed under any current global agreement. (ICAO), which the group supports, is working on its own cap-and-trade plan, while the (EU) plans to include aviation in its controversial trading scheme (EU ETS) from 2012.

The four airlines and (BAA) said any global emissions policy must "offer genuine environmental benefits . . . be operationally and economically sound . . . maintain competitiveness between airlines and avoid market distortions . . . [and] balance the social and economic benefits of flying with the industry's responsibility to cut global emissions."

(CAT) (CEO), Tony Tyler said, "Aviation has a key part to play in reducing global emissions and for too long has been seen as part of the climate problem rather than part of the solution. We hope the work of our group will offer a practical industry-led solution that creates a level playing field and appeals to policy-makers, environmental groups and businesses alike." The (AGD) said it will seek support from other airlines and industry stakeholders.

(EASA) formally approved the 777F following its (FAA) certification on February 3. Launch customer, (AFA) is scheduled to take first delivery this quarter.

(AFA)'s first A380, powered by Engine Alliance (GP7200)s, completed its inaugural test flight. The four-hour flight was followed by a flight to Hamburg, where it will undergo painting and interior customization ahead of its October delivery. (AFA) has 12 A380s on order.

(AFA) took delivery of its first 777F. (AFA), which placed the launch order for the new factory-built freighter in May 2005, progressively will replace its five 747-400ERFs and four 747-400BCFs with 777Fs. Based on the 777-200LR platform, the (GE90-110B1L)-powered 777F has a Maximum TakeOff Weight (MTOW) of 766,000 lb/347,450 kg. Its range is 4,880 nm/9,038 km with a full payload of 226,700 lb. A total of 73 777Fs have been ordered by 12 customers. SEE ATTACHED - - "AFA-777F-OK-FEB09."

March 2009: Last month the Air France (AFA)/(KLM) group announced it would cut capital expenditure by -€1.2 billion/-$1.51 billion to address the economic downturn and would defer delivery of half-a-dozen planes including "777-300ERs, 777Fs and some Airbus (EDS) airplanes."

(AFA)/(KLM) said that it likely will report a -€200 million/-$271.4 million operating loss for its fiscal year ending March 31 and stated that its focus for the year beginning April 1 is "to limit our operating loss." Just last month, (AFA)/(KLM) said it still expected "a positive operating result" for the current fiscal year. But it said that "lower activity levels" in March reflect "a significant deterioration in unit revenues both in passenger and cargo, notably as a result of the decline in business travel and international trade." It added that the "negative effect of its hedges" has prevented it from benefiting fully from lower fuel prices.

(CEO), Pierre-Henri Gourgeon said, "Financial year 2009 to 2010 will begin [April 1] in a context of unprecedented difficulty, with little visibility on how the economy will evolve and on the volatility of factors such as currencies and the oil price." He said (AFA)/(KLM)'s "comfortable cash position" of €3.5 to €4 billion will "allow us to face the challenges ahead with confidence" and noted that passenger capacity will be lowered -3.4% and cargo capacity slashed -13% for the coming Financial Year (FY). "This drop, combined with our other cost-saving measures, should allow us to offset a significant part of the decline in revenues and to limit our operating loss," he said.

(AFA)/(KLM) announced that it completed the acquisition of a 25% stake in Alitalia (ALI) through a reserved share subscription worth approximately €323 million/$439.1 million. Its partnership with the restructured Italian carrier was announced in January but required approval from competition authorities. At that time, (ALI) said (AFA)/(KLM) would be entitled to nominate three of the 19 members of the board and two members of the executive committee. (AFA)/(KLM) said that the stake grants it "greater access to the Italian market thanks to (ALI) which, following its acquisition of Air One (ADH), has reinforced its position on the domestic market."

(AFA) will introduce a new premium economy (Y) cabin called "Premium Voyageur" that will be phased in gradually on all long-haul flights operated by 777s, A340s and A330s. The first routes to offer the new configuration will be Paris Charles de Gaulle (CDG) to New York (JFK), Tokyo Narita and Osaka Kansai. Premium Voyageur will feature a new seat especially designed for (AFA) and equipped with a fixed shell. Seats will be 48 cm wide, have 97 cm pitch and offer 123-degree back recline. Seatback In-flight entertainment (IFE) includes a 26cm-wide video screen. The new cabin comes with business class (C) amenities such as a travel kit, a bottle of water, noise-reducing headphones, a feather pillow and new wool blankets. At the airport, Premium Voyageur passengers will have priority check-in desks, a 30 kg baggage allowance and priority baggage delivery. The new class necessitates a seat capacity reduction. On average, an area with 40 economy (Y) seats will be converted to the Premium Voyageur cabin with 22 seats.

(AFA) began testing its "smartboarding" automated boarding system on flights from (CDG) to Amsterdam. Tests will run until 2010 and feature a personal card containing biometric, (RFID) and thermal printing technology, allowing passengers to board through a dedicated portal at their convenience. The program was developed in conjunction with Citizengate.

(AFA) will defer delivery of its sixth and seventh A380s in order to "create some savings on the down payment this year and the year after," (AFA)/(KLM) (CEO), Pierre-Henri Gourgeon said at the "Reuters" Travel & Leisure summit in New York.

(AFA) signed on as an A380 launch customer in 2001 and has firm orders for 12, with options on a further two. Its first A380 initially was scheduled to arrive in 2007, but owing to delays in the program, its first three will be delivered at the end of this year or in early 2010. It will be the first European carrier to operate the A380. Its A380s will be powered by the Engine Alliance (GP7200).

Airbus (EDS) announced the delivery of the 500th A321. The (CFM56-5/B3)-powered airplane was handed over in Hamburg to Air France (AFA).

April 2009: The (AFA)/(KLM) Group confirmed reports that it could cut up to -3,000 jobs in the current fiscal year that started April 1 and the 2010 to 2011 fiscal year in response to falling demand. The reductions, to be achieved through attrition, non-renewal of short-term contracts and retirements, were set to number -1,000 to -2,000 when the company released its fiscal third-quarter results two months ago. It cut its workforce by more than >-1,000 in the recently completed fiscal year through similar means and still hopes to avoid layoffs. "We should reduce our staff by -2,500 to -3,000 in the next two financial years," a spokesperson told "Agence France Presse." Last month it announced a deeper summer capacity cut and said it expects to report an operating loss of around -€200 million/-$266.1 million for the year ended March 31.

(AFA)/(KLM) and (Gol) (GOT) signed an agreement linking their respective loyalty programs and establishing a code share arrangement under which (AFA) will add its code to (GOT) flights between Rio de Janeiro, Sao Paulo and 13 Brazilian cities by mid-year. A similar deal is being prepared between (GOT) and (KLM). The European carriers operate 21 weekly flights to Sao Paulo Guarulhos and 14 to Rio de Janeiro Galeao.

Enerjet (ENJ) signed a five-year component support contract with Air France Industries (AFI) and (KLM) Engineering & Maintenance (E&M) covering maintenance and pool access for its 737NGs. Boeing (TBC) and (KLM) (E&M)'s 737NG component services program will offer (ENJ) cost savings of up to -30% and can ship parts from a global pool within 24 hours, the companies claimed.

Nice Cote d'Azur Airport (NCE) and (AFA), in partnership with Amadeus and (IER), are trialing a new "Pass and Fly" boarding device through October 30 on the Nice - Paris Orly route. It is being offered to members of (NCE)'s Club Airport Premier (CAP) program and (AFA)'s loyalty program. According to the companies, "The pilot project will simplify passenger recognition, the crediting of (CAP) points and airplane boarding, through the use of a mobile phone that is Near Field Communication (NFC)-enabled." This marks the first use of (NFC) - - a short-range wireless connectivity technology - - to enable mobile boarding passes, they said. Users are identified and issued a digital boarding pass when they swipe their (NFC)-enabled mobile phone across a reader at the airport.

(AFA) will take delivery of its 54th 777. The airplane is the 777th 777 produced by Boeing (TBC) and will be the first (AFA) airplane to feature its new livery.

May 2009: Despite what it called its responsiveness to unprecedented conditions in the second half of its fiscal year ended March 31, Air France (AFA)/(KLM) Group incurred its first loss since the 2003 merger, a -€814 million/-$1.1 billion deficit that compares to a +€756 million profit in 2007 through 2008. Its operating loss amounted to -€129 million, reversed from a +€1.41 billion operating profit the prior year. "The financial year 2008 - 2009 was one of contrasting halves, with a resilient performance in the first half wiped out by the full force of the economic crisis in the second. Business (C) traffic and cargo were especially affected, leading to a decline in revenues which accelerated in the fourth quarter," (CEO), Pierre-Henri Gourgeon said, conceding that the "sharp decline in oil prices had a negative impact on the fuel bill in the second half" in contrast to the first, when its hedging policy was efficient. It took a €715 million financial charge related to the change in the fair value of hedging instruments, mainly fuel.

Full-year revenue including (VLM) Airlines was €23.97 billion, down -0.6% year-over-year. Operating costs rose +6.1% to €24.1 billion, reflecting a +24.7% increase in the fuel bill to €5.7 billion. Excluding fuel, the rise was contained to 1.4% owing to the Challenge 12 program that delivered €675 million in savings. Unit revenue declined -3.7% to 6.84 euro cents but (CASK) was up +3.9% to 6.89 euro cents. Yield dropped -2.2% to 8.58 euro cents.

(AFA)/(KLM) will reduce passenger capacity by -4.5% in the summer and cargo capacity by -11%. The initial investment plan of €2.9 billion has been trimmed to €1.4 billion and the cost-savings target was increased to -€600 million.

(CEO)s of the Air France (AFA)/(KLM) Group and Delta Air Lines (DAL) signed a profit/loss-sharing joint venture (JV) agreement in Paris covering a wide network around 10 hubs representing more than >200 flights and approximately 50,000 seats per day. The airlines said their (JV), which will concentrate on service to/from Amsterdam, Atlanta, Detroit, Minneapolis, New York (JFK) and Paris Charles de Gaulle as well as Cincinnati, Lyon, Memphis and Salt Lake City, represents about 25% of the industry's total transatlantic capacity.
"This strategic partnership puts us in a good position compared with other major alliances, which are extremely active on the world's leading long-haul market, "(AFA)/(KLM) President & (CEO), Pierre-Henri Gourgeon said at the Paris news conference, stressing that by "optimizing the use of our pooled resources, this joint venture will help us weather the current economic situation and protect our product offering." The (JV) is expected to generate annual revenue of more than >$12 billion based on 2008 - 2009 data and $150 million in synergies for each of the two groups by the second year.

It covers routes between North America and Europe as well as between Europe and South America and between the USA and Africa and the Middle East. On all routes between North America and Europe, between Amsterdam and India, and between North America and Tahiti, (AFA), (KLM) and (DAL) will "consensually" share capacity, revenue, costs and profits/losses. The deal can be cancelled only with a three-year notice after an initial 10-year term.

The (JV) effectively replaces two existing agreements, the one between (AFA) and (DAL) signed in 2007, and the one between (KLM) and Northwest Airlines (NWA), now part of Delta (DAL), signed in 1997. The (KLM)-(NWA) deal was the first transatlantic (JV) between two carriers. "We know from experience that the success of a (JV) calls for shared vision and long-term commitment, the simplest of operating rules and fair sharing of revenues and costs," (KLM) President & CEO, Peter Hartman emphasized. The (JV) will not lead to the creation of a subsidiary, he said.

Owing to the global economic downturn and the depression in the cargo market, China Southern Airlines (GUN) has decided to postpone the launch of its cargo joint venture (JV) with Air France (AFA)/(KLM), according to (GUN) Chairman, Si Xianmin. "Based on the original plan, our cargo (JV) with (AFA)/(KLM) should have been launched in the first quarter. But we have to reconsider this plan after taking the current market situation into account," Si said.

Last June, (GUN) signed a framework agreement with (AFA)/(KLM) to launch a cargo joint venture in which it would hold 75%. "AE Cargo" was expected to operate 10 airplanes initially, (GUN) President, Liu Shaoyong said at the time. But now it was revealed that General Manager, Tan Wangeng said during an internal discussion that both
(GUN) and (AFA)/(KLM) believe that "it is not a good time to launch the cargo (JV) now." (GUN) should have taken delivery of four 777F freighters and one converted A300 by now but has decided to push back two of the 777s until year end and the remaining airplanes to 2010.

Air France (AFA) reached a sale and leaseback deal with (BOC) Aviation (SIL) for two 777-300ERs and two 777-200LRF freighters. The latter closed last week and the former is expected to close next month.

June 2009: ACCDT: (AFA) A330-203 (CF6-80E1A3) (660, /05 F-GZCP), with 12 (FC) - (CA)/216 passengers lost contact with Air Traffic Controllers over the Atlantic Ocean after leaving Rio de Janeiro on Flight AF447 to Paris. It reported it had run into turbulence and had experienced electrical problems. The crash resulted in all 12/216 fatalities.

(AFA) (CEO), Pierre-Henry Gourgeon said the A330-200 experienced "multiple technical failures," and the Brazilian air force spotted debris where a (TAM) (TPR) flight crew (FC) had seen spots of fire on the ocean surface shortly after the A330 was suspected to have gone down. While no cause has been identified, Gourgeon said flight AF447 "had sent a succession of a dozen datalink technical messages" indicating that "several electrical systems had broken down . . . It is probable that it was shortly after these messages that the impact in the Atlantic came."

(TAM) (TPR) said pilots (FC) flying one of its A330s between Europe and Rio de Janeiro Sunday night spotted "glowing spots on the high sea" that they believed were burning debris. As the search for airplane parts continues, the accident investigation is focusing on a severe thunderstorm system that stretched across the Atlantic just south of the equator at the suspected time of the crash. There have been suggestions by some that the accident may be linked with the two Qantas (QAN) A330 air data inertial reference unit (ADIRU) incidents last year. However, the (AFA) A330's (ADIRU)s were made by Honeywell (SGC), while the (QAN) airplanes are fitted with Northrop Grumman (GRU) equipment.

Leading the accident investigation is the French Bureau d'Enquetes et d'Analyses (BEA) pour la Securite de l'Aviation Civile. Director, Paul-Louis Arslanian said at a news conference that he is "not very optimistic" that the A330's flight data and cockpit voice recorders will be found owing to ocean depths of as much as 4,800 m at the scene. He said a preliminary examination of AF447's activities prior to its takeoff from Rio de Janeiro Galeao provided "no indications that would lead one to conclude the airplane had a problem at takeoff." (BEA) named Alain Bouillard, who was involved in the inquiry of the July 2000 (AFA) Concorde crash, as Head of the inquiry.
A key focus of the investigation is likely to be the weather in the area at the time of the crash. According to meteorologists at State College, Pennsylvania-based AccuWeather.com, AF447 probably flew into a large cluster of developing thunderstorms northeast of Fernando de Noronha. "Based on weather information from Fernando de Noronha, the updrafts associated with the thunderstorms may have reached up to 100 mph," AccuWeather said.

Investigators also likely will explore a possible structural weakness in the A330's wing because it hit an (AFA) A321 while taxing at Paris Charles de Gaulle in August 2006. Damage to the A330 was considered minor at the time but the A321's tail sustained substantial damage.

What is known is that 5 minutes after entering the supercell, the A330's airplane communications addressing and reporting system automatically transmitted data link "failure" messages via satellite. The first system to fail was the autopilot, at which point the airplane went into "alternate law" flight control mode. That occurs only when there have been multiple failures of redundant systems and means the pilots (FC) no longer had computerized flight mode protection for roll and pitch. The air data and inertial reference unit was next to fail at 11:11 pm, followed seconds later by the integrated standby instruments system, indicating major electrical failure. The primary flight computer stopped working at 11:13 pm. The last transmission, at 11:14 pm, was a "cabin vertical speed" warning, which could indicate either a sharp ascent or descent.

(AFA)'s largest pilots (FC) union said that management had informed it that at least two of three pitot tubes on each of (AFA)'s A330s/A340s will be replaced "within days," while (EASA) issued a statement declaring that all A330s "are airworthy and safe to operate." (AFA) has said that it began replacing pitot tubes on A330s/A340s in late April, but its pilots (FC) expressed concern that the replacements weren't being done quickly enough given the focus on the possible role of pitot tubes in the recent (AFA) A330-200 crash.

The French (BEA) has stated that data transmitted by Flight 447 before it was lost indicated "inconsistent" speed readings. The (SNPL)-(ALPA) union, representing more than >80% of (AFA) pilots (FC), said at least two of three pitot tubes would be replaced on all A330s "within days" even it if causes flight delays. "(AFA) has provided us with an extremely proactive and very accelerated replacement program," it said. The Alter union representing about 12% of (AFA) pilots (FC) encouraged members not to fly A330s/A340s until the pitot tube were replaced.

(EASA) issued a safety bulletin as a "precautionary measure" to remind operators "of existing procedures to be applied in the event of loss of, or unreliable, speed indication." It added, "With regard to reports [on AF447] about a possible malfunctioning of the airspeed indication system (pitot tubes), the agency is analyzing data with a view to issuing mandatory corrective action, without prejudging the outcome of the accident investigation."

The USA (NTSB) later said it is investigating two recent incidents involving A330s operated by TAM (TPR) and Northwest Airlines (NWA) in which the airspeed and altitude indications "may have malfunctioned."
Both airplanes landed safely. Such malfunctions are suspected in the May 31 loss of the (AFA) A330-200.

The (NTSB) said the (TAM) (TPR) incident took place on May 21 while Flight 8091 was en route from Miami to Sao Paulo. "Initial reports indicate that the flight crew (FC) noted an abrupt drop in indicated outside air temperature, followed by the loss of the Air Data Reference System and disconnections of the autopilot and autothrust, along with the loss of speed and altitude information," the (NTSB) stated. It said the flight crew (FC) used backup instruments and primary data was restored in about 5 minutes. The flight landed at Sao Paulo with no further incident and there were no injuries or damage to the airplane.

The (NTSB) said it also became aware of "another possibly similar incident" that occurred on June 23 and involved a (NWA) airplane flying between Hong Kong and Tokyo. According to the account, the incident took place at approximately 39,000 ft as the airplane was entering Japanese airspace. The weather was described as mostly clear with occasional isolated areas of rain and cloud tops at about 41,000 ft. Outside air temperature was put at -50C, TAT -21C.

As the A330 followed other airplanes in trail, weather radar indicated a large area of heavy rain at a lower altitude. The radar showed light precipitation at the A330's altitude, which the crew took to be ice crystals. The airplane entered the cloud tops and experienced light to moderate turbulence. After about 15 seconds it encountered moderate rain that was visible on the windshield. The pilots (FC) noted that the cockpit suddenly became very warm and humid and a few seconds later, all three airspeed indicators rolled back to 60 kt and autopilots and autothrottles disengaged, as did rudder limit protection. "The Master Warning and Master Caution flashed," accompanied by "the sound of chirps and clicks letting us know these things were happening." At this point, the captain (FC) hand-flew the airplane on the shortest vector out of the rain at "the recommended 83%N1 power setting." Airspeed indicators returned briefly but failed again. The failure lasted for 3 minutes. All instrumentation eventually returned to normal but the airplane remained in Airbus (EDS) "alternate law" for the remainder of the flight.

SEE AIRBUS (EDS) ACTION RE-PITOT TUBES DETAILED LATER IN AUGUST 2009.
SEE ATTACHED FLIGHT INTERNATIONAL ARTICLES OF JANUARY 2010 - - "AFA-2009-06 ACCDT-A/B."

SEE MAY 2011 REPORT ON READINGS OF THE BLACK BOXES RECOVERED FROM THE CRASHED A330.

SEE FINAL FRENCH BEA REPORT ISSUED JULY 2012.

American Airlines (AAL) and (AFA) will both conduct Paris-to-Miami "green flights," hoping to prove that (GPS) technology can dramatically reduce fuel burn and emissions. The NextGen technology recently installed at Miami International Airport will allow the planes to fly more direct routes and make quicker landings, potentially saving several thousand pounds of fuel.

China Southern Airlines (GUN) and (AFA)/(KLM) have postponed the launch of their cargo joint venture indefinitely owing to the rapid slump in the global cargo market, (GUN) Chairman, Si Xianmin said. The original plan targeted a launch in the first quarter, but last month, Si said the companies decided to delay "after taking the current market situation into account." He said, "We haven't given up on it, but its launch has to depend on when the cargo market can recover. So far we don't have a specific timetable for it." He predicted that cargo market recovery will be later than passenger recovery. "If the international passenger market can recover next year, then cargo market recovery will be later than that," he said. (GUN) was set to hold a 75% stake in the joint venture, which was slated to operate 10 747s and A330s within two years. It is the only one of China's big three that does not operate a cargo subsidiary, although China Eastern Airlines (CEA)'s China Cargo Airlines (CKK) and Air China's (BEJ)'s Air China Cargo (CAO) each have suffered large losses.

Air France Industries (AFI) and (KLM) Engineering & Maintenance (E&M) announced the creation of two new joint ventures (JV), part of their strategy to build a global network with proximity to customers. (AMES), a 50/50 (JV) between (AFI) and Safran Group subsidiary Aircelle, will offer joint capabilities for repair and overhaul of nacelles for Rolls-Royce (RRC), (GEC), (CFM) International, and Pratt & Whitney (P&W) engines on airplanes operated by Middle East customers. The (JV)'s services will be marketed jointly by the (AFI) and Aircelle sales teams. (AMES) will be based in Dubai's Jebel Ali Free Zone and is expected to be operational at year end.

(AFI) additionally concluded a shareholder agreement with Royal Air Maroc (RAM) under which (AFI) will acquire a 50% stake in (ATI), (RAM)'s airplane maintenance arm. This (JV) will provide a dedicated (MRO) service to support A320 family airplanes. A new hangar with two bays will be built at Casablanca International and should be operational next year. (AFI) President, Alain Bassil described the Moroccan venture as "an important project which should enable us to develop business on narrow body airplanes in a more competitive environment than Europe."

(AFI) said that Thomas Cook (JMA) renewed its existing (CFM56-5B) engine support contract for 16 A320s/A321s operated by Thomas Cook Airlines (UK) (JMA)/(GUE) and Thomas Cook Scandinavia AS (PRH). The contract's coverage has been extended to add five A320s operated by Thomas Cook Belgium (TCW).

(AFI)/KLM Engineering & Maintenance and AirAsia X (ASX) signed a contract covering component support for its fleet of A330-300s. (ASX) ordered 25 of the type and has taken delivery of two. The remainder will enter service between now and 2013. (AFI)/(KLM) E&M said it will examine the possibility of developing local capabilities at its Singapore logistics center "to further enhance its support to (ASX) and help sustain (AFI)/(KLM) E&M operational activities on similar strategic contracts throughout the region, notably with the carriers IndiGo (IGO) and Kingfisher (KFH) [Airlines]."

The intent to develop its Singapore logistics center is part of (AFI)/(KLM) E&M's strategy of "customized services, expertise and proximity" that includes creation of new joint ventures. It announced participation in two new (JV)s at the Paris Air Show and confirmed that it increased its stake in Miami-based Aero Maintenance Group to 81.4%.

(AFI)/(KLM) E&M also announced a five-year component support contract from Canadian charter airline Enerjet (ENJ) for its fleet of 737NGs. Support will be offered by the joint Component Services Program of Boeing (TBC) and (KLM) (E&M).

(AFI) and (KLM) (E&M) are confident they will be able to maintain a positive operating result this year despite the downturn in the airline industry and consequent contraction of (MRO) contracts. "It will be a challenge, and results could be affected by the currency exchange rates, but we believe we are well positioned to sustain our operational performance," (AFI) President, Alain Bassil said at the Paris Air Show earlier this month. (AFI) and (KLM) (E&M) combined posted a +51% year-over-year increase in operating income to €95 million/$132.5 million for the fiscal year ended March 31 owing mainly to strong activity in their higher margin engine and component support activities. Revenue inched up +0.5% to €2.98 billion. Third-party work represented 34% of revenue and was up +3% on the prior year. "The crisis is giving rise to new opportunities that can offset the market downturn," Bassil stated. He explained that owing to the recession, some airlines are forced to postpone investment in fleet renewal and continue to operate airplanes that have reached maturity and need more maintenance, while carriers lacking the critical competitive mass to carry out some maintenance tasks increasingly are turning to subcontracting. A third pocket of growth is in emerging markets, "where recent airplanes in operation are starting to age and hence need more and more maintenance," he said. Regions with growth perspectives include the Middle East, India and China. (KLM) (E&M) Executive VP, Peter de Swert contended that growth also will come from taking market share from independent (MRO) providers "because they do not have their own fleet as a stable basis for activity and thus they are more exposed to the crisis." On the other hand, Original Equipment Manufacturers (OEM)s are stepping up their after-sales efforts in order to offset falling sales and margins, he noted.

The (MRO) division of the (AFA)/(KLM) Group earlier this month launched a common website detailing joint offerings and solutions. But for the time being, (AFI) and (KLM E&M) will maintain their own brands. "It is very difficult to find a new name for two companies that have a very strong brand recognition in the market," Head of Sales, Rob Pruim said.

July 2009: Japan Airlines (JAL) and Air France (AFA) will expand their code share network July 7 with daily, Paris Charles de Gaulle - Istanbul Ataturk service operated by (AFA).

WestJet (WJI) and Air France (AFA)/(KLM) launched their interline partnership, allowing (AFA)/(KLM) passengers to connect to Calgary - Vancouver (WJI) flights as well as flights from both cities to Edmonton. In February, the airlines said they had signed a Memo of Understanding (MOU) signaling their intention to code share by late 2009 or early 2010. (WJI), which long has sought to expand its international reach via interline partnerships, also has an agreement to cooperate with Southwest Airlines (SWA) but implementation has been postponed. (WJI) Executive VP Commercial Distribution, Hugh Dunleavy said the interline services made available are just the "first step in our strategic partnership" with (AFA)/(KLM), adding, "Starting with only three Canadian cities allows us to take a measured and thoughtful approach to implementation, with the intent to expand this travel to our entire Canadian network."

(AFA) rolled out its first A380, which was painted in (AFA)'s updated livery and is scheduled to enter service in November on a daily Paris Charles de Gaulle - New York (JFK) service. Powered by (GP7200) engines, the A380 will be configured for 538 passengers in a three-cabin layout with 80 business (C) and 106 economy (Y) seats on the upper deck and nine first class (F) and 343 economy (Y) seats on the main deck. That compares with 450 seats on Qantas (QAN) A380s, 471 on Singapore Airlines (SIA), and 489 on Emirates (EAD).

(AFA)'s A380 will not be fitted with its new long-haul premium economy class, which is set to debut on the (CDG) - (JFK) route on October 25, although a spokesperson confirmed that a retrofit would be possible at a later stage. All of (AFA)'s 777s, A340s and A330s will have the new cabin by the autumn of 2010.

"The A380, particularly well-suited to the current economic context, will enable (AFA) to offer its customers an even better quality of service whilst at the same time limiting costs," (CEO), Pierre-Henri Gourgeon said. In a recent conversation in Paris, he said that (AFA)'s A380s would not be equipped with special luxury features specifically designed for the double-deck airplanes like spas or spacious premium suites. "It's an airplane, an airplane offering high-density seating and thus offering lower unit costs," he said. "We will use it as such."

(AFA) will be the first European airline to operate the A380 and the first to use it on transatlantic flights between Europe and the USA. It has 12 on order, four of which will start operating this winter and next spring.

Meanwhile, Gourgeon said at the company's annual general meeting that "the improvement we might have imagined in May or June has not materialized," according to "Bloomberg News," and that (AFA)/(KLM) remains committed to the employee reductions announced in April. "Reuters" quoted him as saying, "I haven't excluded temporary layoffs. We will watch very closely. These measures should allow us to avoid affecting employment" with permanent layoffs.

(AFA) confirmed a "Le Figaro" report that one of its A320s flying from Rome Fiumicino to Paris Charles de Gaulle on July 13 had a "very brief six-second anomaly" in its airspeed data display that was "probably due to icing at high altitude." The airplane was fitted with the new Thales (THL) BA probes, (AFA) noted, adding that the crew (FC) applied the necessary procedures and the airplane maintained its flight path with no change. The incident was reported and is being examined closely by manufacturers and authorities, (AFA) said. "Le Figaro" cited an internal crew (FC) report on flight AF1905 that indicated "brutal loss of speed indications," followed by the disappearance of information measuring wind force and other factors.

Malfunctions in the pitot tubes were "a factor, but not the only one" in the crash of AF447 into the Atlantic Ocean on June 1, according to French investigator (BEA). (AFA) ordered replacement of the pitot probes across its Airbus (EDS) fleet with the newest generation sensors. Both the old and new anemometric sensors used on (AFA)'s A330/A340s and A320s are made by Thales (THL) Group.

The main (AFA) pilot (FC) union, (SNPL), confirmed the A320 incident. "We are aware of the incident. We are awaiting details," a spokesperson told the "Associated Press." "If the problem is indeed with the pitot tubes, the (SNPL) union will ask (AFA) that planes be equipped with Goodrich (BFG) sensors"

(AFA)'s first A380 (033, F-HPJA) rolls out at Airbus (EDS)'s Finkenwerder facility in Hamburg, Germany. The A380 will enter commercial service in November on the Paris (CDG) - New York (JFK) route - - SEE PHOTO - - "AFA-A380-JUL09.

August 2009: Air France (AFA) and China Southern Airlines (GUN) announced an expansion of their code share agreement covering (GUN)'s flights from Guangzhou to Kunming, Xiamen, and Wenzhou and (AFA)'s service from Paris Charles de Gaulle to Madrid, Milan Malpensa, and London Heathrow.

(AFA)/(KLM) said that it wishes to strengthen its existing partnership further with (CSA) (both are SkyTeam (STM) Alliance members) and to continue to explore any new areas of cooperation that "could be of mutual benefit." The Czech Ministry of Finance said that the public tender will move forward as scheduled without (AFA)/(KLM). (CSA) is planning significant layoffs. It said that -860 of its 4,600 employees will be let go and the cuts will affect all areas of the company.

Airbus (EDS) told airlines that Thales (THL) pitot probes should be replaced with Goodrich (BFG) models on all A330s/A340s as a "precautionary measure" and (EASA) said it will issue an order within two weeks calling for at least two of three (THL) speed sensors on those airplane types to be replaced with the (BFG) versions. The move comes after weeks of concern over (THL) pitot probes sparked by the May 31 Air France (AFA) Flight 447 crash in which malfunctioning speed sensors were "a factor" in the A330-200's demise, according to the French (BEA). (AFA) has confirmed that it has had subsequent pitot probe problems. (EDS)'s recommendation does not include a call to replace Thales (THL) probes on A320s.

(EASA) said that it too "will recommend that all A330 and A340 (EDS) airplanes currently equipped with Thales (THL) pitot probes should be fitted with at least two Goodrich (BFG) probes." (THL) told "Agence France Press" that its pitot probes "fulfill the specified requirements and . . . have been certified by the authorities."

The French (BEA) said that it has abandoned the search for the flight data and cockpit voice recorders (FDR)/(VVR) from the (AFA) A330-200 that crashed May 31 about 360 miles off Brazil's northeast coast, killing all 228 aboard, though it has not ruled out restarting the search later this year. Searches using sophisticated equipment including a specialized submarine "did not make it possible to locate the airplane wreckage," the accident investigation agency said. It added that it will "gather together a team of international investigators in the next few weeks to analyze the data collected with a view to [initiating a new] search phase and to determine the requirements and means to undertake this." Even without the (FDR) and (CVR), investigators have been able to review significant data sent by AF447. (BEA) previously confirmed that the doomed A330 sent 24 messages over 15 minutes via its airplane communications addressing and reporting system. That data revealed "inconsistency between the measured speeds as well as the associated consequences," leading to speculation that malfunctioning pitot probes played a role in the crash. (BEA) said the probes were "a factor but not the cause" of the accident.

Airbus (EDS) has told airlines that Thales (THL) pitot probes (used by the crashed airplanes) should be replaced with Goodrich (BFG) models on all A330s/A340s as a "precautionary measure."

French (BEA) Director, Paul-Louis Arslanian said investigators have not determined the cause of the May 31 (AFA) A330-200 crash and reiterated that there still is no evidence that speed sensors caused the accident. "At the moment, we can't explain the accident," Arslanian told journalists in Paris. "We are making progress and will make progress and I'm optimistic, but this will take time. It takes a year-and-a-half, being responsible and reasonable, in order to make progress and ensure that we've run through all of the questions."

(BEA) will launch a new and "costly" search for plane debris and the flight data and voice recorders in the fall using sonar and undersea robots. "The area we must explore is practically equivalent to Switzerland," Arslanian said, noting that since the black boxes have stopped pinging, searching for the wreckage is "like crossing Switzerland with a flashlight." (BEA) will require more funding, he said, with costs potentially reaching "several tens of millions of euros." He said Airbus (EDS) has indicated it is prepared to participate to a significant degree and he hopes for a contribution from (AFA)/(KLM).

Air France (AFA) started selling seats for its first commercial A380 flight on November 23 from Paris Charles de Gaulle to New York (JFK). It will be the first European airline to operate the A380 and the first carrier to fly transatlantic between Europe and the USA. It also will operate the airplane on a westbound flight November 20 and return November 21 and will auction off 380 of the 538 seats to benefit childrens' charities. The Web-based auction is scheduled for October.

September 2009: The Air France (AFA)/(KLM) Group hopes to reach breakeven by the April 1 start of the 2010 to 2011 fiscal year excluding its fuel hedge contracts, (CEO), Pierre-Henri Gourgeon told "Les Echos." The hedges will continue to have a negative impact, but previously announced cost cuts should stop the deterioration in cash flow, he said, adding that he does not expect a return to 2008 traffic levels until 2012. Gourgeon insisted that (AFA) is not evolving toward a low-cost service concept on its medium- and short-haul network, but "passengers are moving toward the low-cost. We will continue to offer a classic service, though with certain adaptations. We do not intend to remove the front of the cabin. There are still passengers that wish more comfort." The network will be adapted to save money, he confirmed. For instance, from Paris Charles de Gaulle, (AFA) will be operating fewer frequencies with larger-capacity A321s instead of A320s beginning in November. It lost -€431 million/-$635.9 million in its fiscal first quarter ended June 30.

(AFA) announced plans to offer employees a voluntary redundancy plan that could result in as many as -1,500 departures. (AFA) said it informed the Comite Central d'Enterprise (CCE) workers council of the decision and intends to discuss the matter this week "with a view to presenting a project voluntary redundancy plan to the (CCE) on October 21." (AFA) said five months ago that it intended to reduce its payroll by -2,500 to -3,000 positions by April 2011. Those cuts were supposed to come through attrition, nonrenewal of short-term contracts and retirements. It did not say whether the new voluntary redundancies would be included in that previously announced figure or in addition.

The (AFA)/(KLM) Group will trim winter capacity (ASK)s by -2% year-over-year, comprising a -1.8% reduction in its long-haul network and a -2.9% cut in medium-haul flying. (AFA) and its subsidiaries will lower winter capacity by -1.7%, while (KLM) will cut by a more comprehensive -4%. The carriers insisted that connectivity at their Paris Charles de Gaulle (CDG) and Amsterdam hubs will be maintained.

(AFA) said it will rationalize its Latin American and Asian flights, implement transatlantic efficiencies thanks to its joint venture with Delta Air Lines (DAL) and reduce frequencies to New York (JFK), Dubai (DXB), and Johannesburg (JNB). It will serve those three destinations daily with its first three A380s, which are scheduled to enter service on November 23 to (JFK), January 18 to (DXB) and in early March to (JNB). Capacity will increase to Havana and Punta Cana and will remain unchanged on Indian Ocean routes.

(ASK)s on (AFA)'s medium-haul network will be down -1.1%, and it said the "first effects of capacity reorganization planned for summer 2010 can already be seen on European routes." Frequencies from (CDG) to Amsterdam, Barcelona, Geneva, Madrid, Munich, Moscow Sheremetyevo, and Rome Fiumicino will be cut "without impairing the quality of connections with long-haul flights, so as to use larger capacity airplanes which are more efficient." Flights also will be reduced to Verona, Dublin, Birmingham, and Edinburgh. Service from London City to (CDG), Strasbourg, Nice and Geneva will be discontinued, but there will be a new twice-daily flight to Nantes.

Domestic capacity will be reduced by -3.2%, with "major" capacity adjustments at Paris Orly, closure of services from Clermont-Ferrand to Biarritz, Lille, Marseille, Strasbourg, and Toulouse and fewer frequencies on Bordeaux - Nantes, Lyon - Nice, and Lyon - Bordeaux routes.

(AFA) will introduce its Premium Voyageur (PV) premium economy product on flights to Singapore and Beirut beginning December 28 and flights to Hong Kong and Beijing from January 18, 2010. Second daily (PV)-equipped flights to New York (JFK) and Tokyo Narita will launch in early December. (AFA) expects the product to be available on all its 777s, A330s and A340s by the end of 2010.

(AFA) is working to form a committee of 5 to 6 members that "will have a look into the internal practices and the decision-making processes having an impact on the security of our flights," a spokesperson said. (AFA) is assessing its internal safety practices in the wake of its May 31 A330-200 accident and subsequent complaints from its pilots (FC). The "Wall Street Journal (WSJ)" reported that (AFA)'s SkyTeam (STM) partner, Delta Air Lines (DAL) may be represented on the committee. "What we want is to have an external view on all these practices, decision-making processes and modes of functioning," the spokesperson said. "There may be people from (DAL) [involved] . . . We want commission members whose competency is indisputable." The (WJA) reported that (AFA) is asking for outside input in part because the cause of the A330 accident remains undetermined.

(AFA) is still studying the possibility of launching high-speed train services in Europe under its own brand in cooperation with a partner, although the project will not take off as initially planned in 2010 when the intra-European rail transport market opens up, (AFA) confirmed. (AFA) declined to comment on a report in "Les Echos" that talks between (AFA) and "Veolia" about a partnership have stopped. "The marriage between (AFA) and Veolia Transport in rail transport seems to be going nowhere," the newspaper said, adding that the partners were "no longer on the same wavelength". (AFA) never publicly detailed its plans, but a company official confirmed that in a potential first stage, (AFA) was interested in operating the Brussels Midi railway station to Paris Charles de Gaulle (CDG) route in cooperation with Veolia but could not secure enough slots to run the service with sufficient frequency. Currently, (AFA) rents seats on the five daily return (TGV) trains on the route from French railway company (SNCF). It stopped flying between Brussels and (CDG) in 2001.

Air France (AFA) Industries and (KLM) Engineering & Maintenance extended its contract with Virgin Atlantic Airways (VAA) for heavy airframe maintenance on 747-400s for one additional year through 2011. It also announced that its (CRMA) subsidiary was named a primary repair source on the Engine Alliance (GP7200) TCF and combustion chambers by (GE). Air France (AFA) Industries and (KLM) Engineering & Maintenance signed a Total Care Support contract with Midex Airlines (MIX) of Abu Dhabi covering its 747-200F.

October 2009: (AFA)/(KLM) will begin charging economy class (Y) passengers for a second checked bag on flights between Europe/North Africa and the USA next month. The second piece of luggage will cost €50/$74.80 on flights from Europe and $50 on flights from the USA. Premium loyalty program members will be exempt, and (AFA)/(KLM) is offering a -20% discount to those checking in and paying online.

(AFA)/(KLM) declined to comment on a report in "La Tribune" that it is considering whether it should negotiate further airplane delivery deferrals with Airbus (EDS) and Boeing (TBC). The deferrals would affect mainly its 777/777F and A380 orders. (CEO), Pierre-Henri Gourgeon previously said the group had adjusted its airplane delivery plan and fleet investment to weather the economic crisis. This included the rescheduling, over a four-year period, of 17 airplanes under firm order initially planned for delivery during its fiscal years ending March 31, 2010, and March 31, 2011, as well as deferring the exercise of five options. This resulted in a reduction in fleet investment net of disposals from €1.8 billion/$2.7 billion to €500 million in Fiscal Year (FY) 2009 to 2010 and from €1.8 billion to €700 million in (FY) 2010 to 2011. However, it did not specify which airplane deliveries were affected except for its A380s. In March, (AFA) stated it would push back the delivery of the sixth and seventh of its 12 ordered A380s, although it did not give a timeframe. Its first A380 will arrive at the end of this month and another two soon thereafter.

(AFA) launched its new premium economy product, Premium Voyageur, on Sunday's 777-200ER flight from New York (JFK) to Paris Charles de Gaulle. The airplane featured 24 Voyageur seats.

(AFA) took delivery of its first A380-861 (033, F-HPJA) in Hamburg and will become the first European airline to operate the jumbo airplane when it places it on Paris Charles de Gaulle - New York (JFK) service on November 20. The Engine Alliance (GP7200)-powered airplane seats 538 passengers (nine in first (F), 80 in business (C), and 449 in economy (Y)), will carry 22 flight attendants (CA) and is one of three that (AFA) will take through next spring. Johannesburg is scheduled to be its next A380 destination. (CEO), Pierre-Henri Gourgeon said each airplane will allow (AFA) to save -€12 to -€15 million/-$17.7 to -$22.1 million per year. (AFA) has 12 A380s on order and Airbus (EDS) now has delivered 20 of the type. SEE PHOTO - - "AFA-A380-DELIVERY-OCT09."

November 2009: Claiming that the downturn "has led to behavioral changes among our customers which are likely to persist beyond the recovery," (AFA)/(KLM) proposed an enlarged voluntary redundancy program affecting 1,700 jobs next year as it announced a -€147 million/-$219.3 million loss in its fiscal second quarter ended September 30, reversed from a +€27 million surplus last year.

(CEO), Pierre-Henri Gourgeon said (AFA)/(KLM) "responded quickly" to the recession and is "adapting more rapidly than expected." It is targeting €700 million in cost cuts this fiscal year and he cited the improvement from the first quarter (a -€431 million loss) as evidence that "all these measures are starting to have a positive impact."

Nevertheless, "lack of visibility over the timing and strength of the economic recovery means we must pursue our efforts in terms of cost reduction," he said, necessitating the additional job cuts as (AFA)/(KLM) pursues full-year operating breakeven. In September, it announced a voluntary redundancy program comprising 1,500 positions.

(AFA) announced a simplification to its European medium-haul product that from April 1 will feature just two classes of service, Premium business class and Voyageur economy. Stressing that its service "will not be that of a low-cost carrier (LCC)," (AFA) is cutting both fares and costs in the back of the airplanes. Economy (Y) passengers will pay to check a second bag and will have seat choice at check-in. For €10/$14.95, they can reserve a booking and fare for "several days" before confirming, (AFA) said. "Fares have been reduced and the simplified price range makes it easier to find the lowest price," it added. Business (C) class passengers will be offered two options: A lower Premium Eco fare "for those seeking flexibility and efficiency at the best prices," and Premium Business, which features an open seat next to the customer.

December 2009: Air France (AFA) will launch 5x-weekly, Paris Charles de Gaulle - Abu Dhabi service on May 3 aboard a two-class A330.

INCDT: Air France (AFA) A330-203 (CF6-80E1A3) (516, /03 F-GZCK) performing Flight AF445 from Rio de Janeiro Galeao to Paris Charles de Gaulle (CDG) on Sunday night/Monday morning November 29/30 declared a mayday owing to severe turbulence near the equator, according to "The Aviation Herald." The incident occurred near the site where AF447 was lost six months ago. The A330-203 was at 38,000 ft on airway UN866 about 4 hours after takeoff, just before the DEKON waypoint about 680 nm northeast of Fortaleza, when the crew declared the mayday on the international emergency frequency and said they would descend to a lower altitude. AF445 landed safely at (CDG) at 12:04 local time, close to schedule. The distress call was relayed by the crew of a (TAM) (TPR) A330 performing Flight JJ8055 from (CDG) to (GIG). (AFA) issued a statement saying the flight crew (FC) "carried out a normal descent to avoid severe turbulence" and that it sent out the emergency message indicating it had altered its prescribed flight level after it was "unable to obtain immediate authorization from air traffic control (ATC)." The "moderate to severe" turbulence lasted about 30 minutes, (AFA) said.

In its second interim report on the May 31 loss of the Air France (AFA) A330-200 over the Atlantic, France's (BEA) issued its first safety recommendations and concluded that "In the absence of any data from the flight recorders, the main parts of the airplane and any witness testimony on the flight, the precise circumstances of the accident, and therefore its causes, have still not been determined."
Investigators' inability to recover the recorders "raise[s] questions about the adequacy of the means currently in use on civil transport airplanes for the protection of flight data with the technological possibilities and the challenges that some accidents represent." Consequently, it recommended to (ICAO) and (EASA) that commercial airplanes flying over water should be equipped "as rapidly as possible" with an additional locator beacon capable of transmitting on a frequency between 8.5 and 9.5 kHz and that transmission time of the flight recorder Underwater Locator Beacon (ULB)s must increase to at least 90 days from the current 30. It also urged a study into the possibility of mandatory regular transmission of basic flight parameters.

Regarding the possibility that malfunctioning pitot tubes played a role in the accident, (BEA) said it analyzed 13 examples of the temporary loss of reliable indications of one or more airspeeds involving A330s/A340s operated by (AFA), TAM (TPR), Qatar Airways (QTA), Northwest Airlines (NWA) and Air Caraibes (GUP). The events occurred in highly unstable air masses in the vicinity of deep convective weather phenomena, flight levels were between FL340 and FL390, static temperature was below -40C in 12 cases and turbulence was recorded each time.

"The certification criteria are not representative of the conditions that are really encountered at high altitude, for example, with regard to temperatures," (BEA) concluded. "In addition, it appears that some elements, such as the size of the ice crystals within cloud masses, are little known and that it is consequently difficult to evaluate the effect that they may have on some equipment, in particular the pitot probes. In this context, the tests aimed at the validation of this equipment do not appear to be well-adapted to flights at high altitude."

It recommended that (EASA) study the composition of cloud masses at high altitude "with appropriate precision" and modify icing certification criteria in accordance with the results and in coordination with other regulatory authorities.

Air France (AFA)'s A380 was held at New York (JFK) because of a fuel transfer problem. Passengers scheduled to fly to Paris Charles de Gaulle (CDG) on Flight AF007 were put on alternate flights. (AFA) took delivery of the airplane on October 30 and it first flew from (CDG) to (JFK) on November 20.

January 2010: Air France (AFA)/(KLM) will launch 5x-weekly, Paris Charles de Gaulle - Abu Dhabi service on May 3 aboard an A330-200.

(AFA) announced the introduction of a new seat on A320 family airplanes operating domestic flights. The Recaro seat will be phased in from January 30 and will be -40% lighter (weighing 9.1 kg) than its predecessor and feature 2 to 3 inch in additional legroom and a 15-degree recline.

February 2010: French air traffic controllers launched four days of industrial action, reportedly in protest of the European Commission (EC)'s "Single European Sky" initiative that they claim could result in staffing cutbacks. The French (DGAC) released a statement ordering airlines to cancel 25% of their flights at Paris Charles de Gaulle (CDG) and half at Orly (ORY). Air France (AFA) said it would be able to operate its entire long-haul schedule over the four-day period but that it planned to operate just 75% of its short- and medium-haul flights at (CDG) and (50%) of its short- and medium-haul (ORY) schedule. "Some flights may have to be cancelled during the day. There may also be delays. (AFA) will do its utmost to fly all its passengers to their final destination at the earliest possible opportunity," it said, adding that it may transfer customers to flights operated by (KLM) through Amsterdam or other SkyTeam (STM) alliance carriers.

Air France (AFA) operated its first A380 flight from Paris Charles de Gaulle (CDG) to Johannesburg (JNB), becoming the first airline to fly the airplane to Africa. The 538-seat airplane will operate three of (AFA)'s 10 weekly flights between the airports to March 28, at which point the route's overall frequency will fall to daily. When (AFA)'s third A380 enters service in April, (CDG) - (JNB) will be operated exclusively by the type. Its other A380 flies to New York (JFK), and Tokyo Narita is scheduled to come online this year.

(AFA) said it planned to resume flights to Port-au-Prince with five-times-weekly service to Miami and five-times-weekly flights to Paris Orly, via Pointe-a-Pitre. Both routes will be daily from March 1.

March 2010: Air France (AFA)/(KLM) said that poor weather and last month's four-day air traffic controller (ATC)s strike had an estimated -€22 million/-$30 million impact on revenue. (AFA)/(KLM) flew 13.98 billion (RPK)s traffic in February, down -0.6% year-over-year, against a -5% drop in capacity to 17.99 billion (ASK)s. Load factor rose +3.5 points to 77.7% LF.

(AFA)/(KLM) said it plans to reduce its summer schedule capacity by just -0.3% year-over-year, comprising a +8% lift in long-haul (ASK)s and a -4% reduction in the medium-haul network, as "tentative signs of recovery, depending on the country, have been perceived."

(AFA)/(KLM) will add Abu Dhabi (five-times-weekly from May 3) and Bata (2x-weekly, via Malabo) as new (AFA)/(KLM) destinations from Paris Charles de Gaulle (CDG) and new (KLM) flights from Amsterdam to Denpasar (4x-weekly via Singapore) and Aruba (2x-weekly). The summer program begins March 28.

(AFA)'s summer schedule comprises -0.9% fewer capacity (ASK)s than the summer 2009 program. Long-haul capacity will be up +0.1%. The airline's plan to fit its long-haul fleet (excluding in-service A380s and 777s operating to Caribbean and Indian Ocean destinations) with the new Premium Voyageur premium economy product is a factor. Long-haul capacity would have been up 3.2% without the new seats, which should be installed completely in time for the winter schedule. It will operate four A380s at that time and plans to launch new A380 service to Tokyo Narita.

The medium-haul network will be cut -3.7%. (AFA) said product simplification and a reduction to just two classes of service on medium-haul flights "has resulted in a better balance between the number of frequencies and the average size of airplanes." Sixteen airplanes will be retired from the medium-haul network. Flights from (CDG) to Munster, Trieste and Shannon will be suspended.

The domestic schedule will be cut -2.2%, with service from (CDG) to Pau, from Orly to Lannion and Limoges and from Lyon to Rouen suspended.

(KLM)'s overall capacity will rise +1% year-over-year, comprising a +2% long-haul increase and -4.5% medium-haul cut. It is raising frequencies to several Asian destinations and increasing transatlantic capacity by +1%. It will complete the retirement of its F 50s by the start of the schedule, and by the end it will have introduced an additional 10 new E190s over the previous year. It also is replacing 737 Classics with 737NGs.

Air France (AFA)/(KLM) intends to maintain its strong position in Africa and a strategy of continuous growth despite the economic downturn and increased competition, Senior VP Africa & Middle East, Etienne Rachou said. "In terms of the number of destinations, frequencies and product, we are the number one to Africa. We will do everything we can to keep our leadership position," he said yesterday in Brussels.

(AFA)/(KLM) claims a 30% share of the passenger market between Europe and Africa. It operates some 380 weekly flights from its Paris Charles de Gaulle (CDG) and Amsterdam hubs to 43 destinations on the continent, of which 29 are unique to (AFA), 10 are served only by (KLM) and four by both. Rachou refrained from detailing the position of its closest competitor, but in January the Lufthansa Group stated that its airlines (Lufthansa (DLH), Austrian Airlines (AUL), Brussels Airlines (DAT)/(EBA), Swiss International Air Lines (CSR) and bmi (BMA)) operated to 31 destinations in 27 African countries. During the summer schedule, (AFA) will launch A319 all-premium flights to Bata and increase capacity (ASK)s to the continent by +2.9%. (KLM) will grow capacity +0.9%.

"Competition to Africa is not new, and we're not particularly afraid. We cannot deny that the competition is getting more challenging," Rachou admitted, noting the growing competition is coming "not only" from European rivals but from airlines across Africa and the Middle East as well as USA carriers, "which have rediscovered Africa. It's up to Air France (AFA)/(KLM) to show and sell our assets and keep our passengers happy," he said. "This is one of the reasons behind the product upgrades."

Air France (AFA) and Aeroflot (ARO) signed a new cooperation agreement allowing code share flights beyond their respective hubs at Paris Charles de Gaulle (CDG) and Moscow Sheremetyevo (SVO). The agreement entered into effect March 28. (AFA) will add its code to and sell (ARO) flights from (SVO) to Khabarovsk, Novosibirsk, Krasnoyarsk, Irkutsk, Yekaterinburg et Nizhnevartovsk, while (ARO) will add its code to (AFA) flights from (CDG) to Strasbourg, Lyon, Marseille, and Lisbon. Currently, the SkyTeam (STM) alliance pair sells eight daily code share flights between (CDG) and (SVO).

(AFA) was the first airline to introduce the A380 to Africa with a thrice-weekly, (CDG) - Johannesburg service launched February 7. When its third A380 arrives next month, it will operate the jumbo daily on the route. Other upgrades include introduction of its new premium economy cabin on its wide body fleet. It currently is available to four African destinations.

"Passenger feedback on our new intermediary cabin is very positive," Rachou said, adding that it is too early to release any figures on demand, "but it is going in the right direction. The fact that the product is being expanded throughout the fleet [777s, A340s and A330s operating from (CDG)] by the end of the year gives an indication." (AFA) introduced the new cabin last October on flights to New York (JFK). It now operates retrofitted wide bodies to 10 destinations, increasing to around 30 by June.

Air France (AFA) and (KLM) will begin charging all economy (Y) passengers €55/$55 for a second checked bag on tickets sold from March 28. They previously levied that charge only on routes from Europe to the USA and Canada, and said the move is "in line with industry standards." The baggage allowance will be raised from 20 kg to 23 kg per bag, and a third piece will be charged €200/$200. Premium economy passengers will be allowed two 23 kg bags free of charge and business class (C) passengers three. Customers will receive a -20% discount if they book online. There will be exceptions on some 50 routes and for premium loyalty program members.

Air France (AFA) flight attendants (CA) reportedly will strike March 28 to 31 in protest of an airline proposal to reduce crew numbers on some domestic and European flights. Six unions are involved. (CGT) Secretary, Eyal Jonas told "Bloomberg News" that the walkout will occur unless the sides can come to an agreement, while "The Connexion" reported that (AFA) plans to cut the equivalent of -750 full time cabin staff (CA) positions by the end of 2011. (AFA) did not acknowledge the threat.

Later, (AFA) said it expects "normal" operations after the majority of the six unions representing cabin crew (CA) called off a proposed strike scheduled for March 28 to 31. The unions had proposed the four-day stoppage in protest of cost-cutting measures foreseen in the carrier's so-called New European Offer (NEO) plan. As part of the overhaul of its short- and medium-haul network, due to take off April 1, (AFA) is seeking to remove one flight attendant (CA) from each of its A319s and reintroduce hot meals on flights longer than >2.5 hours, which the unions claim breaches collective labor agreements.

Amadeus Information Technology (IT) Holding announced plans for an Initial Public Offering (IPO) in the first half of this year. The travel reservations technology provider hopes to raise €910 million/$1.23 billion. It currently is 52.8% -owned by (WAM) Acquisition, whose shareholders are London-based, private-equity firms (BC) Partners and Cinven. Air France (AFA) holds 23.1% and Iberia (IBE) and Lufthansa (DLH) 11.6% each. Amadeus said 2009 revenue rose +1.8% from 2008 to €2.46 billion and (EBITDA) was up +2.3% to €894 million.

777F28 (32969, F-GUOD), sold to FedEx (FED). A320-214 (4251, F-HEPB), AerVenture leased. A321-212 (4252, F-GTAY), delivery.

April 2010: American Airlines (AAL) became the first USA airline to "test next-generation technology and procedures" on a transatlantic flight aboard a 767-300 from Paris Charles de Gaulle to Miami using several fuel conservation measures including single-engine taxi on departure and arrival, continuous climb and descent, a tailored arrival and "several key elements" of its existing fuel conservation program Fuel Smart.

The scheduled passenger flight came one day after Air France (AFA) successfully operated "the very first transatlantic flight optimized from start to finish to reduce noise and emissions levels," according to (AFA).

An (AAL) spokesperson said that its flight "by all accounts went well" and was "on course" to have saved approximately 1,500 lbs of fuel, although the airplane arrived in Miami 10 minutes behind schedule. (AAL) expects to have "preliminary numbers" and projects that a final analysis may be available in "a couple of weeks."

The test, conducted through the Atlantic Interoperability Initiative to Reduce Emissions (AIRE), was operated as a normally scheduled flight to obtain "real-time" benefits. (AAL) had tried twice before to operate the (AIRE) flight but had been impeded first by an "airplane issue" and then by bad weather, the spokesperson said.

The (AFA) flight, aboard a 747-400ER from (CDG) to (MIA), cut CO2 emissions by -6 to -9 tonnes and saved -2 to -3 tonnes of jet fuel utilizing shorter taxi times, continuous climb, optimum altitude and speed and continuous descent. Noise levels during the departure and arrival phases were minimized by up to 7dB, (AFA) said. It projected that once optimizations are applied to all (AFA) long-haul flights to and from North America, CO2 emissions will be cut by -135,000 tonnes per year with fuel savings of -43,000 tonnes.

In the next few weeks, (AAL) will conduct post-flight data analysis along with the (FAA) and the European Commission (EC). It has conducted trials in Miami with the (FAA) since last year to determine the best way to use NextGen technology. It said it aims in 2010 to increase its annual fuel savings rate to +120 million gallons, which will reduce carbon emissions by -2.5 billion lbs.

European Commission (EC) President, Jose Manuel Barroso announced that he has established an ad-hoc group to assess the economic fallout from the multiday closure of much of Europe's airspace, with a particular focus on how the air transport industry was affected.
"The Iceland volcanic ash cloud has created an unprecedented situation," he said, adding that it is important that any measures taken "are coordinated at the European level." Barroso's move followed calls by the European airline industry for (EU) governments to provide carriers with financial relief similar to that supplied in the aftermath of "9/11."

"European airlines have asked the (EU) and national governments for financial compensation for the closure of airspace," British Airways (BAB) CEO, Willie Walsh said. "There is a precedent for this . . . as compensation was paid after the closure of USA airspace following the terrorist events of 9/11." (BAB) estimates that lost passenger and freight revenue combined with the costs incurred supporting stranded passengers totaled £15 million/$23 million to £20 million daily Thursday through Monday. Walsh said he had been informed that the UK government was working on the issue, "as it recognizes the impact on airlines and the contribution that aviation makes to the British economy."

"The European air transport industry, which has come to a complete standstill, is losing €150 million/$202.5 million per day and today is the fifth day," Air France (AFA)/(KLM) (CEO), Pierre-Henri Gourgeon said. "(AFA)/(KLM) accounts for a quarter of these losses, ie, €35 million [per day]." He added that "500,000 direct employees and three times as many staff employed indirectly could very soon be temporarily laid off."

Citi analysts said the cost to airlines and airports "could be worse" than the seven-day closure of USA airspace following 9/11. However, the report also pointed out a "critical" difference: "The fear of flying impact is not there this time, thus reducing any lasting negative revenue impacts and additional security costs." Citi projected that the lost revenue "could be short-lived" as passengers resume travels plans and "load factors are likely to be extremely high in the two weeks following reopening of airspace." A bigger issue, it said, is the stranded-passenger accommodation costs incurred by airlines, which it estimated at £8 million daily for (BAB) alone.

Air France Industries and (KLM) Engineering & Maintenance signed a one-year deal with Pegasus Airlines (PGS) for maintenance of nine (CFM56-7B)s on a turnkey basis.

A320-214 (4267, F-HEPC), AerVenture leased and A380-861 (043, F-HPJC) delivery.

May 2010: Air France (AFA)/(KLM) flew 14.28 billion (RPK)s traffic in April, a -15.9% drop from the year-ago month. Capacity was down -15.3% to 17.85 billion (ASK)s and load factor fell -0.6 point to 80% LF.

The Air France (AFA)/(KLM) Group reported a heavy net loss of -€1.56 billion/-$1.93 billion for its fiscal year ended March 31, nearly double its -€814 million deficit in the prior year, but management reiterated that it believes a breakeven operating result is possible in the current financial year excluding the impact of pre-2009 fuel hedges and subject to costs related to the closure of European airspace owing to volcanic ash.

The group estimates that the Icelandic volcano-related disruptions April 15 to 21 caused -€260 million in lost revenue with a -€160 million impact on its operating result.

(CEO), Pierre-Henri Gourgeon said, "2009 to 2010 will go on record as our 'annus horribilis.' The global economic crisis had a profound effect on the entire airline industry. In addition, (AFA)/(KLM) had to contend with the tragedy" of the A330-200 that crashed last May 31, killing 228. The results for Fiscal Year (FY) 2009 to 2010 include a negative impact of -€637 million linked to pre-2009 fuel hedges.

Revenue fell -15% year-over-year to €20.99 billion, including a -13.6% decline in passenger revenue to €16.27 billion. Total operating expenses dropped -14.8% to €13.24 billion. Operating loss deepened to -€1.28 billion from -€186 million in the prior year.

Passengers carried dipped -4.1% to 71.4 million and (RPK)s traffic fell -3.2% to 202.5 billion on a -4.3% cut in capacity to 251.1 billion (ASK)s. Passenger load factor improved +1 point to 80.7% LF. Yield was down -10.8% on the previous year to €0.0765 and (RASK) decreased -9.7% to €0.0615. (CASK) slid -4.6% to €0.0646.

For the fiscal year's fourth quarter ended March 31, (AFA)/(KLM) posted a -€691 million net loss, up +44.3% from a -€479 million deficit in the year-ago period. Quarterly revenue slipped just -0.8% year-over-year to €5.02 billion as both passenger and cargo demand picked up and restructuring of the cargo business launched in the previous quarter started to bear fruit. Unit revenue was up +2.7% per (ASK) and +30.9% per (ATK).

Operating costs dipped -1.4% to €5.52 billion and -4.1% excluding fuel, reducing operating loss for the quarter -7.1% to -€497 million, of which -€381 million was attributed to passenger activity. Excluding the negative impact of fuel hedges, the operating loss would have been -€324 million.

The company is in negotiations with the relevant authorities concerning the eventual level of compensation for the volcano disruptions, Gourgeon said, noting that (AFA)/(KLM) also is "actively working with the authorities to define a comprehensive and pragmatic approach to the volcanic ash risk so as to avoid the repetition of unnecessary flight operation stoppages in the future."

2 A320-214s (4295, F-HEPF; 4298, F-HEPE), (ILF) leased.

June 2010: Air France Industries (AFI) and (KLM) Engineering & Maintenance (E&M) reached a two-year renewal of its contract with AeroMexico (AMX) to maintain its fleet of five 777s. (AFI)/(KLM) (E&M) won a five-year contract with Saga Airlines (SGZ) to provide maintenance for (SGZ)'s (CFM56-7B) engines powering its 737 fleet. Maintenance will be provided on a turnkey basis.

Air France (AFA) confirmed it will take delivery of its fourth A380 by the end of August and will operate it on a thrice-weekly, Paris Charles de Gaulle - Tokyo Narita route starting September 1. The flight moves to daily from October 5. Tokyo will be the first destination in Asia to be served by Air France (AFA) using an A380.

July 2010: Air France (AFA)/(KLM) flew 17.88 billion (RPK)s traffic in June, up +4.7% from the year-ago month. Capacity rose +0.4% to 21.33 billion (ASK)s and load factor improved +3.5 points to 83.8% LF.

Boosted by a €1.03 billion capital gain from the sale of its 23.1% stake in Amadeus, the (AFA)/(KLM) Group posted a net profit of +€736 million/+$953 million for its fiscal first quarter ended June 30, reversed from a -€426 million deficit in the year-ago period.

In addition to the gain from the Amadeus Initial Public Offering (IPO), (AFA)/(KLM) cited a “strong recovery” in both passenger and cargo traffic, with a “strong rise in unit revenues, especially in cargo.”

Revenue for the three months rose +10.7% year-over-year to €5.72 billion. (AFA)/(KLM) said that without the impact of the airspace closures, revenue would have lifted +15.9%. Operating costs increased +3.3% owing in large part to a +26.8% increase in fuel costs to €1.44 billion. Excluding fuel, costs declined -2.6%. Operating loss narrowed to -€132 million from -€496 million a year ago.

The group said the closure of European airspace in April “masked” the recovery in passenger traffic. Quarterly traffic declined -2.3% to 49.28 billion (RPK)s, but was up over >4% in both May and June versus last year. Capacity was reduced -4.9%, leading to a +2.2 point gain in load factor to 81.5% LF.

Unit revenue recovered to levels “close to those of 2007 to 2008," it said. (RASK) was up +14.8% to €0.0689 and yield rose +11.8% to €0.0845.

Passenger revenue heightened +8.8% to €4.37 billion. The operating loss of the passenger business narrowed to -€142 million from -€338 million in the year-ago period. Without the impact of the airspace closure, it would have been at breakeven, (AFA)/(KLM) said.

It noted that forward bookings for the fiscal second quarter are “solid” but cautioned that uncertainty surrounding the economic environment and fuel prices “leads us to remain prudent” for the second half of the year. “Nevertheless, in view of the positive indications from the medium-haul transformation and the quicker than expected turnaround of the cargo business, our objective for full year 2010-11 is of operating breakeven, excluding the impact of the airspace closure in April.” It reported a €1.28 billion operating loss for its fiscal year ended March 31.

(AFA)/(KLM) and Martinair (MTH) agreed to pay €87 million/$110 million to settle civil antitrust claims in the USA related to price-fixing in the air cargo business on flights to/from the USA between 2000 and 2006.

The agreement is subject to court approval. (AFA)/(KLM) and (MTH) pleaded guilty in a USA federal court in 2008 and paid $350 million in criminal fines "for participating in a multi-year conspiracy to fix prices for air cargo rates."

The civil actions, which have been brought as class actions, were filed initially in 2006 after the USA Department of Justice and the European Commission (EC) initiated investigations of air cargo price-fixing. The investigation by the (EC) remains pending.

Air France (AFA) and Flybe (BEE) concluded an extensive commercial agreement under which (AFA) will market and add its AF code to 45 Flybe (BEE) routes between the UK and France and 17 UK domestic routes through Birmingham, Manchester, and Southampton.

In turn, Flybe (BEE) will market and add its code to five AF routes between France and the UK as well as to seven new domestic French routes and 11 international routes.

Under the agreement, which is being described as a “landmark tie-up," Flybe (BEE) will feed (AFA)’s hub at Paris Charles de Gaulle, “allowing seamless and easy access to all of (AFA)’s extensive international services.” British Airways (BAB) holds a 15% stake in Flybe (BEE) and it is unclear how it will respond.

“We are delighted that Flybe (BEE)’s successful business model has been recognized with such prestigious and positive endorsement from one of the world’s most respected carriers,” Chairman & (CEO), Jim French said. “The future cooperation with Flybe (BEE) i(s a major opportunity for (AFA) to strengthen its position in the UK, Europe’s biggest market,” said (AFA) (COO), Bruno Matheu, adding, “Over the past few years we have watched with great interest Flybe (BEE)’s growth and development and been impressed by its performance in becoming a respected leader within the sector.” The code share agreement will take effect in October.

LAN Cargo (LCO) has become the 12th operator to join Boeing (TBC)’s 777 component services program, a venture established by (TBC) and Air France Industries (AFI)/(KLM) Engineering & Maintenance. The program provides 24-hour access to inventory, including avionics, actuators and precision mechanical assemblies.

Dale Wilkinson, a VP for Boeing Commercial Airplanes (TBC), in
a statement said, “The 777F freighter provides a competitive edge for (LCO)’s operation, and the 777 component services program will further extend that advantage. “Additionally, (LCO)will stabilize its long-term 777F maintenance budget planning,” he added.

(LCO) took delivery of its first 777F freighter in 2009 and currently operates two of the type. A third is scheduled to be added to the airline’s fleet in 2012.

According to Boeing (TBC), Air France Industries (AFI) and (KLM) Engineering & Maintenance support more than 1,230 airplanes
operated by 150 carriers.

Air France Industry (AFI)/(KLM) (E&M) was selected by Air Canada (ACN) for maintenance support of the airline’s (GE90-110/115) engines powering its 18 777-200LR and 777-300ER airplanes. The exclusive 12-year contract covers on-site/on-wing operations, shop visits, engine components, spare engine support and engine engineering.

August 2010: Air France/(KLM) Group 2009 Passenger traffic = 202,455 Million (RPK)s (-3.2%) (World #2 highest) (#3); Total employees = 104,721 (-2.1%) (world airlines' #1 highest total). SEE ATTACHED - - "AFA-2010-08-WLD RPK-2009."

(AFA)/(KLM) flew 19.7 billion (RPK)s traffic in July, up +1.2% from the year-ago month. Capacity stayed flat at 22.86 billion (ASK)s, while load factor climbed +1.1 points to 86.2% LF.

Air France (AFA) announced that Bruno Delile was promoted to Group VP New Aircraft & Fleet Planning. Delile has spent most his career with (AFA), primarily at Air France Industries (AFI), the company's Maintenance Repair & Overhaul (MRO) arm, including serving as (AFI)/(KLM) (E&M) VP Operations for the Americas. He also worked for Safran Group's Hispano-Suiza subsidiary. He succeeds Pierre Vellay.

INCDT: Air France (AFA) confirms that flight AF344 Paris - Montreal on August 10 operated by a 777, landed at the Canadian military base Goose Bay at 20.10 local time. Following a sudden and unexpected system failure alarm, the pilots (FC), in accordance with procedures, decided to land at the nearest airport to ensure the safety of passengers and the airplane.

Air France (AFA) is selling, and then leasing back, one 777-300ER, A330-200 and four A320 family airplanes to Steven Udvar-Hazy’s new Air Lease Corporation (ALC). Some of the planes, including the 777, are new and haven’t yet been delivered. (ALC), managed to raise more than $3 billion in capital in its bid to quickly build a large new portfolio of airplane assets from scratch.

4th A380-841 (049, F-HPJD), delivery.

September 2010: SkyTeam (STM) alliance members China Southern Airlines (GUN) and Air France (AFA) signed an agreement to launch a joint venture (JV) on the Paris – Guangzhou route beginning November 1 that includes revenue sharing. (AFA) said in a statement that the two airlines will have “joint governance” of the (JV) and a “management committee, with five working groups, will be in charge of implementing it in the fields of network management, revenue management, sales, produces and finance.”

Air France/(KLM) Group (CEO), Pierre-Henri Gourgeon said, “This (JV) agreement strengthens the links which already exist between (AFA) and (GUN). It consolidates our position in one of the most buoyant regions of the world and enables us to offer our customers improved service while maintaining costs. In this way, the Air France (AFA)/ (KLM) Group is confirming its rank as European airline leader to China.”

(GUN) President & (CEO), Tan Wan Geng added, “The (JV) will enable both airlines to improve their competitiveness on a very buoyant market.”

Since 2004, (AFA) and (GUN) have been operating code share flights between Paris and Guangzhou, thanks to an agreement signed in 2003, according to (AFA). Within the framework of this (JV), “several other connecting destinations beyond these two cities will gradually be introduced on a code share basis,” said (AFA).

China Eastern (CEA) is also expected to become a formal member of the SkyTeam (STM) alliance next year and is negotiating with (AFA)/(KLM) about forming a (JV) on its Shanghai – Paris and Shanghai – Amsterdam routes. It is reported that (AFA) would sign a similar (JV) agreement with (CEA) on the Shanghai – Paris route at the end of 2011.

(KLM) has been placing its code on (GUN)’s daily, Guangzhou – Amsterdam service on board a 777-200 since 2001. (KLM) has also operated a (JV) with (GUN) on its Beijing – Amsterdam route since June 2006.

(GUN) signed a framework agreement with Air France (AFA)/(KLM) to launch a cargo (JV) in 2008, which was postponed owing to the global financial crisis. (KLM) Senior VP Route Network, Pieter Elbers noted in May that both carriers would formally launch the cargo (JV) once market conditions are appropriate. He also didn’t rule out the possibility of seeking a cargo (JV) with (CEA).

(AFA) has terminated regional services from Lyon to Copenhagen Kastrup, Deauville, Madrid, and Munich.

(AFA) started operating an A380 on the Paris Charles de Gaulle Paris (CDG) – Tokyo Narita (NRT) route. (CDG) - (NRT) is (AFA)’s third route served by an A380, following (CDG) - New York (JFK) in November 2009 and (CDG) - Johannesburg in February. (AFA)’s A380s are equipped with 538 seats in three cabin classes with nine in first class (F), 80 in business (C) and 449 in economy (Y). (AFA) has ordered 12 A380s, four of which have been delivered.

A320-214 (4402, F-HBNB), delivery.

October 2010: Air France (AFA)/(KLM) Group raised its financial forecast for its fiscal year ending March 31, 2011 and stated that “given the revenue performance of recent months, together with the current level of forward bookings,” it is now expecting a “positive” operating result except in the case of a major adverse event.

At the end of July, the group predicted it would reach breakeven at the operating level excluding the impact of air space closure in April. It estimated the loss due to the volcanic ash crisis was -€158 million/-$221.4 million. The group is scheduled to report its first-half earnings on November 17.

Last week it announced it will increase capacity (ASKs) by +3.3% in the winter schedule compared with winter 2009, mainly owing to a +4.1% hike in long-haul capacity whereas activity on medium-haul routes will remain practically stable (up +0.5%).

(AFA) will grow (ASK)s by +1.7%, encompassing an average +2.5% increase on long-haul routes and a -1% reduction on medium-haul routes. The most notable growth will be to Asia, with a +5.4% rise in (ASK)s.

Air France (AFA) will launch a thrice-weekly, Paris Charles de Gaulle – Bangkok – Phnom Penh service March 27 with an A340-300. (AFA) will deploy a 777-200ER on the route during the peak summer months.

Embraer and Air France Industries (AFI) signed a 5-year Flight Hour Pool Program contract with Alitalia (ALI) to support (ALI)’s fleet of six Embraer EMB-170s.

Royal Jordanian (RJA) renewed its contract with Air France Industries (AFI)/(KLM) (E&M) for component and engine support for its A340s for three more years. It also signed a new contract to provide component support for its A330s, which includes repairs and access to the spares pool, with the deployment of a Main Base Kit at Amman in Jordan. In December 2009, (RJA) and (AFA)/(KLM)’ Group’s Maintenance Repair & Overhaul (MRO) unit also renewed the existing (CF6-80C) repair contract for a further three years. The engines are cared for at (AFI)/(KLM) (E&M)’s Amsterdam engine shop.

See video "VISIT PARIS" - -

November 2010: The Air France (AFA)/(KLM) Group reported a consolidated net profit of +€1.03 billion/+$1.39 billion for its fiscal first half ended September 30, reversing a loss of -€573 million in the year-ago period.

Current period results were net of a +€1.03 billion gain on the sale of shares in Amadeus. Net income restated for non-recurrent items was +€104 million compared to a -€509 deficit last year.

First half revenues rose +14.8% to €12.37 billion and operating income was +€444 million reversed from an operating loss of -€543 million in 2009. (CEO), Pierre-Henri Gourgeon said, “In the context of a more favorable economic environment, all the strategic actions we have undertaken over the past year have enabled us to return to profit.” He noted that, despite the disruption in April, (AFA) improved its operating result “by some +€1 billion in the first half.”

In the second quarter ended September 30, net income was +€290 million after an additional provision of €127 million relating to the European Commission (EC)’s fine for air cargo price-fixing. The group posted a net loss of -€147 million in the year-ago period. Second-quarter revenue rose +18.6% to +€6.65 billion and operating costs grew at a lower rate of 7.4%, and 4.9% ex-fuel. Operating profit was +€576 million, reversed from a -€47 million loss in the year-ago period.

Both load factors and unit revenue improved in the reporting quarter owing to a recovery in demand, combined with a continued limitation of its capacity and restructuring measures implemented at its passenger and cargo divisions, (AFA)/(KLM) said. Passenger traffic was up +0.6% to 56.46 billion (RPK)s traffic with capacity reduced by 0.5% to 66.56 billion (ASK)s. Load factor gained almost one point to 84.8% LF.

Unit revenues continued to improve and are again approaching pre-crisis levels. (RASK) increased by +18.9% to 7.36 eurocents with a marked improvement in both medium- and long-haul. “On the latter, both unit revenue and traffic rose more strongly in premium than in economy (Y) class. Unit revenue in premium has, however, yet to return to its pre-crisis level,” it noted. Unit revenue per (RPK) traffic rose +17.7% to 8.68 eurocents. (CASK) rose +7.3% to 6.59 eurocents.

The operating result of the passenger business stood at +€453 million compared to a -€15 loss a year earlier and the operating result of its cargo business was in the black for the second consecutive quarter at +€7 million, reversed from a -€147 million loss in the prior second quarter.

For the first half, passenger traffic declined -0.8% to 105.74 billion (RPK)s on a -2.6% capacity reduction to 126.99 billion (ASK)s, improving load factor by +1.5 points to 83.3% LF. (CASK) rose +8% to 6.80 eurocents. (RASK) increased +17% to 7.14 cents and unit revenue per (RPK) rose +14.9% year-on-year to 8.57 eurocents. The operating profit of the passenger business was +€311 million versus a -€353 million loss a year earlier and the operating profit of its cargo business was +€18 million, reversed from a -€344 million loss in the year-ago first half.

The group upgraded its full-year outlook to an (EBIT) in current market conditions of “over >€300 million,” compared to its previous forecast that operating profit would be “positive.” It also said that in the context of its three-year plan through Fiscal Year (FY) 2013 to 2014, it has fixed financial objectives of a -3% reduction in unit costs on a constant currency and fuel price basis, an adjusted operating margin above 7%, a return to a gearing ratio of 0.5 and (ROCE) of 8% after tax.

(AFA) will launch a thrice-weekly, Paris Charles de Gaulle – Bangkok – Phnom Penh service on March 27 with an A340-300. (AFA) will deploy a 777-200ER on the route during the peak summer months.

(AFA) launched flights to Bata in Equatorial Guinea (it already serves the country’s capital Malabo) and new (KLM) flights to Kigali in Rwanda via Entebbe in Uganda. These are hardly economies on the verge of joining the likes of Switzerland in terms of income, but Equatorial Guinea has oil, while Rwanda is rapidly distancing itself from an era of genocidal violence in the 1990s by instituting what the World Bank sees as some of the most dramatic economic reforms worldwide. In general, (AFA) handles most of west Africa, while (KLM) handles most of east Africa, in line with the ex-colonial links of their respective home nations.

The European Commission (EC) fined 11 airlines a total of €799 million/$1.1 billion for "operating a worldwide cartel which affected cargo services within the European Economic Area." In a statement, the (EC) said the carriers "coordinated their action on surcharges for fuel and security without discounts over a six-year period." Air France (AFA) received the largest fine at €182.9 million, followed by its affiliate (KLM) at €127.2 million. Other fines include British Airways (BAB) (€104 million), Cargolux (CLX) (€79.9 million), Singapore Airlines (SIA) (€74.8 million), (SAS) (€70.2 million), Cathay Pacific Airways (CAT) (€57.1 million), Japan Airlines (JAL) (€35.7 million), Martinair (MTH) (€29.5 million), Air Canada (ACN) (€21 million), Qantas (QAN) (€8.9 million) and (LAN) Airlines (€8.2 million).

Lufthansa (DLH) and its subsidiary Swiss International Air Lines (CSR) "received full immunity from fines under the (EC)’s leniency program, as it was the first to provide information about the cartel," the (EC) stated.

"It is deplorable that so many major airlines coordinated their pricing to the detriment of European businesses and European consumers," said (EC) VP Competition, Joaquin Almunia. "With today’s decision, the (EC) is sending a clear message that it will not tolerate cartel behavior." The (EC) charged that the "cartel members" coordinated pricing from December 1999 to February 2006.

The (EC) in late 2007 sent out official statements of objections to as many as 25 carriers regarding cargo price fixing. It said that 11 carriers originally charged were not fined.

The (EU), USA Department of Justice, Australian Competition and Consumer Commission and other authorities worldwide have been investigating anti-competitive practices in air cargo since 2005. Cargolux (CLX) President & (CEO), Ulrich Ogiermann and Senior VP Sales & Marketing, Robert Van de Weg were recently indicted in a USA court on charges of conspiring to fix and coordinate certain surcharge rates on air cargo shipments to and from the USA.

In a statement, Air France (AFA)/(KLM) said it considered the level of the fine to be "disproportionate given the fact that the economic analysis demonstrated that the actions in question had no detrimental effect on the freight shippers or the freight forwarders. Moreover, the level of the fines disregards the economic hardship that the air cargo industry has suffered, and will have a distortive effect on the level playing field." It added that it intends to appeal the decision to (EU) courts. Because the level of the fine exceeds the level of provisions already taken by the company for potential cargo antitrust payments, (AFA)/(KLM) will book a charge of €127 million for the first half of its current fiscal year.

(SAS) said in a statement it has not been involved in a global cartel and the fines are disproportionate. It also plans to appeal the decision, a process that could take several years. The fines will be accounted for in (SAS)'s third-quarter earnings.

Air Canada (ACN) said in a statement it may appeal the decision and said the penalty is “more than adequately” covered by a C$125 million provision it made in 2008.

"We are highly disappointed and strongly contest the considerable level of the fines, which we believe to be disproportionate to (SAS) Cargo's actions," said (SAS) Chief Legal Officer, Mats Loennkvist. "We have cooperated fully with the (EC) during the entire investigation and, for slightly more than four years, we have disputed the (EC)'s view that (SAS) Cargo has been involved in a global cartel."

December 2010: ACCDT: A Paris court has said Continental Airlines (CAL) was “criminally responsible” for the crash of an Air France (AFA) Concorde supersonic jet 10 years ago in June 2000, and fined it 200,000 euros and ordered to pay 1 million euros to Air France (AFA), which operated the doomed flight. (CAL) Mechanic (MT), John Taylor received a fine of 2,000 euros and a 15-month suspended prison sentence.

Continental Airlines (CAL) vows it will appeal a French judge’s ruling that the airline and one of its employees was guilty of involuntary manslaughter in the July 25, 2000, crash of an (AFA) Concorde, in which 113 persons died, including four on the ground. (CAL) was fined €200,000/$268,234 and ordered to pay Air France (AFA) €1 million related to the accident. A (CAL) mechanic (MT) was also found guilty and received a suspended jail sentence of 15 months. Three French officials — a former Aerospatiale executive and two representatives, at the time, of the French civil aviation agency (DGAC) — were also cleared of contributing to the crash. The French officials were accused of not addressing known Concorde design flaws. During its takeoff run for a flight to New York, AF4590 ran over a metal piece that the court determined fell off a Continental (CAL) DC-10 that had taken off immediately before the Concorde. The supersonic airplane’s fuel tank was struck by debris and caught fire. It crashed shortly after takeoff to the west of Paris Charles de Gaulle Airport as it tried to divert to Le Bourget Airport. All 113 people on board were killed. The airplane never recovered after a 16-month grounding and was finally taken out of service in 2003.

Air France Industries (AFI)/(KLM) (E&M) signed a strategic partnership agreement with Max Aerospace, aimed at developing a global Maintenance Repair & Overhaul (MRO) network. The two parties plan to open a jointly developed Indian facility.

Air France (AFA) will bring the A380 to its Paris Charles de Gaulle – Washington Dulles (IAD) route on June 6. (IAD) will be (AFA)’s fifth A380 destination and the second A380 destination in the USA besides New York (JFK). The A380 will allow (AFA) to rationalize its frequencies on the route from the current 2x-daily to once daily.

Boeing (TBC) delivered its 200th direct-delivery jetliner to Air France (AFA). The airplane also launches (AFA)’s new business (C)-class seat; it is outfitted with 42 of the 78.74 inch/2 m - long lie-flat seat beds that include 15-inch/38cm In-flight Entertainment (IFE) screens. The 383-seat, (GE90-115B)-powered 777-300ER will operate its first commercial flight December 20 and will be used on (AFA)'s Paris - Montreal service, as well as on Paris - Ho Chi Minh City beginning in January. "The 777 is the backbone of our long-haul fleet," (AFA) (CCO) Bruno Matheu said. "This new airplane will support Air France (AFA)'s projected growth on long-haul destinations and confirm the (AFA)/(KLM) Group's European leadership position on the international network." (AFA) will be operating a total of 61 777s for the 2011 summer season, and is scheduled to take delivery of one 777F in 2011 and 11 777-300ERs through 2015.

The new 777-300ER has been delivered to Air France (AFA) with (AFA)'s new 'Affaires' business class (C) seat and in-flight entertainment (IFE) system as well as new features in all three cabins.

With a fixed shell to preserve passengers' privacy, (AFA)'s new business class (C) seat reclines into a 6.6 ft bed and boasts a Panasonic Avionics in-flight entertainment (IFE) system with a 15 inch wide screen. The (IFE) platform was "specially developed for (AFA) by Panasonic", and allows passengers to download programs - an exclusive (AFA) service - read audio, photos and videos files on a USB key, and consult and modify work documents such as Word, Excel and PowerPoint files, says (AFA).

It is also possible to join (AFA)'s frequent flyer program on board by entering contact details in the specially developed interface. "The use of new technologies enables (AFA) to offer a better picture quality. In all cabins, wider touch-sensitive screens are now in 16:9 format and have a faster response time," says (AFA). (AFA) has also introduced two other new (IFE) features - customers can now access an interactive meal service menu and can also download recipes and take part in a discussion forum, where they can exchange with other passengers on the flight.

Additionally, (AFA) has introduced new bars in all cabins with fridge/freezer display cabinets where passengers can help themselves to drinks and ice cream depending on the flight duration. In the cabin, a new color scheme "creates a calm, cozy and bright atmosphere, enhancing the overall luminosity and the comfort of passengers", says (AFA). Marking the 200th Boeing (TBC) airplane delivered to (AFA), the 383-seat 777 operated its first commercial flight on 20 December, and has been assigned to fly the new nonstop Paris - Ho Chi Minh City route starting in January 2011. "With this new aircraft, (AFA) is continuing to modernize its fleet, one of the youngest in Europe and is inaugurating its new business class product," says (AFA) CMO, Bruno Matheu.

(AFA) has orders for over a dozen more 777-300ERs.

777-328ER (35544, F-GZNH), delivery.

See video "VISIT SOUTH OF FRANCE NICE CANNES" - -

January 2011: SEE ATTACHED "AFA-2011-01-2010 WORLD TOP TRAFFIC."

Air France (AFA) will launch 4x-weekly A320, Paris Charles de Gaulle - Tripoli service March 29, becoming 5x-weekly on June 6. (KLM) already operates Tripoli service from Amsterdam, giving the combined airline 11 weekly frequencies for customers to choose. (AFA) is now offering service to Cologne in Germany from Paris (CDG) with 2x-daily, ATR flights operated by regional partner Airlinair.

By some measures, China’s economy is now the world’s second largest. And if it continues to grow by +10% a year (admittedly a big if), it won’t be long before it surpasses the USA. Just as interestingly, growth is spreading beyond the largest cities and into secondary markets that airlines in Europe are only beginning to exploit. (KLM)’s latest market is Xiamen, located across the Straits from Taiwan. The city is already among China’s wealthiest and happens to be a popular tourism destination as well. It’s also part of Fujian province, home to a large number of people who travel overseas for work (most Chinese restaurants in the USA and Europe are owned by Fujian natives). (KLM), which also serves Hangzhou and Chengdu from Amsterdam, will start the Xiamen flights in March with 777-200ERs. Sometime later this year, Air France (AFA) will follow with Paris flights to Wuhan, a city along the Yangtze river. One reason for being so aggressive in secondary Chinese markets is Air France (AFA)/(KLM)’s close cooperation with China Southern Airlines (GUN) and, soon, China Eastern Airlines (CEA). In fact, the carriers are looking to form more joint venture (JV) routes in which revenues are shared.

February 2011: Air France (AFA)/(KLM) flew 16.63 billion (RPK)s in January, up +4.8% from the year-ago month. Capacity rose +3.3% to 21.00 billion (ASK)s and load factor jumped +1.1 points to 79.2% LF.

The Air France (AFA) - (KLM) Group reported a -€45 million/-$61.5 million net loss for its fiscal third quarter ended December 31, narrowed from a -€294 million deficit in the year-ago period, and warned that its operating profit for its full fiscal year ending March 31 will miss previous guidance.

(AFA) - (KLM) said "numerous one-off events" throughout Fiscal Year (FY) 2010 - 2011 have dragged down earnings. The December quarter "was strongly disrupted by numerous air traffic control (ATC) strikes in France as well as heavy snowfall," it stated, adding that poor winter weather in the USA in recent weeks and "the emergence of security issues in a number of (AFA) - (KLM) destinations," including unrest in Tunisia and Egypt, are among the issues that "will have negative repercussions on the quality of unit revenues" in the March quarter.

Further, it said, "the overcapacity situation created by the increase in offer by our competitors during the winter season" has hurt unit revenue performance in January and February. "In this context, we maintain an objective of a positive operating result for full year 2010 - 2011, but it will be below our previous target of over >€300 million," (AFA) - (KLM) cautioned.

But it emphasized that unexpected occurrences, such as the volcanic-ash crisis in Europe last April, poor weather, (ATC) strikes and "geopolitical events do not call into question the structural recovery achieved by the group in 2010; the improvement in ex-fuel cost is in line with our forecasts, our ability to adapt the network to geopolitical constraints remains, and current forward bookings from mid-March and subsequent months are of good quality."

Fiscal third-quarter revenue lifted +13.9% to €5.92 billion, while expenses grew +14.4% to €3.56 billion, including a +28.2% jump in airplane fuel costs to €1.35 billion. Operating income was reported at +€81 million, reversed from a -€245 million operating loss in the year-prior period. Traffic for the quarter heightened +3.1% to 50.75 billion (RPK)s on a +1.6% lift in capacity to 62.38 billion (ASK)s, producing a load factor of 81.4% LF, up +1.2 points. Passenger yield improved +9.4% to €0.085 as (PRASK) rose +11% to €0.069 and (CASK) increased +5.5% to €0.068.

Revenue generated by (AFA) - (KLM)'s cargo business leaped +27.7% year-over-year in the quarter to €830 million. Cargo traffic increased +4.9% to 2.99 billion (RTK)s on a +3.8% boost in capacity to 4.24 billion (ATK)s, producing a load factor of 70.4% LF, up +0.7 point. Cargo yield improved +20.7% to €0.264.

For the nine months ended December 31, net income totaled +€979 million, improved from an -€867 million euro loss in the year-ago period. Operating revenue was €18.29 billion, up +14.5%.

Paris provides Air France (AFA)/(KLM) with a wealthy catchment area of about 25 million people, huge volumes of inbound tourists and large amounts of business, government, migrant, and even outbound energy-sector traffic — - "Total," one of the world’s largest oil companies, is based in Paris. True, having airport operations split between Paris Charles de Gaulle and Orly isn’t ideal, but no other large airports lie within a 300 km radius. And true, the French economy hasn’t been a growth dynamo in recent years, but it’s still the world’s fifth largest, with strong international trade links. France, unlike Germany, is also a highly centralized country, with Paris accounting for a large portion of the country’s population, commerce and government.

All of this enabled (AFA)/(KLM) to create what’s already one of the world’s most comprehensive global airline networks, with Paris and
Amsterdam at the center. And it also provides an ample platform upon which to execute management’s grand strategy of alliance formation,
becoming essentially one airline with Delta (DAL) and Alitalia (ALI) across the Atlantic, while pursuing other joint ventures (JV)s in China and elsewhere. It’s more modestly linking with other fellow SkyTeam (STM) alliance members, creating more growth opportunities still. This summer, Air France (AFA) will launch flights to Orlando and Lima from Paris, with Wuhan in China to follow. And it’s rolling out A380s to Montreal and Washington.

The United Arab Emirates (UAE) General Civil Aviation Authority and France’s Civil Aviation Authority reached a new bilateral agreement, allowing for a +63% increase in the number of flights operated between the two countries.

The designated airlines of each side won the right to operate up to 57 weekly passenger frequencies combined, +22 more than at present. Furthermore, in addition to Paris, Nice, Lyon, Marseille, and Toulouse, both delegations agreed to add Bordeaux as a sixth point of destination in France, according to the (UAE)’s state news agency "WAM."

The (UAE) designated Air Arabia (ABZ), in addition to Emirates Airline (EAD) and Etihad Airways (EHD), as a (UAE) national airline under the signed Memo of Understanding (MOU). The additional flight rights will be phased in between now and 2014.

Air France Industries (AFI)/(KLM) Engineering & Maintenance (E&M) signed an agreement with Air New Zealand (ANZ) expanding its 777 Component Services Program (CSP) to cover support for common parts for (ANZ)’s 777-300ERs. The (CSP) previously covered only its 777-200ER fleet. The 777 (CSP) program is offered jointly by Boeing (TBC) and (AFI)/(KLM) (E&M).

(AFI)/(KLM) (E&M) signed a five-year (APU) overhaul and repair contract with Gazpromavia Aviation covering its three 737NGs. The work will be carried out by subsidiary (EPCOR BV).

March 2011: Air France will launch service from Paris Charles de Gaulle to Orlando International (thrice weekly, on June 11) and Lima (five-times-weekly, on June 21).

Air France Industries (AFI)/(KLM) (E&M) won a long-term contract with Philippine Airlines (PAL) covering maintenance and engineering support of its (GE90) engines. The contract also covers on-site and on-wing maintenance, shop visits, component support, spare engines and Engineering support for (PAL)’s 777ERs.

April 2011: INCDT: Two jets involved in a fender bender at New York City's John F Kennedy Airport will be inspected to determine the extent of their damage. Air France (AFA) Flight 7, an A380 bound for Paris, was taxiing on a runway when its left wingtip clipped the tail of a Comair (COI) commuter jet CRJ700 and spun it nearly 90 degrees. (COI) Flight 6293 had just landed from Boston.

Federal Aviation Administration (FAA) spokesman Jim Peters says there were no injuries. He said both jets were towed away and will be inspected.

Air France (AFA) said 495 people and 25 (FC) - (CA) crew members were on the A380. The Comair (COI) CRJ700 regional jet was carrying 62 passengers and four crew members ((FC) & (CA)). (COI) operates flights for Delta (DAL).

The USA National Transportation Safety Board (NTSB) is leading the investigation of a wingtip clipping incident that occurred between an (AFA) A380 carrying 510 people and a Bombardier CRJ700 operated by (COI) as a Delta Connection flight while both airplanes were taxiing at New York (JFK). There were no reported injuries, although both airplanes sustained damage and were taken out of service. The incident occurred at 8:25 pm (EST), according to the (NTSB).

The (NTSB) said preliminary reports indicate (AF) Flight 7 was on the runway taxiing into position for departure to Paris when its left wingtip “struck the left horizontal stabilizer of (COI) Flight 293,” which had just arrived from Boston and was taxiing to a gate.

Videotape posted on YouTube appears to show the A380’s wingtip hitting the tail section of the CRJ, which appeared to be stopped, and spinning the airplane and its 56 occupants nearly 90 degrees.

The (NTSB) said it has requested the flight data recorder (FDR) and the cockpit voice recorder (CVR) from both airplanes for review. Also, the (NTSB) said it will review the air traffic control (ATC) tapes and (ASDE-X) ground movement radar data. The damage sustained to both airplanes is still being assessed, the (NTSB) said.

The USA (FAA), Comair (COI) and the Air Line Pilots Association are parties to the investigation, the (NTSB) said, noting that representatives from the French Air Accident Investigation Bureau (BEA), the Transportation Safety Board of Canada and advisors from Airbus (EDS), (AFA) and Bombardier will assist in the investigation.

Air France Industries (AFI)/(KLM) (E&M) was selected by Air Europa (ARE) to modify the full-economy class (Y) of one recently acquired A330 to a dual-class cabin.

Air France (AFA) launched 2x-weekly service from Paris Charles de Gaulle (CDG) to Freetown (FNA), and commenced 2x-weekly, (CDG) - Monrovia (MLW) flights. Both new routes are via Conakry (CKY). (AFA) increased (CDG) - (CKY) service to daily, of which 4x-weekly flights are nonstop and three are via Nouakchott (NKC). Flights to (CKY), (NKC), (FNA) and (MLW) are being operated by an A330-200 with 208 seats in a three-class configuration, including 40C seats in business, 21PY in premium economy and 147Y in economy.

"After the launch of flights to Kigali by (KLM) in October 2010, these two new Air France (AFA) routes and the daily service to Guinea illustrate the confidence (AFA)/(KLM) has in the development of the West African region," (AFA)/(KLM) Senior VP Africa & Middle East, Pierre Descazeaux stated.

(AFA)/(KLM) capacity (ASK)s to/from Africa for its summer schedule are slated to be up +4% over the 2010 summer schedule. The (AFA)/(KLM) group now operates to 38 destinations in Africa.

Two former Air France (AFA)-(KLM) cargo executives were indicted by a federal grand jury in Chicago on charges of conspiring to fix rates and surcharges to and from the USA on airfreight shipments, the USA Department of Justice (DOJ) said.

The indictment charges former Executive VP Cargo, Marc Boudier and former VP Cargo Sales & Marketing, Jean Charles Foucault, with “conspiring with other air cargo carriers and their officials to suppress and restrain competition for international air cargo services,” according to the (DOJ). The charges, which are in violation of the Sherman Act, carry a maximum penalty of 10 years in prison and a $1 million fine, said the (DOJ), which noted Boudier and Foucault participated in the conspiracy “from at least as early as August 2004 until at least February 2006.”

To date, a total of 21 airlines and 21 executives have been charged in the (DOJ)’s ongoing investigation into price fixing in the air transportation industry.

(AFA) put its 60th 777 into service. 777s make up over half of its long-haul fleet, which also comprises 13 747s, 15 A330s, 16 A340s and four A380s.

The German Leasing Company (its company name) took delivery of Air France (AFA)'s fifth A380, which (AFA) will operate on the Paris Charles de Gaulle - Montreal route. The leasing company has financed seven A380s, four 777s and two A319s, representing a total volume of €1.68 billion/$2.43 billion.

See video on Monte Carlo, Monaco narrated by Piers Morgan - -

May 2011: The Air France (AFA)/(KLM) Group reported a profit for the fiscal year ended March 31 of +€613 million/+$873.5 million, reversed from a -€1.6 billion deficit in its 2009 - 2010 fiscal year, citing a “more favorable economic environment” and cost-cutting controls for the turnaround. Annual results benefitted from a +€1.04 billion gain on its Amadeus shares, partly offset by a €127 million provision related to investigations into cargo price-fixing. (AFA)/(KLM) said that restated for non-recurring items, (AFA)/(KLM) had an annual loss of -€234 million versus a loss of -€1.23 billion on a similar basis in the 2009 to 2010 fiscal year.

Full-year revenue was €23.61 billion, up +12.5%, while operating costs rose +5.4% to €23.49 billion. Its operating result was +€122 million, reversing a -€1.29 billion loss in the prior year. “We have seen a contrasted year, with on the one hand a more favorable economic environment, but on the other a number of exceptional events affecting our operations,” said (CEO), Pierre-Henri Gourgeon. “Nevertheless, the strategic actions launched last year enabled us to return to profit in spite of a €1 billion rise in our fuel bill and the impact of the various crises.” Gourgeon said the "improvement of some €1.4 billion in our operating result required a significant mobilization by all the group’s employees.”

For its fiscal fourth-quarter ended March 31, (AFA)/(KLM) reported a -€367 million net loss, narrowed from a -€691 million deficit in the year-ago period. (AFA) said the quarter was affected by the earthquake in Japan, as well as the deepening political crises in the Middle East and Africa.

Fourth-quarter revenue lifted +6% to €5.33 billion, while operating loss was trimmed to -€403 million, from a -€497 million loss in the year-ago quarter. Total cargo business revenues rose +14.1% to €769 million and operating loss was reduced to -€9 million from -€63 million. For the full year, cargo revenues jumped +29.5% to €3.16 billion and the unit posted an operating profit of +€69 million, reversing an operating loss of -€436 million the year before.

Looking forward, Gourgeon said, “Despite the economic recovery, a number of uncertainties prevail, notably the longer term impact of the earthquake in Japan and the crises in the Middle East and Africa on the economies of those regions, where we have an important presence, as well as the fuel price.” However, he said (AFA)/(KLM) is “confident in our ability to improve our operating result in 2011, and we main focused on our longer term objectives, notably a dividend in respect of financial year 2010 - 2011.”

(AFA)/(KLM) also announced that the board of directors will propose changing its accounting year to a calendar year at the July annual general meeting "in line with the majority of airline companies." If the measure is approved, the 2011 fiscal year will be of only nine months duration (April 1 - December 31).

SkyTeam (STM) Alliance members: Delta Air Lines (DAL), Air France (AFA)/(KLM) and Alitalia (ALI) announced they will reduce transatlantic capacity between Europe and the USA plus Canada offered through their joint venture by -7% to -9% this fall in response to significantly higher fuel prices "and fluctuating seasonal demand."

ACCDT: Recovery of black boxes from Air France (AFA) A330-200 loss in the Atlantic in June 2009 and information obtained revealed the following:
Pilots wrestled with the controls of an the A330 for more than four minutes before it plunged into the Atlantic with its nose up, killing all 228 people on board, French investigators reported.

The 2009 emergency began with a stall warning two and a half hours into the Rio de Janeiro - Paris flight and nine minutes after the captain (FC) had left the cockpit for a routine rest period.

The A330 jet had climbed to 38,000 feet and then began a dramatic three and a half minute descent, rolling from left to right, with the youngest of three pilots (FC) handing control to the second most senior pilot (FC) one minute before the crash.

The timeline was described in a note by France’s (BEA) crash investigation authority, which said it was too early to give the causes of the crash ahead of a fuller report in the summer. “These are so far just observations, not an understanding of the events,” (BEA) Director, Jean-Paul Troadec said.

The captain (FC) returned after “several attempts” to call him back to the cockpit but was not at the controls in the final moments, according to information gleaned from black boxes. By the time the 58-year-old pilot (FC) returned, just over a minute into the emergency, the A330 was plunging at 10,000 feet a minute with its nose pointing up 15 degrees and at too high an angle compared to the onrushing air to provide lift.

The (BEA) said the reading of black boxes hauled up from the Atlantic floor earlier this month suggested the crew were not able to determine how fast the plane was flying. That echoes earlier findings which suggest the pitot tubes or speed sensors on the plane may have become iced up. It also said that the flight crew (FC) mainly responded to stall warnings by attempting to lift the nose of the plane, without elaborating.

Experts say pilots (FC) typically push the stick forward to cope with a stall to close the angle with the air and regain lift.

SEE ATTACHED - - "AFA-2011-05-A330 ACCDT 2009-06."

July 2011: As part of a new Air France (AFA) strategy to give no-frills low cost carriers (LCC)s a run for their money and regain some of the market share lost to lower cost rivals, (AFA) released details of its revised business model that includes deploying A320s from several regional bases on point-to-point short- and medium-haul routes.

In the long term, (AFA) intends to increase seat capacity more than >+30% by launching 54 nonstop routes from Marseille (MRS), Toulouse, Nice, and Bordeaux to major cities in Europe and the Mediterranean, as well as by increasing capacity on domestic routes. On “all flights,” passengers will benefit from the standard “free” (AFA) services on its medium-haul network, including one piece of checked baggage, a choice of daily newspapers at boarding, a snack, and a choice of seat and payment by credit card at no extra charge, (AFA) said.

“With this new project involving all its employees in France, Europe, and the Mediterranean, (AFA) intends to initiate a virtuous circle that will enable its medium-haul operations to regain profitable growth, the foundation of the (AFA)-(KLM) group's strategy, while offering customers attractive fares and ensuring long-term employment,” said (AFA)-(KLM) (CEO), Pierre-Henri Gourgeon.

The first base at (MRS) will launch October 2 and Toulouse (TLS), Bordeaux (BOD) and Nice (NCE) will follow in spring 2012. (MRS) used to be a thriving Ryanair (RYR) base and, although it closed the base in January over a legal dispute with the French government over taxes and social security charges, it still is the largest user of the airport’s (LCC) terminal (MP2) with 26 routes. Vueling (VUZ) recently opened a base at (TLS); easyJet (EZY) operates some 16 routes from (NCE) and a wide network from (BOD).

(AFA) has been working on this new regional approach for a while and securing an agreement with its flight crew (FC) was the largest stumbling block, but this month the powerful (AFA) (SNPL) pilot union announced that 54.4% of its members had voted to approve the project. (AFA) said that implementing this new strategy—based on achieving a “significant” reduction in operational costs of around -15% — will be achieved by using a single airplane type (A320 with between 142 and 178 seats) and an optimized daily airplane utilization, with departures earlier in the morning and return flights later in the evening, as well as turnaround times reduced by five minutes at out-stations. Other cost reductions will come from flight crews (FC) based in the provinces and optimized use of human and material resources on the ground throughout the day.

(AFA) will launch 13 nonstop routes from (MRS), increasing seat capacity +50%. New routes on October 2nd include Basel Mulhouse, Biarritz, Brest, Athens, Copenhagen, Dusseldorf, Eindhoven, Milan-Malpensa, Moscow, and Prague, Beirut, Istanbul, and Casablanca. (AFA) expects the base will result in 1.3 million additional passengers per year to and from (MRS).

August 2011: Air France (AFA) has given up plans for a new domestic low-cost carrier (LCC) but is now planning to set-up several regional bases with A320 family airplanes and point to point services to be able to compete with (LCC)s operating in France. Marseilles will be its first regional base with Nice and Toulouse expected to be the next two bases for the new operation. It will transfer its Paris (CDG) - Chicago O’Hare route to joint venture (JV) and alliance partner Delta Air Lines (DAL) on October 29. Service from Paris Orly to Southampton was replaced by a FlyBe (BEE) code share on October 31, from Rotterdam to Hamburg Fuhlsbüttel on November 19, from Lyon to Le Havre on February 27, and from Strasbourg to Copenhagen Kastrup on March 26. (AFA) had temporarily operated a daily service linking Toulouse and Hamburg Fuhlsbüttel between November 2010 and March 2011 and will not resume seasonal services from Basle/Mulhouse to Calvi and from Lourdes/Tarbes to Figari. Other services were:
Marseilles - Athens: 4x weekly, A319-100/A320-200 service starting on October 2;
Marseilles - Basle/Mulhouse: daily, A319-100 service starting on October 2;
Marseilles - Beirut: 3x weekly A320-200 service starting on October 2;
Marseilles - Biarritz: 2x weekly A320-200 service starting on October 2;
Marseilles - Brest: daily A319-100 service starting on October 2;
Marseilles - Casablanca: 4x weekly A319-100/A320-200 service starting on October 2;
Marseilles - Copenhagen Kastrup: 2x weekly A319-100/A320-200 service starting on October 2;
Marseilles - Dusseldorf International: daily A319-100/A320-200 service starting on October 2;
Marseilles - Eindhoven: 3x weekly A320-200 service starting on October 4;
Marseilles - Istanbul Atatürk: 4x weekly A320-200 service starting on October 2;
Marseilles - Milan Malpensa: 2x daily A319-100/A320-200 service starting on October 2;
Marseilles - Moscow Sheremetyevo: 4x weekly A320-200 service starting on October 3;
Marseilles - Prague: 2x weekly A319-100/A320-200 service starting on October 5;
Paris (CDG) - Bangkok Suvarnabhumi - Phnom Penh: 3x weekly 777-200ER service started on March 27;
Paris (CDG) - Cancun: 3x weekly 777-300ER service starting on October 21;
Paris (CDG) - Cape Town: 3x weekly 777-200ER service starting on October 31;
Paris (CDG) - Conakry - Freetown: 2x weekly A330-200 service started on April 19;
Paris (CDG) - Conakry - Monrovia: 2x weekly A330-200 service started on April 20;
Paris (CDG) - Fort de France: weekly 777-300ER service starting on November 5 (in addition to services from Orly);
Paris (CDG) - Jeddah - Djibouti: 3x weekly A330-200 service started on November 29, 2010 (replacing non-stops to both destinations);
Paris (CDG) - Lima: 5x weekly 777-200ER service started on June 21;
Paris (CDG) - Nouakchott - Conakry: 3x weekly A330-200 service started on April 18 (new routing);
Paris (CDG) - Orlando International: 3x weekly 777-300ER service started on June 16;
Paris (CDG) - Pointe à Pitre: weekly 777-300ER service starting on November 6 (in addition to services from Orly).

(AFA) has added a technical stop in Beirut on the outbound flights to Damascus that it now only serves three times weekly allowing its crews to stay in Lebanon because of the political situation in Syria. Ahead of Saudi Arabian Airlines (SVA) joining the Skyteam (STM) alliance, (AFA) has already started code sharing with (SVA) on services from Paris (CDG) to both Jeddah and Riyadh served by both airlines. In addition, (AFA) is now also code sharing with Rossiya (SDM) on the Paris (CDG) - St Petersburg route served by both (AFA) and (SDM) as well as with AZAL Azerbaijan Airlines (AHY) on the Paris (CDG)- Baku services operated by (AHY).

(AFA), British Midland (BMA) and Spanair (SPP) have not launched its previously announced Paris (CDG) - Tripoli, London Heathrow - Tripoli and Barcelona - Tripoli services. All other services by European carriers to Tripoli remain suspended until further notice. The Libyan capital had been served by Air Malta (MLT) from Malta, Alitalia ((ALI) from Rome Fiumicino, Austrian Airlines (AUL) from Vienna, British Airways (BAB) from London Heathrow, Bulgaria Air (LZB) from Sofia, Jat Airways (JAT) from Belgrade, (KLM) Royal Dutch Airlines from Amsterdam, Lufthansa (DLH) from Frankfurt International and Turkish Airlines (THY) from Istanbul Atatürk. (THY) also has suspended its Istanbul Atatürk - Benghazi route.

(AFA) has announced plans to retire its last 747-400s by 2016.

September 2011: The AirFrance (AFA) - (KLM) Group and (AFA) (CEO), Pierre-Henri Gourgeon met with trade unions to discuss potential new cost savings in light of the uncertain economic outlook. (AFA) stressed that no specific numeric target had been discussed.

The group increased the target of its "Challenge 12" cost-savings program from -€470 million/-$664.1 million to -€500 million for the current financial year after reporting a net loss of -€197 million during the first quarter ended June 30. It also said it would lower scheduled growth of its long-haul network for the winter 2011 - 2012 schedule from +5.1% to +2.7%. The Challenge 12 hiring freeze will be extended until 2014, mainly affecting the hiring of interns and temporary workers.

“Given the current instability of the financial markets and the very uncertain economic outlook, union representatives were reminded of the need to implement the measures announced end July [at the presentation of the group’s first-quarter results],” spokeswoman, Brigitte Barrand said. She added that unions were informed there “might be a need for additional cost savings.” Details would be presented to unions next month.

The (AFA) - (KLM) Group stated it plans to order 25 787-9s and 25 A350-900s. List-price value of the Boeing (TBC) order is $5.5 billion which Avitas assumes discounts will bring it to around $3.2 billion. List-price of the Airbus (EDS) order is $6.7 billion with the Avitas estimate as $3.2 billion.

Delivery of the wide body airplanes will begin in 2016. There are also options for 60 airplanes; with expectations to take at least 23 of these by 2024.

October 2011: Pierre-Henri Gourgeon stepped down as (CEO) of the AirFrance (AFA)/(KLM) Group and (CEO) of Air France (AF) following a board meeting in Paris.

Former (AFA) Chairman & (CEO), Jean Cyril Spinetta and former (KLM) President & (CEO), Leo Van Wijk were reappointed as Chairman and (CEO) of the (AFA)/(KLM) Group and group Deputy (CEO), respectively. They will be in charge of its “strategic coordination,” (AFA) said. The two men masterminded Europe’s first merger between the two flag carriers in 2004.

Alexandre de Juniac, who previously was chief of staff to the former French Finance Minister, Christine Lagarde until her recent appointment to run the International Monetary Fund, replaces Gourgeon as (AFA) Chairman & (CEO).

The management reshuffle reflects board and analyst concerns over the poor financial performance of the group (particularly (AFA)) since Gourgeon took over from Spinetta in January 2009 as Group & (AFA) CEO. Spinetta, who turned 70 earlier this month, remained active as Chairman of (AFA)/(KLM).

Concern about pilot (FC) training procedures following the fatal (AFA) A330 flight 447 crash over the Atlantic in June 2009 was also a factor, according to insiders. In a statement titled “Governance,” (AFA)/(KLM) said its board had “determined the orientations in relation to the organization and governance of AirFrance (AFA) and of the AirFrance (KLM) Group, as well as to the appointment of its senior executives. The aim is to improve the group's operating and financial performance in a context of economic uncertainties affecting the European air traffic, as well as the position of AirFrance in respect of increased competition from new entrants.”

Gourgeon was slated to stay in the role until January 2013 after his mandate was renewed for a second term this summer. In past months, French media reported that he would be replaced in January as (AFA) CEO and in 2013 as Group CEO. But his position weakened after a declining profit outlook.

De Juniac was an executive with Thales (THL) for more than a decade before joining Lagarde’s staff. (AFA)/(KLM) also said that it was deferring the set up of a full-dedicated (AFA)/(KLM) holding, from early 2012 to 2013 because “top priority” must be given to the recovery and improvement of the performances of (AFA) and (KLM).

AirFrance (AFA) launched its much-discussed provincial base strategy, a plan to defend against Low Cost Carriers (LCC)s like easyJet (EZY) and Vueling (VUZ). Thirteen new routes from Marseilles are now under way, with (LCC)-free cities like Moscow, Beirut and Istanbul among the destinations. The service level for these flights is the normal (AFA) shorthaul standard (free advance seat assignments, for example) but fares are lower thanks to new approaches to lowering unit costs, including greater airplane and crew productivity. The base concept will spread to Nice, Toulouse and Bordeaux next year, and to Paris Orly and Lyon after that, if it proves successful.

The new base project means AirFrance (AFA)/(KLM)’s intra-European (ASK) capacity will be up +6% (y/y) this winter. Its longhaul network, meanwhile, will be up just +3% after several recent revisions. On the (AFA) side, total winter (ASK)s are to grow +5%, in part driven by larger airplanes like A380s (which are being retrofitted with premium economy (PY) sections) and seat densification on some 777s. A new route from Paris to Cancun starts later this month as previously announced, part of a bullish +17% expansion to Latin America (Caracas and Santiago, for example, will see additional frequencies). In Africa, capacity (ASK)s will be up +6%, led by new Paris nonstops to Cape Town, a market that peaks in the winter. And Middle Eastern capacity will be down -7% due to pullbacks in Cairo, Beirut, Amman, and Damascus. On the (KLM) side, longhaul growth is more aggressive with a return to Buenos Aires and Rio de Janeiro from Amsterdam and new nonstops to Havana, Punta Cana and Luanda. (KLM)'s also expanding in Switzerland and Germany closer to home but suspending flights to Dallas (DFW) for the winter. (KLM) believes it can support its new longhaul flights thanks to Amsterdam schedule adjustments that should optimize connecting opportunities.

(AFA)-KLM says that its provisional fleet plan will see the group operating 73 new wide bodies through to 2024, including 43 A350-900s and 30 787-9s. The first 787-9 is due to enter into service with (KLM) in 2016 and the first A350-900 with (AFA) in 2018. Both airlines will eventually operate both types.

Quantum Control was selected by AirFrance Industries (AFI)/(KLM) Engineering and Maintenance to further support its Total Component Care program. (AFI) subsidiary, (EPCOR) has been managing its airplane services business using Quantum Control for over six years.

November 2011: The Air France (AFA)/(KLM) Group reported a net profit of +€14 million/+$19.2 million for the quarter ended September 30, down -95.2% from net income of +€290 million in the year-ago quarter, due mainly to foreign exchange losses and a decline in the fair value of hedging instruments.

Chairman & (CEO), Jean-Cyril Spinetta said the group’s “insufficient profitability in recent quarters, in an economic environment affected by the weak global demand and high oil prices, shows that we need to go further” despite the “many measures” pursued over the last three years.

(AFA)/(KLM) last month announced a shakeup of its top management, which included the return of Spinetta as group (CEO) and (AFA) (CEO). Spinetta said the new management will focus on three priorities: a “rapid” reduction of the company’s -€6.5 billion net debt, additional cost savings, and the restructuring of its short- and medium-haul business. He declined to go into detail and said an action plan will be presented during the first quarter of 2012.

Operating revenue climbed +2.1% to €6.79 billion in the quarter, while expenses heightened +5.3% to €6.39 billion owing mainly to soaring fuel costs. Excluding fuel, total operating costs rose +2.3% for a +4.9% increase in (EASK)s (equivalent (ASK)s, which weighs in both passenger and cargo operations). Operating income fell -31.1% to €397 million.

The group’s passenger business delivered a positive operating result of +€356 million for the quarter on a +2.9% increase in revenue to €5.2 billion. Passenger traffic rose +7.9% on a +6.2% hike in capacity, producing a load factor of 86.1% LF, up +1.3 point on the year-ago quarter. The cargo business posted an operating loss of -€37 million.

Aerolíneas Argentinas (ARG) signed code share agreements with AirFrance (AFA) and (KLM), under which (AFA) and (KLM) will place their codes on (ARG) service to Cordoba, Mendoza, Rosario, Montevideo, and Asuncion. (ARG) will place its code on (AFA) and (KLM) service to Nice, Marseille, Toulouse, Lyon, and Bordeaux and other European destinations, including Berlin and Munich.

Air France (AFA) will commence 3x-weekly scheduled service between Paris-Charles de Gaulle and Wuhan Tianhe on April 11, 2012. (AFA) will use a 777-200ER configured with 309 seats, comprising 35C in business, 24PY in premium economy and 250Y in economy.

(AFA) is the first airline to offer direct flights between Europe and Wuhan. The new route further strengthens the (AFA)/(KLM) Group’s position as the leading airline group between Europe and China. In the winter schedule, (AFA)/(KLM) is operating 80 flights a week to eight destinations in Greater China (Beijing, Shanghai, Guangzhou, Hong Kong, Chengdu, Hangzhou, Xiamen), and Taipei.

It also operates 31 flights weekly under code share agreements with its China Eastern (CEA) and China Southern (GUN) partners.

Air France (AFA) has appointed Alexandre de Juniac as Chairman & (CEO), effective immediately. Jean-Cyril Spinetta, Chairman & (CEO) of the (AFA)/(KLM) Group, has resigned from his position as Chairman & (CEO) of (AFA), which he held temporarily from October 17.

Juniac, previously Chief of Staff to the former French Finance Minister, Christine Lagarde until her recent appointment to run the International Monetary Fund (IMF), replaces (AFA) Chairman & (CEO), Pierre-Henri Gourgeon, who stepped down in October.

AirFrance (AFA) will start operating A380 airplanes on a daily Paris Charles de Gaulle (CDG) to Dubai (DXB) route on December 5, and on a 2x-daily (CDG) to Los Angeles (LAX) route on May 28, 2012.

The (CDG) - (DXB) service will be a seasonal A380 route, made possible by the airplane’s redeployment from Tokyo Narita to (DXB) for the winter season, resulting from lower seasonal demand to Tokyo, (AFA) said. The (CDG) - (LAX) route is part of the transatlantic joint venture operated by (AFA)/(KLM), Alitalia (ALI) and Delta Air Lines (DAL).

(AFA) said it will operate six A380s in the current winter schedule on five routes ((CDG) to New York (JFK), Johannesburg, Montreal, Washington Dulles and (DXB)) and eight A380s in the next summer schedule to six destinations ((LAX), (JFK), Johannesburg, Tokyo, Montreal, and Washington).

Emirates (EAD) and AirFrance Industries (AFI)/(KLM) E&M have signed a five-year nonexclusive agreement for component services, and a general terms agreement, on its 777 and A330/A340 fleets.

Royal Jordanian (RJA) has selected AirFrance Industries (AFI)/(KLM) Engineering & Maintenance to provide component support for its three A330 passenger jets. The contract includes repairs and access to the spares pool as part of a per-flight-hour contract.

December 2011: AirFrance (AFA) will open bases in Toulouse (TLS), Nice (NCE) and Bordeaux (BOD) in 2012, as it tries to regain the market share from low-cost carriers (LCC). The (TLS) and (NCE) bases will open in April; (BOD) will follow later in the year.

The announcement of the base openings follows the launch of (AFA)’s first regional base in Marseille (MRS) in October with 13 new nonstop routes and increased capacity on existing domestic routes.

(AFA)’s regional strategy is to combine the best operating practices of (LCC)s with its own service approach, while keeping fares restrained. (AFA) also hopes to reduce operating costs by about -15% by basing airplanes, pilots (FC) and cabin crew (CA) at the regional airports and increasing airplane and crew productivity.

(AFA) will launch 16 new destinations in Europe and the Mediterranean to/from (TLS) April 1, including Athens, Brussels, Geneva, Hamburg, Istanbul, Prague, Tunis,Malta, Naples, Venice, Casablanca, and Marrakesh plus Morocco. This brings to 28 the number of routes it will operate from (TLS) and more than >430 weekly flights.

(AFA) will launch 6X-weekly, Toulouse - Brussels A320 service on June 3.

On April 3, (AFA) will expand its network from (NCE) with six new destinations: Athens, Istanbul, Naples, Tel Aviv, Venice, and Barcelona, while growing its offerings from (NCE) to 330 weekly flights on 22 routes.

By the summer of 2012, (AFA) will operate more than >1,200 weekly flights combined from (MRS), (TLS) and (NCE).

EasyJet (EZY) in October also announced plans to make (NCE) and (TLS) new bases from the summer of 2012, with two airplanes at each airport. (EZY) is France’s second largest carrier in terms of passengers carried. Vueling (VUZ) opened a base at (TLS) with one 180-seat A320 in April.

January 2012: AirFrance employed 58,065 (3rd highest in the world!).

The AirFrance (AFA)/(KLM) Group revealed its three-year “transformation plan” to bring the company back to profitability by cutting costs immediately by -€1 billion/-$1.27 billion and rapidly reducing debt by -€2 billion to €4.5 billion by the end of 2014.

The group said it will increase capacity by a little over +5% on a cumulative basis.

At (AFA), the plan includes freezing pay raises in 2012 and 2013. At (KLM), plans include moderating wages, freezing new hires, implementing additional productivity measures, reducing overhead costs and making changes to the network. Negotiations with social partners are on-going.

The plan, which was initially outlined in November, builds on three priorities: restoring competitiveness through cost-cutting; restructuring the short- and medium-haul operations; and rapidly reducing debt.

The company disclosed that in 2011 its short- and medium-haul network losses were around -€700 million. “The long-haul operations, also subject to increasing competition, cannot alone offset these losses,” (AFA)/(KLM) said.

The company wants to restore its medium-haul business to breakeven by 2014 through a better utilization rate of airplanes and assets. It also wants to “significantly” improve productivity in all employee categories and extensively outsource some activities. It did not provide more detailed information but stressed its short- and medium-haul network remains “indispensable” to the group’s development.

The quasi-stable capacity growth between 2012 and 2014, affecting both passenger and cargo operations, will lead to a reduction of its fleet and, consequently, its investment program, from more than €6 billion between 2009 - 2011 to below €5 billion over the next three years. Airplane deliveries will be deferred and options will not be exercised without detailing which orders will be affected, it said. The investment reduction will not affect ongoing operational safety and customer service programs.

The statement did not mention layoff plans, although it is widely expected that job cuts, mainly at (AFA), will be announced after the upcoming French presidential elections.

For the six months ended September 30, 2011, the group posted a net loss of -€183 million, reversed from a +€1.03 billion net profit in the year-ago period when earnings benefitted from a +€1.03 billion gain from the sale of part of its holding in Amadeus.

(AFA) has completed the installation of its premium economy (PY) cabin on six A380s, extending the new intermediate class on almost all of its long-haul fleet and network covering 67 destinations.

(AFA) started rolling out the premium economy (PY) cabin in the fall of 2009. All of its A330s, A340s, A380s and most of its 777s (except those serving the French overseas territories with high-density seating configuration) are now retrofitted.

(AFA)'s premium economy (PY) is a separate cabin located between the economy-(Y) and business-class (C) cabins, with fixed-shell seats that recline to 123 degrees, have a 38 inch pitch and an individual video screen offering 500 hours of programs on demand. The meal service is the same as in economy (Y) but passengers receive amenities such as noise-reducing headphones, a feather pillow and a wool blanket. On the ground, premium economy (PY) passengers have priority check-in and priority baggage delivery.

AirFrance (AFA) has announced two additional new regional bases in Nice and Toulouse and several other new routes:
Marseilles - Barcelona: 2x weekly A319-100/A320-200 service starting on March 25;
Marseilles - Hamburg Fuhlsbüttel: 4x weekly A319-100/A320-200 service starting on March 25;
Marseilles - Venice Marco Polo: 5x weekly A319-100 service starting on March 25;
Nice - Athens: 3x weekly A319-100/A320-200 service starting on April 3;
Nice - Barcelona: 3x weekly A319-100 service starting on April 5;
Nice - Istanbul Atatürk: 3x weekly A320-200 service starting on April 5;
Nice - Naples: 2x weekly A319-100 service starting on April 9;
Nice - Tel Aviv Ben Gurion: 3x weekly A320-200 service starting on April 4;
Nice - Venice Marco Polo: 3x weekly A319-100 service starting on April 3;
Paris (CDG) - Amman Queen Alia - Damascus: 3x weekly A320-200 service has started on October 31 (replacing non-stops);
Paris (CDG) - Ho Chi Minh City - Phnom Penh: 3x weekly 777-300ER service starting on March 27 (replacing routing via Bangkok Suvarnabhumi);
Paris (CDG) - Wuhan: 3x weekly 777-200ER service starting on April 11;
Toulouse - Athens: 4x weekly A320-200 service starting on April 1;
Toulouse - Berlin Tegel: 4x weekly A319-100/A320-200 service starting on April 1 (will move to Berlin Brandenburg International on June 3);
Toulouse - Brussels National: 5x weekly A319-100 service starting on April 1;
Toulouse - Casablanca: 3x weekly A319-100 service starting on April 2;
Toulouse - Geneva: weekly A319-100 service starting on April 2;
Toulouse - Hamburg Fuhlsbüttel: 5x weekly A319-100/A320-200 service starting on April 2;
Toulouse - Istanbul Atatürk: 3x weekly A320-200 service starting on April 3;
Toulouse - Malaga: 3x weekly A319-100 service starting on April 3;
Toulouse - Malta: 2x weekly A319-100/A320-200 service starting on April 1;
Toulouse - Marrakech: 2x weekly A319-100/A320-200 service starting on April 1;
Toulouse - Naples: 2x weekly A319-100 service starting on April 1;
Toulouse - Prague: 5x weekly A319-100/A320-200 service starting on April 1;
Toulouse - Seville: 4x weekly A319-100 service starting on April 1;
Toulouse - Tunis: 4x weekly A319-100/A320-200 service starting on April 1;
Toulouse - Venice Marco Polo: 3x weekly A319-100 service starting on April 1;
Toulouse - Vienna: 4x weekly A319-100/A320-200 service starting on April 1.

It has terminated its Paris (CDG) -Milan Malpensa services on October 30 in favor of additional daily flights to Milan Linate which it now serves six times daily. On the same date, it has also terminated its Lyon - Florence and Toulouse - Dusseldorf International routes. (AFA) will no longer operate from Paris (CDG) to Abu Dhabi and New York Newark as of March 24, when it will also transfer its Paris (CDG) - Seattle/Tacoma route to Skyteam (STM) Alliance partner, Delta Air Lines (DAL). (AFA) will reportedly become a minority shareholder in Air Côte d’Ivoire that is expected to launch operations in 2012 and replace defunct national carrier Air Ivoire.

Ukraine International Airlines (UKR) recently entered into a code share agreement with AirFrance (AFA) between Kiev and Paris Charles de Gaulle (CDG) to add its code on routes to Dnepropetrovsk, Donetsk, Lvov, Simferopol, and Odessa, and beyond (CDG) to Marseille, Lyon and Nice.

The European Commission (EC) has opened an investigation to assess whether the transatlantic joint venture (JV) between (AFA) - (KLM)), Alitalia (ALI) and Delta Air Lines (DAL) breaches (EU) antitrust rules. “The (EC) will investigate whether the partnership may harm passengers on certain (EU) - USA routes where, in the absence of the joint venture (JV), the parties would be providing competing services.” Under terms of the (JV), concluded in 2009 and 2010, the SkyTeam (STM) Alliance carriers fully coordinate their transatlantic operations with respect to capacity, schedules, pricing and revenue management. They also share profits and losses on their transatlantic flights.

The (EC) noted the investigation is “coherent with the (EC)'s recent enforcement action in relation to the transatlantic (JV)s of the two other airline alliances,” Oneworld (ONW) and Star (SAL) Alliances.

The (EC) formally opened antitrust proceedings into the planned transatlantic (JV) between British Airways (BAB), American Airlines (AAL) and Iberia (IBE) in April 2009. It cleared the (JV) of the three Oneworld (ONW) Alliance airlines in July 2010 after they accepted a series of legally binding commitments to address the (EC)’s competition concerns. The antitrust probe into the transatlantic cooperation between Star (SAL) Alliance members Air Canada (ACN), Lufthansa (DLH), Continental Airlines (CAL) and United Airlines (UAL) was opened in April 2009 and is still ongoing, the (EC) confirmed.

Meanwhile, the (EC) has closed its investigation into cooperation agreements between eight SkyTeam (STM) Alliance members that began in 2006 when the member airlines were Aeromexico (AMX), (AFA), (KLM), (ALI), (CAL), (CSA) Czech Airlines, (DAL), and Korean Air Lines (KAL). (CAL) has since merged with (UAL) and left SkyTeam(STM) Alliance for the Star (SAL) Alliance. “This decision was taken as part of the priority-setting process in light of significant changes in the circumstances on the relevant markets. The closure of proceedings does not, however, relieve the SkyTeam (STM) Alliance members from assessing their behavior and ensuring that they comply with (EU) competition law,” the (EC) said.

Air France Industries (AFI)/(KLM) Engineering & Maintenance has resumed its cooperation with Afriqiyah Airways (AQY) following a hiatus of over a year. The agreement involves pool access and component repairs for (AQY)'s A320 and A330 fleets and includes the maintenance checks on the airplanes.

AirFrance Industries (AFI)/(KLM) (E&M) has signed a contract with Libyan Airlines (LAA) covering component support (pool access and repairs) and maintenance checks for (LAA)’s A320 and ATR42-500 fleets.

(AFI)/(KLM) (E&M) has completed maintenance checks, repainting and modifications on two 737-800s under a contract from Air Lease Corporation (ALE). The airplanes have been delivered to new lessees, Caribbean Airlines (TTA) and Transaero Airlines (TRX).

Amsterdam-based SkyNRG finished 2011 on a high note by partnering with Thai Airways (TII) to conduct what was called “the first passenger biofuels flight in Asia” in late December (Air China (BEJ) flew a biofuel demonstration flight in October without paying passengers). The (TII) flight from Bangkok to Chiang Mai included a 777 with both engines running on a 50-50 fuel mix of bio-jet fuel derived from used cooking oil and conventional petroleum-based jet fuel. As we’ve seen before with these “first” flights, (TII) airline officials said the flight marked the beginning of a collaborative effort to develop a bio-jet fuel supply chain in Thailand. For SkyNRG, which sourced the fuel, this flight followed similar flights
by AirFrance (AFA), Alaska (ASA), Finnair (FIN), (KLM) and Thomson Airways (ATZ)/(TFY), all since July, when bio-jet fuel became standardized.

In their search for commercially viable bio-jet fuel, airlines are leaving no stone unturned in Australia. Lufthansa has signed an agreement with the Perth-based biofuel company Algae.Tec. The plan is to “jointly evaluate the potential” of Algae.Tec’s algae-based crude oil as a low-carbon jet fuel source. Meanwhile, Air New Zealand (ANZ) and Virgin Australia (VOZ) signed similar agreements with the Sydney-based biofuel company Licella, which has technology to convert a range of waste plant material, such as sawdust, corn stalks and sugar cane waste, into bio-jet fuel.

The AirFrance (AFA)/(KLM) Group has finalized an order for 25 787-9s, with options. The order was signed in late December. A preliminary agreement was first announced on September 16.

February 2012: AirFrance (AFA) will reduce its summer seat capacity on North Atlantic routes by -6.5% in co-ordination with its joint venture partners Delta Air Lines (DAL), (KLM) and Alitalia (ALI). It will reduce capacity in (ASK)s by suspending services to Seattle, which will be flown by Delta (DAL), and New York Newark from the beginning of the summer season. The SkyTeam (STM) Alliance carrier will then suspend services to Orlando from September 3. It will also reduce seat capacity on its flights to Miami and Toronto, while maintaining frequencies.

(AFA) will also introduce the A380 on its route to Los Angeles. It will operate seven weekly A380 frequencies and eight 777-200 frequencies instead of the 20 frequencies it operated last summer using 777-200s and 777-300s.

AirFrance (AFA)-(KLM) Cargo and Martinair Cargo (MTH) plan to begin 2X-weekly, Paris - Atlanta 747F air cargo service on March 27; AirFrance (AFA) Cargo will operate the flights while AirFrance (AFA)-(KLM) Cargo and Martinair (MTH) Cargo will provide sales and customer service.

AirFrance (AFA) has relaunched plans for a partnership in a new airline in the Ivory Coast, which would make it a regional hub. The carrier, Air Côte d'Ivoire, could begin operations at the end of April with two leased A319s, "La Tribune" reported, citing (AFA) (CEO), Alexandre de Juniac, who was in the West African country to discuss the venture.

The Ivory Coast government would hold a 51% stake and the (AFA)/(KLM) Group would hold a 35% stake with partner Aga Khan Fund for Economic Development of the Ivory Coast. Local investors would hold the remaining 14% stake.

For (AFA)/(KLM), the move is part of a strategy to maintain its strong position in Africa and fend off increasing competition from Star Alliance (SAL) carriers Turkish Airlines (THY), Brussels Airlines (DAT)/(EBA) and Emirates Airline (EAD).

(AFA)’s goal is to build Abidjan Port Bouet Airport (ABJ) as a regional hub and secure a regional feed in West Africa. “Abidjan has a very privileged location in the area,” de Juniac said. (AFA)’s plan is to build a strategic partnership in the region. He said the venture has what he called a defensive component and said it would be “risky not to take part.”

Last summer, Ivory Coast’s Transport Minister, Gaoussou Toure told "Bloomberg" the government planned to start a new airline to replace Air Ivoire with the (AFA)/(KLM) Group holding a minority stake.

(AFA) operates a daily, Paris Charles de Gaulle - (ABJ) service.

AirFrance Industries (AFI)/(KLM) (E&M) signed an eight-year (APU) support contract with (LAN) Airlines covering its fleet of 777Fs. The services will be provided by (EPCOR), while pool access will be provided by (AFI)/(KLM) (E&M).

March 2012: The AirFrance (AFA)/(KLM) Group reported a net loss for its shortened nine-month 2011 financial year of -€442 million/-$580.5 million, reversed from a net profit +€980 million in the year ago-period. The operating result was positive, but the reported +€50 million operating profit was sharply down from the +€525 million operating profit in the year-ago period.

On a pro forma basis for the full year, January 1 through December 2011, results were worse with net loss coming in at €809 million versus a pro forma €289 million profit in 2010.

Group Chairman, Jean-Cyril Spinetta described 2011 as “a tough year for the group, due to the uncertain operating environment and the high fuel price.” He stressed that in “in this context, the success of the transformation plan presented on January 11 this year, is all the more crucial. All the announced actions are already underway.”

The group’s three-year (2012 - 2014) "Transform 2015" plan aims to bring the company back to profitability and builds on three priorities: restoring competitiveness through cost-cutting; restructuring the short- and medium-haul operations; and rapidly reducing debt by €2 billion to €4.5 billion by the end of 2014. The plan was initially outlined in November.

The restructuring plan targets a -10% reduction in unit cost ex-fuel and a return to breakeven of its loss-making medium-haul operations by 2014. The group’s medium-haul network reported a -€700 million operating loss in 2011.

Full-year pro forma revenue rose +4.5% to €24.36 billion and operating expenses rose +6.2% to €24.72 billion, mainly due to a +16.3% hike in fuel costs to €6.44 billion. Operating loss for the full year was -€353 million compared to a profit of +€28 million in 2010, including a -€202 million operating loss incurred in the fourth quarter. This compares to a +€81 million operating profit in the last three months of 2010.

The group gave a rather bleak outlook for the current year and said it expects first-half operating results “will be below that of the previous year [-€548 million loss]. However, the second half should benefit from the first effects of the three-year [restructuring] plan,” it said.

The AirFrance (AFA)/(KLM) Group (AF-KLM) has sold about half of its 15.22% its shareholding in Amadeus (IT) Holding, netting it €467 million/$627.5 million.

The sale of 7.5% of its ownership in the travel technology and distribution company is surely part of its efforts to restore profitability. The Franco-Dutch group in January launched a three-year “transformation plan” to bring the company back to profitability by immediately cutting costs by -€1 billion and rapidly reducing debt by -€2 billion to €4.5 billion by the end of 2014.

On March 8, (AFA)/(KLM) will announce financial results for its shortened nine-month financial year 2011. An analyst consensus forecast an operating loss of around -€240 million and a net loss of up to -€650 million. The (IAG) announced a +€555 million net profit for 2011.

(AFA)/(KLM) sold the 7.5% stake in Amadeus though a private placement. Rothschild has acted as adviser of the Group. The placement was managed by Goldman Sachs International and Santander.

(AFA) still retains 7.72 % of Amadeus (IT) Holding and said this brings its shareholding in line with Iberia (IBE)’s and Lufthansa (DLH). The three carriers, together with (SAS) Scandinavian Airlines, founded Amadeus as a global distribution system (GDS) in 1987.

“AirFrance (AFA), as well as (IBE) and (DLH), which hold respectively 7.50% and 7.61% of the share capital of Amadeus (IT) Holding, have each agreed to a lock-up of a 90-day period,” the (AFA)/(KLM) Group said.

AirFrance (AFA)/(KLM) is aiming to buy Alitalia (ALI in 2013 through a share swap, "La Tribune" reported.

However, using shares instead of cash to finance the acquisition will require a rebound of its share price, which is trading at around €4/$5.27, and a swift execution of its three-year “transformation plan” to bring the company back to profitability.

(AFA)/(KLM) will announce full-year results and analysts expect the group to report a net loss. Group debt is around €6.5 billion.

The Franco-Dutch group bought a 25% shareholding in (ALI) in early 2009, following the restructuring and re-launch of (ALI) under private ownership. (AFA)/(KLM) also obtained an option, subject to certain conditions, to purchase additional shares from 2013.

Acquiring full control of (ALI) is one of the main concerns of group Chairman, Jean-Cyril Spinetta, according to the French newspaper. Spinetta is also a board member of the Italian carrier.

(AFA) and (KLM) used an exchange offer for their merger in 2004. It wants to use the same mechanism for (ALI) to preserve its limited cash position, but “if the share price remains at its present level, the operation is impossible,” a company source told "La Tribune." It added that some analysts are warning that the Italian shareholders probably would prefer cash over shares of a loss-making airline.

Analysts also point to the possibility that the Italian shareholders might turn to Lufthansa (DLH), “which does have the means to pay in cash,” or might use the German card to heighten the price. (DLH) competed with (AFA)/(KLM) in 2008 to become the new (ALI)’s strategic partner/investor and was the preferred choice of then Italian Prime Minister, Silvio Berlusconi.

(ALI) reported a 2011 net loss of -€69 million/-$92.9 million, a +58.9% improvement from a -€168 million deficit in 2010. Operating loss was reduced from -€106 million to -€6 million “with a negative margin of 0.17% on revenues, in line with the operating breakeven objective,” the company said last month.

AirFrance Industries (AFI)/(KLM) Engineering & Maintenance (E&M) won a contract from new customer SriLankan Airlines (LNK) covering A340 and A330 component support.

(AFI)/(KLM) (E&M) has completed maintenance work on one 737SF for Cargo Air (VEA), a new customer, and has signed a component support agreement with (VEA).

AirFrance Industries (AFI)/(KLM) (E&M) has extended a component support contract with Yemenia Airways (YEM), originally signed in 2005. The renewed contract operates under the same terms, covering component support with pool access and repairs for two A330s.

AirFrance (AFA) will start operating an A380 on the Paris Charles de Gaulle (CDG) - Singapore (SIN) route on April 1. Frequencies will be 3X-weekly from June to the end of October.

(SIN) is the seventh A380 destination for (AFA) this summer, which also includes New York (JFK), Washington Dulles, Los Angeles, Montreal, Johannesburg, and Tokyo Narita.

“We are confident in Singapore’s potential and aim to capitalize on the good market conditions. (AFA) aims to strengthen its position in Asia and Singapore is a key travel hub in Southeast Asia and the Pacific,” (AFA)/(KLM) General Manager Singapore, Indonesia, Australia, and New Zealand, Paul Rombeek said.

(AFA)’s A380s are configured with 516 seats divided between four cabin classes, which include 9F first-class seats, 80C business-class seats, 38PY premium-economy seats, and 449Y economy seats.

April 2012: AirFrance (AFA) has added a stop at Casablanca Mohamed V International (CMN) on the return flights of its four times weekly A330-200 service between Paris Charles de Gaulle (CDG) and Bamako Sénou International (BKO) allowing it to change its crews in Morroco following the military coup in Mali.

AirFrance Industries (AFI)/(KLM) Engineering & Maintenance (E&M) has a contract with (TAB) Cargo (TPB) for the supply of a spare lease engine plus an engine shopvisit for its DC-10F.

(AFI)/(KLM) (E&M) won a contract from National Airlines (MUA) to provide maintenance for its (CF6-80C2) engines, powering its fleet of 747-400Fs. It will also lease airplane engines to (MUA) during repairs.

(AFI)/(KLM) (E&M) signed a contract with Air Corsica (CCM) covering phase out and "C" maintenance checks on its two A319s, to be carried out in April at (AFI)/(KLM) (E&M)'s Toulouse-Blagnac facility.

(AFI)/(KLM) (E&M) has promoted Ron de Bos Head of Sales in North America. De Bos joined (KLM) (E&M) in 1995 as a Purchasing Unit Manager, and from 2008 - 2012 served as Director Integrated Services.

May 2012: AirFrance (AFA) has reiterated its "Transform 2015" plans to increase productivity by +20% and expects to sign new agreements with ground personnel, flight deck (FC) and cabin crew (CA) unions at the end of June. Negotiations have been ongoing since the end of March.

(AFA) will also be trimming a number of “excess staff,” it said in an update on "Transform 2015." However, it will not disclose exact numbers until the second half of June, “depending on the outcome of the talks and decisions concerning the "Transform 2015" plan.” (AFA) said it hoped to minimize involuntary lay-offs.

(AFA) is also restructuring short- and medium-haul operations into three distinct areas of activity.

(AFA)’s own short- and medium-haul operations will include flights feeding long-haul services at Paris Charles de Gaulle (CDG), routes with a high proportion of business travelers in France and Europe, plus flights from Marseille (MRS), Nice (NCE), and Toulouse (TLS).

Regional activities will be focused on its Regional, Britair and Airlinair subsidiaries, operating to (CDG) on behalf of (AFA), as well as point-to-point flights from Paris-Orly (ORY) covering the domestic network.

Leisure activities will be concentrated on Transavia France (TVF), which will operate from (ORY) to Europe and the Mediterranean (excluding (MRS), (NCE) and (TLS)). By 2015 - 2016, the (TVF) fleet is expected to have grown from its current eight airplanes to between 20 and 22.

(AFA) said this restructuring would help it “optimize the organization of its regional flight operations and make better use of growth in the leisure segment with (TVF).”

In addition, (AFA) plans to increase fleet utilization by more than one hour a day, with crews assigned to more flights per rotation. This will enable (AFA) to reduce its short- and medium-haul fleet by 34 airplanes by 2014 (excluding (TVF)) without affecting the number of available seat kilometers.

(AFA) said it hoped to grow profitable long-haul routes this winter and suspend unprofitable ones. It is also confident that lower costs and greater aircrew productivity will support the introduction of new routes.

(AFA) Chairman & (CEO), Alexandre de Juniac said these objectives were “ambitious but feasible.” He said (AFA) needed to “renovate its organization and increase productivity by +20%.” The measures, he said, would help consolidate the airline’s future in an environment of “extremely fierce international competition.”

France’s Toulouse-Blagnac Airport (TLS) will this summer be the first airport to trial Subscriber Identity Module (SIM)-based Near Field Communication (NFC), allowing passengers to pass through various control points and gates using only their mobile phones.

Using the security of their (SIM) cards, 50 selected passengers will trial the new service on BlackBerry smartphones, as part of a joint undertaking between (TLS), Information Technology (IT) specialist, (SITA), Orange Business Services, and BlackBerry.

The test passengers' BlackBerry smartphones will feature (NFC) technology allowing radio frequency communication with other (NFC)-enabled devices by either tapping or positioning them within a range of a few centimeters. The phone will facilitate access to car parking, the boarding area via a premium access zone, and a premium passenger lounge. Passengers will also receive up-to-the-minute information such as changes to flight times, departure terminal or boarding gate.

(SITA) Lab Director, Renaud Irminger said the (SIM)-based (NFC) technology provides many benefits over current technology. “It is extremely secure, will work when the device is powered off, does not require the passenger to launch an app or retrieve an (SMS) or an email, and is not affected by reading problems caused by dirty screens,” he said, adding, “Overall, a passenger using an (NFC)-enabled device can be processed faster than any of the boarding processes available today."

AirFrance Industries (AFI)/(KLM) (E&M) won a long-term engine support contract from Midwest Airlines (MWA), covering (CFM56-7) engines equipping its two 737NG airplanes. The agreement covers shop visits and the supply of spare engines.

(AFI)/(KLM) (E&M) has won multiple engineering projects from (ILFC) (ILF). Modification projects include work for A320 and A330 airplanes such as cabin, avionics and material management.

(AFI)/(KLM) (E&M) has signed a component support contract with Aigle Azur (AZU) covering (AZU)'s fleet of A320s. The contract is a flight-hour agreement and includes major overhauls (C-checks) on a non-exclusive basis.

June 2012: Estonian Air (ENA) and AirFrance (AFA) have announced a code share agreement under which (AFA) will place its code on 6X-weekly, (ENA) Paris Charles de Gaulle - Tallinn service.

(KLM) Royal Dutch Airlines (CEO), Peter Hartman has confirmed during the (IATA) Annual General Meeting (AGM) that AirFrance (AFA)-(KLM) is in talks with Etihad Airways (EHD) about a potential joint venture (JV) or cooperation on routes between Europe, the Middle East and Asia. He has, however, ruled out any investments by (EHD) in (AFA)-(KLM).

AirFrance (AFA) has signed code share agreements with Air Burkina (VBW), the flag carrier of Burkina Faso, covering operations on the Paris Charles de Gaulle (CDG) - Ouagadougou (OUA) airport route and with Air Mali (CMP) between (CDG) and Bamako (BKO) airports. (AFA) is allocating (VBW) and (CMP) a quota of seats on these daily flights.

(VBW) and (CMP), plus Air Uganda (AUN) are members of the regional Celestair group of airlines supported by the Aga Khan Network for Economic Development.

(AFA) said this code share agreement “represents the first step in the new commercial cooperation between these airlines.” The agreement should shortly be extended to other routes in West and Central Africa and in Europe.

(VBW) (CEO), Sergio Rosa said the new partnership between the carriers will allow (VBW) to “better contribute to traffic developments, via Burkina, between France and West and Central Africa, and subsequently to other destinations in Europe.”

(VBW) operates to 10 cities in West and Central Africa from its (OUA) airport hub using MD-87 and Bombardier CRJ200 airplanes.

(CMP) was established in May 2005 in a bid to open up the country. (CMP) operates a fleet of MD-87s, Bombardier CRJ-200s and Beech19 airplanes serving 15 cities in West and Central Africa from its (BKO) and (OUA) hubs.

(AFA) operates a daily, A330 service between (CDG) and (BKO), and between (CDG) and (OUA).

Further reinforcing its presence on the African continent, (AFA) this month also inaugurated a daily nonstop flight between (CDG) and the Nigerian capital, Abuja (ABV). The (ABV) services will continue to/from Port Harcourt. (ABV) also operates daily nonstop flights between (CDG) and Lagos.

Marseille Provence Airport was AirFrance (AFA)’s first “provincial base” and opened in October 2011 with 13 new routes and a new organizational structure allowing for more efficient use of its airplanes and crew. Setting up bases in secondary French cities is one component of (AFA)’s turnaround strategy, which is aimed at returning its short and medium-haul operations to profitability, while also curbing the growth of low-cost carriers (LCC)s and regaining part of the market share it lost to high-speed rail.

(AFA) has steadily increased its route network from Marseille and has shown firm determination not to be intimidated by Ryanair (RYR), Europe’s largest and most aggressive (LCC). (LCC)s have a 24% share of the weekly seat capacity at the French airport and (RYR) has a 20% share, but (AFA) is by far and large the airport’s largest operator with 101,902 weekly seats and a capacity share of 38% for the week of June 11th to June 17th. Sister airline (KLM) deploys an additional 6,080 seats from/to Marseille. (AFA) and (KLM)’s share of airplane movements at peak-times at Marseille is 48.9%.

(KLM)/(AUK) and Flybe (BEE) have launched a code share agreement on two routes between Amsterdam (AMS) and the UK. (KLM)/(AUK) will now operate three flights a day between (AMS) and Southampton, as well as a daily flight between (AMS) and Inverness.

Flights on which (KLM) will put its code will be operated by (BEE) with Bombardier (BMB) Dash 8 Q400 and Embraer (EMB) E195 airplanes.

This partnership enhances the existing cooperation between (AFA)/(KLM) and (BEE) on a number of routes between France and the UK.

AirFrance (AFA)-(KLM) shareholders have refused overwhelmingly to validate the €400,000/$495,256 bonus paid to Pierre-Henri Gourgeon, former (CEO) of (AFA)-(KLM).

In total, 78.8% of shareholders voted against, 19.44% voted in favor and 1.76% abstained.

The outcome was not wholly unexpected. (CEO), Jean-Cyril Spinetta said that “in view of the vote of the state and the votes by mail already received, it is very likely that [the] resolution is dismissed." He said the vote was essentially a technicality in line with legal requirements.

Before the meeting, Finance Minister, Pierre Moscovici called on Gourgeon to repay the money on “moral” grounds, according to French media reports. They also suggest the shareholder vote will have no impact on the former (CEO), who received the bonus in addition to a reported €1.125 million severance payoff when he was ousted from the financially troubled carrier in October last year.

France President, Francois Hollande said the new government is targeting a limit on senior executive pay equivalent to 20 times that of their lowest-paid employee.

Three unions representing ground staff have agreed to plans by AirFrance (AFA) to slash over -5,000 jobs by 2014 as part of a vast plan to make the struggling airline profitable, sources said.

The labor union sources said the (CFDT), (CFE)-(CGC) and (FO) unions signed onto the deal, which will see the workforce shrink by -10% through voluntary departures and job reassignments.

The signatures ensure the accord will have sufficient support to be adopted, even though the main union among the 32,000 ground staff, the (CGT), has refused to sign up.

Discussions with unions for pilots (FC) and cabin crew (CA) are ongoing but should wrap up by July 15.

AirFrance (AFA) has promised not to resort to dismissals until the end of 2014 if employees agree to the plan, which also includes wage freezes and other cost cutting measures.

The Franco-Dutch carrier AirFrance (AFA)-(KLM) launched a major cost-saving program after posting a loss of -809 million euros/-$1.0 billion for 2011 and a first quarter net loss in 2012 of -368 million euros.

The "Transform 2015" plan aims to restructure the short- and medium-haul segments to make them more competitive and a refocus towards high-end segments.

(AFA) said it hoped the job reductions could be achieved without compulsory redundancies, but the option remains open if staff do not agree to voluntary measures, including incentives for early retirement or voluntary redundancy, moves to part-time work, or job-shares. The aim is to reduce headcount to 49,301 in a two-year period that began in December 2011. Attrition during the period is estimated at -1,712 personnel, leaving a further -3,410 to depart, including 450 pilots (FC) and 904 cabin crew (CA).

“AirFrance (AFA) is facing a fundamental choice about its future,” said (AFA) Chairman & (CEO), Alexandre de Juniac, announcing the strategy plan. “If we all make the necessary equitably distributed efforts, there will be no forced departures.”

Other points in the plan include restructuring short- and medium-haul operations around three poles: (AFA) mainline, a new regional hub and (LCC) subsidiary, Transavia France (TVF); combining operations of its three regional subsidiaries – Brit Air, Airlinair and Regional – at this new hub; developing (TVF) to attract the leisure market, with new routes in 2013 from Orly, Lille, Lyon and Nantes; improving long-haul operations by investing several hundred million euros in new on board facilities; and accelerating cost reduction in the cargo division.

(AFA) and (KLM) will partner with Panasonic Avionics to offer in-flight Wi-Fi and mobile phone data services on its 777-300s. The two airlines will offer trial versions of their in-flight Wi-Fi service beginning in early 2013.

“Being permanently connected is now part of our customers’ daily lifestyles. This trial run is the first step of (AFA)’s and (KLM)’s long-term strategy to offer in-flight connectivity solutions across our long-haul fleet. We are pursuing our investments to even better serve our customers and to remain at the forefront in terms of innovations and mobile services,” Christian Herzong, Senior VP Marketing for (AFA)/(KLM) said.

The trial phase will be conducted over the year 2013 on two 777-300s, operated by each airline. During this period, travellers will be able to hook up to the internet via their Wi-Fi enabled smartphone, laptop or tablet PC at a fixed rate, as well as use their mobile phone for Short Message Service (SMS) or e-mail, whatever their travel class.

AirFrance Industries (AFI) (KLM) (E&M) signed a contract with Orenair (ORB) covering maintenance and repair for (ORB)’s (APU)s on its 777 and 737 airplanes.

(AFA) has taken delivery of its eighth A380 and has launched a daily A380 service between Paris Charles de Gaulle (CDG) and Los Angeles (LAX). (LAX) is the third USA destination to be served by (AFA)’s A380, following New York (JFK) and Washington (IAD); daily service began May 28.

(AFA) also operates a daily, 777 flight from (CDG) to (LAX). Both daily services are operated as part of the transatlantic joint venture operated by (AFA)-(KLM), Alitalia (ALI) and Delta Air Lines (DAL).

(AFA) Chairman & (CEO), Alexandre de Juniac said the A380 plays a major part in (AFA)’s transformation plan.

The A380 will be operating to seven (AFA) destinations this summer, including daily to (JFK), (IAD), and (LAX) and 4x-weekly to Montreal in North America; daily to Johannesburg, South Africa; and daily to Tokyo/Narita as well as 3x-weekly to Singapore.

July 2012: AirFrance­ (AFA) -(KLM) incurred a second-quarter net loss of -€895 million/-$1.1 billion, significantly widened from a -€196 million net deficit in the year-ago period. It noted that much of the net loss can be attributed to one-time charges, particularly those related to its cost restructuring program and accounting changes.

The (AFA) group’s second-quarter operating loss was -€66 million, more than halving a -€145 million operating deficit in the 2011 June quarter. (AFA) - (KLM) Chairman, Jean-Cyril Spinetta said in a statement, “Even though these second quarter [operating] results represent a year-on-year improvement, they remain in negative territory. These results demonstrate how crucial the success of the "Transform 2015" [cost restructuring] plan is to the turnaround of the group. In an increasingly uncertain global economic environment compounded by oil price and exchange rate volatility, an improvement in our productivity and costs is even more necessary.”

(AFA) - (KLM), which boosted second-quarter revenue +4.5% to €6.5 billion, said it is maintaining “strict capacity control.” Second-quarter group passenger capacity was up just +0.3% year-over-year to 67.46 billion (ASM)s, while traffic heightened +2.4% to 55.82 billion (RPK)s. Load factor was 82.8% LF, up +1.7 points.

With the difficult second quarter following a shaky first quarter, (AFA) - (KLM)’s half-year 2012 net loss was -€1.26 billion, more than doubling a -€564 million net deficit in the prior-year period.

On 14 July, AirFrance (AFA) commenced seasonal domestic services connecting Figari (FSC) in the south of the Mediterranean island of Corsica, and Caen (CFR) in northern France. Weekly flights on the 1,100 km domestic route will be operated until 1 September using BritAir’s 70-seat CRJ700s. There is no competition on the route, which is AirFrance’s 12th domestic service from the southern Corsican airport.

ACCDT REPORT: The French (BEA) released its final report on the June 2009 accident regarding the loss of (AFA) A330-203 (CF6-80E1A3) (660, /05 F-GZCP), with 12 (FC) - (CA)/216 passengers on board.

This report is unlikely to quell the controversies that surround one of aviation’s worst-ever disasters; in particular, AirFrance (AFA) and Airbus (EDS) must confront potential legal jeopardy.

While partially blaming the pilots (FC)’s lack of understanding of the situation and their failure to react correctly or promptly to avert the crash that killed 228, (BEA)’s report raises numerous questions about airplane technology problems (especially with pitot probes and stall warning systems) and pilot (FC) training shortcomings. Both (EDS) and (AFA) face civil legal action seeking high levels of monetary compensation, and criminal manslaughter charges are also possible.

Gerard Arnoux, a spokesman for victims’ families, told "France 24" television that it is wrong to equally blame pilot (FC) error and faulty technology. The report details “a complete failure by Airbus (EDS), AirFrance (AFA), (EADS),” he said, adding that the “main cause” of the accident was “product defects” on the A330-200.

(BEA) Director, Jean-Paul Troadec noted to reporters that pilots (FC) are dependent on information, such as correct speed measurements produced by pitot probes, to make judgments on which actions to take. “This accident was the result of the airplane coming out of the normal flight envelope, handled by a flight crew (FC) which had lost their understanding of the situation,” he said. “Of course, we can improve the automated systems, improve their reliability and reinforce protective mechanisms, but at the end of the day, safety will always come down to a correct match between the pilots (FC)’s cognitive capacities and the information given to them to understand and react.”

And pilots (FC) must be properly trained to handle all situations, he explained. “The problem is that one can’t always rely on automatic functioning,” Troadec said.

Alain Bouillard, (BEA)’s Chief Iinvestigator on the Flight 447 probe, added, “The flight crew (FC) never understood that they were stalling. Only an extremely determined flight crew (FC), having clearly understood the situation, could have brought the airplane back to its normal flight envelope. Here the flight crew (FC) had almost a complete loss of control.”

AirFrance (AFA) said it has been involved since the accident in “an ongoing process of improving flight safety procedures. This process has allowed the airline to anticipate the implementation of the majority of the [BEA] report’s recommendations to be conducted on the operators’ initiative, such as changes to the flight crews (FC)’s training programs.”

Airbus (EDS) said it seeks “a full understanding of this tragic event, driven by the collective goal of continuous improvement in aviation safety. (EDS) has already started working at industry level to further reinforce the robustness of pitot probes requirements and actively supports related activities."

This final report reiterated the two main themes of its investigation over the past three years: the A330-200’s malfunctioning pitot probes provided inconsistent speed measurements and the pilots (FC) did not understand the rapidly deteriorating situation, failing to properly identify a stall situation or react promptly to it.

The pilots (FC) “had lost their understanding of the situation,” (BEA) Director, Jean-Paul Troadec said. The A330 crashed while en route from Rio de Janeiro to Paris Charles de Gaulle on June 1, 2009, killing all 228 passengers and crew. It took fewer than four minutes to fall from approximately 38,000 ft into the waters of the Atlantic Ocean.

But the report does not rest blame entirely with the pilots (FC). “Quite to the contrary, their report to me seemed quite balanced” and blamed faulty airplane technology and the training the pilots (FC) received, John Clemes, a victim’s brother who was among those fully briefed on the report before the general public, told "France 24" television. “They indicated a number of problems with the companies and manufacturers involved.”

(AFA) noted that (BEA) “underlines a sequence and combination of several factors (technical and human) that led to the loss of the airplane. The (BEA) report describes a flight crew (FC) who acted in line with the information provided by the cockpit instruments and systems, and the airplane behavior as it was perceptible in the cockpit: instrument indications, triggering and stoppage of the alarms, aerodynamic noise, airplane vibrations, etc. The reading of the various data did not enable them to apply the appropriate action.”

(LOT) Polish Airlines has signed a long-term component support agreement with AirFrance Industries (AFI)/(KLM) (E&M) for its fleet of 787s, which will ultimately comprise eight 787s. (LOT) is scheduled to deploy the 787 in January 2013.

August 2012: AirFrance (AFA) has confirmed press reports that it plans to increase the number of international flights from Paris Orly (ORY) which currently mainly plays the role of a domestic airport for (AFA). It now plans to better deploy its A320 family fleet based at the airport operating international flights during the day, while demand on domestic routes is not as strong as in the mornings and evenings complementing its international operations from Paris Charles de Gaulle (CDG). (AFA) did not want to confirm reports by "Le Parisien" that it would launch new routes from Orly to Athens Eleftherios Venizelos International (ATH), Casablanca Mohamed V International (CMN), Istanbul Atatürk/Yesilköy International (IST) and Rome Fiumicino Leonardo da Vinci International (FCO) airports, but announced the new flights scheduled to be launched from October would be announced soon. It currently already serves Barcelona El Prat International (BCN), Berne (BRN), Djerba Zarzis International (DJE) and London City (LCY) airports from Orly in addition to its domestic flights and long-haul routes to Cayenne Rochambeau (CAY), Fort de France Martinique Aimé Césaire International (FDF), Pointe à Pitre Le Raizet (PTP) and St Denis de la Réunion Roland Garros (RUN) airports.

AirFrance (AFA) - (KLM) intends to turnaround its short- and medium-haul operation with a solution organized around three units: (AFA)'s provincial bases, its regional business division and low-cost subsidiary Transavia (TAV).

Speaking at its half-year results announcement in Paris on 30 July, Group (CEO), Jean-Cyril Spinetta said "priority number one is medium-haul" as it seeks to stem the losses made by that part of its business and return to profitability.

This flexible, three-pronged approach is the latest legacy attempt at answering the difficulties posed by the arrival of low-cost competitors into the marketplace.

AirFrance (AFA) - (KLM) will grow the fleet of Transavia (TAV) in order to take over flights operated by its parent carriers on "highly competitive routes". In addition, an enlarged (TAV) will offer flights to destinations not previously served by the group's airlines, according to Spinetta.

However (CTAIRA) analyst, Chris Tarry questions how co-operative (AFA) - (KLM)'s unions will be as restructuring gathers pace. "If they start putting (TAV) on the (AFA) - (KLM) routes and withdrawing the legacy services, what are the unions going to say?" he asks. Tarry also wonders how many of (AFA)'s pilots (FC) will accept a lower salary and transfer to Transavia France, even with the generous lump-sum on offer.

And any upturn in (AFA)'s fortunes brought about by the restructuring may be used as an excuse to fight cuts to their terms and conditions, Tarry adds.

Peter Morris, Chief Economist of Flightglobal's Data & Consultancy division, Ascend believes the success of the strategy will depend on ticket prices. "The key thing you're coming back to is that this is short-haul travel and one-way or another it's about price," he says. While acknowledging the issues surrounding long-haul feed, such as product continuity, he says: "Yes there's a connectivity issue but the reason the low-cost carriers (LCC)s gained market share, is because they put the right price in the marketplace for a high volume of the market."

Morris believes that previous responses from legacy carriers to the low-cost threat "have been very similar so far. They've looked to reduce frequencies, they've looked to reduce airplane size, they've looked to stop serving destinations". Yet he says that "in a business which since time immemorial has grown economies of scale and volume growth, it's quite a cul-de-sac strategy to say this is all about downsizing."

However he is sceptical about whether restructuring will provide a solution to its problems. "If there's something they can do that gets a step-jump down in costs then yes, that definitely that buys some time, but ultimately they've always got that problem to deal with that the competitors, in one form or another, have a lower cost base and therefore can put a lower price in the market," says Morris.

(AFA)'s regional business unit, which includes the subsidiaries Britair, Regional, plus affiliate Airlinair is likely to be combined into a single brand and will have its fleet reduced by 21 airplanes. The group plans for the three airlines to operate flights to Paris Charles de Gaulle on (AFA)'s behalf and point-to-point flights from Paris Orly and across the French domestic network. Dublin-based subsidiary CityJet has not been included in the plans.

(AFA)'s regional base strategy, under which pilots (FC) and cabin crew (CA) work longer hours and are based in the French regions rather than Paris, is "highly reactive" according to Spinetta. "We'll quickly close [routes] if they don't work, he says", while (AFA) (CEO), Alexandre de Juniac says after the creation of bases in Marseille, Nice and Toulouse, there is now no chance of a similar base being created in Bordeaux, due to the size of the market.

(AFA) pilots (FC)’s union (SNPL) has approved a draft framework agreement that would allow (AFA) to pursue its efficiency plan. According to (AFA), 83% of the (SNPL) member pilots (FC) voted and 67% approved the agreement, which was drafted in July.

(AFA) has set the goal of achieving 20% efficiencies and restoring profitability under its "Transform 2015" plan. “This result clearly demonstrates the sense of responsibility of (AFA)’s pilots (FC) and their representatives," (AFA) (CEO), Alexandre de Juniac said. "With the agreement also signed by unions representing ground staff, this validation is a very solid base for AirFrance (AFA) to return to growth," he added.

The AirFrance group will combine the operations of three of its subsidiary and partner airlines into a single French regional entity as part of its restructuring and cost-cutting plan.

Regional carriers Brit Air and Regional plus French partner carrier Airlinair will operate under a new brand that will be announced in January with a launch scheduled for April 2013. The restructuring will cut airplane numbers by seven and flight crew (FC) jobs by -64, but (AFA) said this would be achieved without redundancies.

(AFA) has set the goal of achieving 20% efficiencies and restoring profitability under its "Transform 2015" plan.

(AFA) said the new division would be rapidly adaptable to market changes and rival airlines and be more competitive for business and leisure travel, both inter-regional and to Europe. In 2013, the French regional entity will operate 86 airplanes, down from today’s 93, but with a greater number of seats.

-5 flight attendant (CA) and -12 pilot (FC) jobs will be cut at Brit Air out of a total of 587 aircrew, while 47 pilot (FC) jobs will be cut at Regional out of a total of 409 pilots (FC). (AFA) said negotiations with unions on the job cuts will begin after talks with regional works councils are completed in late September.

"In a competitive and increasingly difficult economic environment, it is essential to make changes. I trust in our experience, energy and commitment to rise to all these new challenges together,” Lionel Guérin, in charge of the reorganization of the French regional entity, said.

September 2012: AirFrance (AFA) is planning to create a new headquarters near Paris, which will act as the decision-making center for its revamped regional operations.

As part of its restructuring and cost-cutting plan, (AFA) is streamlining the activities of its three French regional operators (Brit Air ((IATA) Code: DB), Regional (IATA Code: YS) and Airlinair) and from next April it will unite the airlines under a common brand.

The changes will lead to the loss of -64 flight crew (FC) jobs, although (AFA) said this will be achieved without redundancies, and its total regional fleet will be slimmed from 93 airplanes to 86.

“[On 21 September] we will start presenting the project to the works councils in different airlines,” said Regional (CEO) Jean-Yves Grosse.

During the meetings, management will flesh out details of the impact of the changes on the airlines’ fleets and headcount. Grosse said that further information will be made public in a week.

The three airlines (which each operate different regional airplane types) will retain their own air operator’s certificate (AOC), but they will operate under a single brand with centralized decision-making, marketing, scheduling, sales and fleet management.

Brit Air (CEO), Marc Lamidey, said: “We will do this rapidly, but progressively. We will carefully reduce the number of airplanes and staff. It is not easy. The airlines will still have separate headquarters with reduced staffing and there will be a special headquarters created for the group of airlines near Paris.”

Lamidey added that a full merger was ruled out because of time pressure and complexity. “If you do a merger, you have to focus on the merger. It doesn’t give you any time to address any other issues and we think these are more urgent.”

“The benefits of a merger would not be worth the trouble that we would face,” Grosse said. “We will try to maximize synergies, but keep the operations separate.”

AirFrance - (KLM) has partnered with Jetstar Airways (IMU) to offer daily one-stop flights between Australia's Gold Coast region and Europe via Japan. Under the partnership, passengers can fly with (IMU) from Coolangatta to Tokyo or Osaka, and connect on AirFrance (AFA)'s services to Paris or (KLM) Royal Dutch Airlines' services to Amsterdam.

"From Australia, our group already offers more than >500 departures per week through code share or commercial partnerships with a range of airlines," said Tom Reeves, (AFA) - (KLM)'s Regional Manager Australia & New Zealand.

(AFA) continued expanding its Marseille (MRS) base on 3 September, taking over the service to Amsterdam (AMS) from its Dutch sister airline (KLM), which until now has operated four flights a day with (KLM) Cityhopper (AUK)’s regional airplanes. (AFA) now launches the route with three daily frequencies, but using bigger A319 airplanes. As a consequence of the switch, seat capacity is up by +9% on the route.

Grosse said (AFA) is recruiting a new management team to steer the direction of the commonly branded airlines. Candidates will be drawn from the three regionals, (AFA) and external candidates.

The new set-up must be established by January 1, when the new brand will be unveiled and central sales will begin for flights after April 1.

Troubled carrier, AirFrance (AFA) plans to refurbish its entire fleet of long-haul 777s in a bid to respond to the competitive threat, and perceived higher quality service, of Gulf and Asian airlines.

Launching the initiative at a Paris press conference on 18 September, (AFA) (CEO), Alexandre de Juniac said the airline would invest "hundreds of millions of euros" to improve its offering to passengers.

"The next three years will see a very big investment, considering we are in an austerity period," he says. "But it will dramatically improve the level of service and product. By 2015, we will be at the best, world-class standard."

He admits the refurbishment program is a direct response to the higher level of service provided by new entrants to the market: "Gulf and Asian carriers have set higher standards than we had previously and we must do better."

From 2014, (AFA) will fit completely new interiors, configured in a four-class layout, to its fleet of 19 777-300 and 25 777-200 long-range twinjets. This will be followed in late 2015 by a complete refurbishment of its fleet of 10 A380s, two of which will only have entered its fleet this year.

Following the arrival of the final A380s this year, no new long-haul airplanes are scheduled to enter the fleet before 787-9s ordered by parent company (AFA) - (KLM) begin to arrive - initially with the Dutch carrier in 2016.

These will be followed from 2017 by A350s, says de Juniac, although he points out that negotiations to firm its 25-unit order with Airbus (EDS) and Rolls-Royce (RRC), the type's sole engine supplier, are still ongoing. Maintenance of the powerplants is the sticking point, says de Juniac, although he is confident the parties can still hammer out a deal "in the next few months".

"I would rather take three or four months and come up with a good agreement rather than rush things and arrive at a bad one," he says.

Also launched at the same event was a new joint-venture partnership with telecoms firm Orange to provide voice and data connectivity on (AFA)'s short- and medium-haul fleet. Trials of the service will begin, however, on two 777s, one operated by (AFA) and the other by sister carrier (KLM) in 2013.

AirFrance Industries (AFI)/(KLM) (E&M) won a total care maintenance contract from Air Madagascar (MAD) covering two A340-300s. The two ex-AirFrance (AFA) A340-300s underwent painting and cabin modification in Paris Orly and in Amsterdam.

Sabre Travel Network has inked a multi-year full-content agreement with AirFrance (AFA) to sell its seats and ancillary products through travel agents connected to its global distribution system (GDS). Among the products made available to travel agents will be its economy comfort seats. Alitalia (ALI), Aegean (CRM) and Finnair (FIN) have also recently chosen to market ancillary products through the Sabre (GDS).

October 2012: AirFrance (AFA) will launch seasonal, 5x-weekly, Paris Charles de Gaulle - Minneapolis-St Paul A340 service on May 21, growing to daily on June 17. (AFA) will also add 3x-weekly, Paris Charles de Gaulle - Kuala Lumpur 777-200 service on April 22.

SkyTeam (STM) Alliance member AirFrance (AFA)-(KLM), Oneworld (ONW) Alliance’s Air Berlin (BER) and Etihad Airways (EHD) have announced a strategic partnership to strengthen their route networks. The agreement includes code shares between (BER) and (AFA)-(KLM) from October 28.

The expansion in France allows (BER) to consolidate its market position from three to nine destinations via Paris Charles de Gaulle (CDG) and Paris Orly to Bordeaux, Lyon, Montpellier, Marseilles, Nantes and Toulouse.

(AFA) will add its code on (BER) flights via Berlin-Tegel (TXL) to Krakow (KRK), Gdansk (GDN) and Graz as well as from Dusseldorf - Dresden and Nice - Vienna. (KLM) and (BER) will exchange codes between Amsterdam-Schiphol (AMS) and (TXL) as well as to (KRK), (GDN) and Kaliningrad. (BER) will add its code via (AMS) on (KLM) to Edinburgh, Glasgow and Manchester.

Also from October 28, (KLM) will code share with (EHD) on its (AMS) - Abu Dhabi (AUH) flights and (EHD)’s daily, (CDG) - (AUH) service with (AFA). (EHD) gains access to 10 additional European destinations with (AFA) - (KLM), while (AFA) and (KLM) gain access to five further destinations in Asia and Australia.

(AFA) began serving its first German destination from London City (LCY) on 29 October, as its subsidiary CityJet launched six weekly flights to Münster/Osnabrück (FMO) in the western state of North Rhine-Westphalia. Andre Cini, CityJet’s (CCO), commented: “The new service has had good forward bookings and better than our previous launches. There is huge opportunity in Germany as it is a big business and convention destination and more cities could be served from London City.” All flights are operated using the airline’s fleet of F 50s. None of London’s airports have been linked directly to Münster/Osnabrück since airberlin (BER) pulled its London Stansted service in October 2011.

"The partnership between (AFA) - (KLM), (EHD) and (BER) reflects our Group’s strategic positioning to ensure the best possible services between Europe and the rest of the world, by developing our network and airline partnerships,” (AFA) (CEO), Jean-Cyril Spinetta said.

(BER) (CEO), Hartmut Mehdorn said the cooperation “considerably strengthens our presence in the European market and link our Berlin hub to even more destinations.”

“This is (EHD)'s 40th code share agreement. It reflects the core elements of our 10-year master plan, driven by organic network growth, combined with the forging of strategic code share partnerships and minority equity investments in other airlines,” (EHD) (CEO), James Hogan said. The deal gives (EHD) a combined network of 321 destinations. Hogan confirmed talks with (AFA) began in July.

Air Berlin (BER) has been urged by its largest shareholder, Etihad Airways (EHD), to join cooperation talks with AirFrance (AFA) and (KLM) Royal Dutch Airlines that (EHD) has been holding for several months already. According to statements by (EHD) (CEO), James Hogan published by "Süddeutsche Zeitung" in Germany, (EHD) would have asked (BER) to start operating joint flights with (AFA)-(KLM).

(AFA) claims it is “far too early” to discuss whether Air Berlin (BER) might switch alliances from the Oneworld (ONW) to the SkyTeam (STM) alliance, following comments made by (AFA) (CEO), Alexandre de Juniac. Earlier this month, SkyTeam (STM) alliance member, (AFA) signed a strategic partnership with Etihad (EHD) and its equity partner (BER). The agreement includes code shares between (BER) and (AFA) - (KLM) from October 28.

In an interview with "Frankfurter Allgemeine Zeitung," de Juniac indicated a change of alliances could ultimately be in the cards for (BER). “If we further work closer together along the way, (BER) must decide if it would stick to the Oneworld (ONW) alliance or switch to the SkyTeam (STM) alliance of (AFA) - (KLM),” de Juniac said.

However, (AFA)’s Public Relations (PR) team is playing down the comments, saying the cooperation between (EHD), (BER) and (AFA) is already “a very ambitious first step.” “It is too early to speak about the next phase, meaning the alliance, at this stage.”

AirFrance (AFA) has rolled out a new management structure as part of its "Transform 2015" plan to achieve 20% efficiencies and restore profitability.

As of January 1, (AFA) will be structured into eight business units: — long-haul, medium-haul at Paris-(CDG), Paris-Orly and the regional airports, the French Regional Hub, Transavia France (TVF), cargo, industrial operations and Servair.

According to an (AFA) statement, each business unit will “notably be responsible for controlling costs in its area of management as well as following up the implementation of Transform 2015.” (AFA) also said its passenger operations will be structured into three business units: — long-haul, medium-haul at Paris-(CDG), and Paris-Orly and the regional airports.

“Each Vice President will have responsibility for the different stages of the customer’s trip: from marketing to the implementation of the ground and in-flight products by the ground and in-flight product teams. A pilot (FC) and Cabin Crew Manager will also report functionally to their Vice President to ensure optimum links with crews,” (AFA) said. Seven Project Managers have been appointed to work on this new organization, according to (AFA).

(AFA) Chairman & (CEO), Alexandre de Juniac said: “Customer focus, reactivity and team work are our guiding principles that have led us to choose this organization. It aims to favor the roll-out of "Transform 2015" and meet its ambitious objectives of a return to competitiveness and a more upmarket positioning of its products and services.”

AirFrance (AFA) is playing down the expected impact of a staff walkout, which is planned for October 26, in protest against the airline’s restructuring program. France’s powerful (CGT) union has called on the airline’s ground staff to take action against the "Transform 2015" plan on October 26, just as the French school holidays begin.

However, (AFA) has dismissed the action as being staged by “a single union,” adding that “disruptions should remain limited to a few flight delays.” (AFA) is still expecting to carry all passengers to their final destinations. Further information on operations during the walkout will be released on October 24.

“AirFrance (AFA) is doing all it can to limit the impact of this disruption on its flights and to provide customers with optimum information as early as possible,” (AFA) said.

AirFrance Industries (AFI)/(KLM) (E&M) said its new engine test cell facility has entered service at Paris Charles de Gaulle airport. The test cell is now in use on (GE90-94) and (GE90-115) engine types and is (EASA) and (FAA) approved. It will soon become operational for a wider variety of engines.

AirFrance Industries (AFI)/(KLM) (E&M) and Lufthansa Technik (DLH) (LTK) agreed to launch a joint offer for providing Embraer EMB-Jet family component support. The two companies are now developing a business model for the product, which may expand to offer services beyond component support. Their existing (JV), "Spairliners" will develop the project.

Nordstar (Taimyr Airlines) (JSC) has signed a contract with AirFrance Industries (AFA) (KLM) Engineering & Maintenance (AFI KLM E&M) covering the repair and lease of (JSC)’s (CFM56-7) engines on its 737NG fleet.

(AFI KLM E&M) has also extended a long-term leasing contract for a (CF6-80C2) engine with AirBridgeCargo (ABC) as a spare for its 747-400F freighters.

(AFI) (KLM) (E&M) won an AerCap (DEA) contract for cabin modifications and an overhaul on one A321 airplane. It will conduct a general six-year check as well as a "C4" heavy maintenance check, will paint new livery, will overhaul the control system circuits and on-board computers and will change configuration of the economy (Y) class from 199 seats to 220.

November 2012: According to the UK's "Sunday Times", Delta Air Lines (DAL) wants to partner with AirFrance (AFA)/(KLM) to buy Virgin Atlantic (VAA) by purchasing the 49% stake in (VAA) held by Singapore Airlines (SIA), (whom has long indicated it has wished to be rid of it). Another factor is that 49% is the limit under foreign ownership rules, and (AFA)/(KLM) could buy Sir Richard Branson's 51%, so that the three SkyTeam (STM) Alliance partners could together assume full control.

(AFA) will launch daily, Paris Charles de Gaulle - Tokyo Haneda service from the summer of 2014, when new slots will be released for international flights.

AirFrance Industries (AFI) has invested €43 million/$54.7 million in a new 5,000 sq m engine test cell based at Paris Charles de Gaulle Airport (CDG) - - SEE PHOTO - - "AFA-2012-11 - NEW ENGINE TEST CENTER." (Photo shows (AFA) Chairman & (CEO) at the Paris (CDG) facility.

The ZEPHYR facility will test approximately 300 engines each year and is part of the AirFrance (AFA) “Transform 2015” plan in which it seeks to expand into high growth activities including component and engine. “The test cell will enable AirFrance Industries (KLM) Engineering & Maintenance to cover the entire maintenance process for engines such as the (GE90-94/115) equipping 777s, and the (CFM56) power plants equipping Airbus (EDS) airplanes in the A320 family, and the A340,” (AFI) said. “The new test cell is also ready to test the (GP7200) engines equipping the A380, and has been designed to adapt to the engines that will equip future generations of airplanes.”

The facility has been certified by the European Aviation Safety Agency (EASA), the USA (FAA), and the Civil Aviation Administration of China (CAAC). “The implementation of a new engine test cell at Paris-(CDG) enables us to reaffirm our position as a major player in the multi-product airplane maintenance business,” (AFA) Chairman & (CEO), Alexandre de Juniac said. “I hope we can push our presence with this facility also in markets like China. You have to move quickly in these markets [to be successful].”

AirFrance Industries (AFI) (KLM) (E&M) won a long-term on-wing engine repair and maintenance contract from Vladivostok Air (VLK) covering its A320 engines.

In general, (AFI) expects a +10% annual growth rate for the industry in the Chinese Maintenance Repair & Overhaul (MRO) market, compared to a +1% growth rate in North America and Europe.

Cyprus Airways (CYP) retained AirFrance/(KLM) Consulting to help (CYP) restructure with both government aid and major labor concessions, assuming (CYP) can acquire them.

AirFrance (AFA) is pursuing Airbus (EDS) for lost revenues following a number of technical issues with its A380 fleet, including those related to wing cracks. “We are in negotiations with (EDS) about compensation for airplanes being taken out of service, in order to partly offset lost revenues,” an (AFA) spokesman said. “The talks are still underway, but the subject is all the more complex given that it concerns all operators.”

He declined to comment on the amount of compensation (AFA) is seeking or the amount of airplane ground time caused by the problems.

The compensation claim relates to ground time caused by micro-cracks on the A380’s wings and some “minor operational incidents” with the type’s Engine Alliance (GP7000) engines, he said.

(EDS) has come up with an upgrade program to remedy the wing cracks, but this needs to be approved and the schedule for the work has “not yet been defined,” the spokesman said.

(AFA) has received eight of the 12 560-seat A380s it has on order and its fleet has accrued 55,000 flight hours since 2009. A further two A380s will arrive by summer 2014, but the final pair have been postponed under (AFA)’s restructuring plan. “The delays to the delivery schedule mean we have not yet reached our cruising stage in terms of performance, due to the technical problems, delivery schedule delays and problems with the micro cracks,” the spokesman said.

December 2012: AirFrance (AFA) - (KLM) has added an extra €500 million/$654 million to its savings target for 2013 - 2014, in an effort to match the margins of its peers. The changes are part of the group’s "Transform 2015" restructuring plan.

Earlier this year, the Franco-Dutch airline group outlined plans for a €1.4 billion investment in 2013, followed by a further €1.6 billion in 2014.

However, an (AFA) spokeswoman said these figures have now been cut by -€500 million. (AFA) will deliver €300 million of the total, while the remaining €200 million will be cut from (KLM). Following the changes, (AFA) - (KLM)’s capital expenditure will be €1.1 billion in 2013 and €1.4 billion in 2014.

This forms part of a plan to slash -€2 billion from its net debt by the end of 2014, which will be achieved through cost savings and by limiting growth and investments.

It is also aiming to cut unit costs by -10% by securing new collective agreements, restructuring its medium-haul network, turning around its cargo operations and improving returns from its long-haul and maintenance activity.

(AFA) - (KLM) estimates its own margin for the 2011 - 2012 financial year to be -0.2%, compared to the International Airlines Group at 0.8% and Lufthansa at 2.2%.

(AFA) will launch daily, Paris Charles de Gaulle - Tokyo Haneda service from the summer of 2014, when new slots will be released for international flights.

The balance of power in the London Heathrow (LHR) long-haul market may once again shift, as the Virgin Group and Singapore Airlines (SIA) appear to be moving closer to selling a stake in Virgin Atlantic (VAA), possibly to Delta Air Lines (DAL) and (AFA)-(KLM).

(SIA) in a short statement to the Singapore stock exchange says it is “in discussions with interested parties concerning the possible divestment of its 49% shareholding in (VAA).” But it adds, “These discussions may or may not result in a transaction.”

The disclosure came after UK newspaper "The Sunday Times," reported that (DAL) is in talks with (SIA) to buy its 49% stake in (VAA). The report also says (DAL)’s SkyTeam (STM) Alliance partners AirFrance (AFA)-(KLM) is planning to buy part of the Virgin Group’s 51% stake in (VAA).

(DAL), meanwhile, is not commenting on the story, calling it rumor and speculation. If (DAL) proceeds with the acquisition, the move would provide a major boost to the (STM) Alliance’s access at (LHR), and at the same time curtail Star (SAL) Alliance’s reach at the airport, which has been limited by Lufthansa (DLH)’s sale of its BMI (BMA) division to the International Airlines Group (IAG) unit British Airways (BAB). (BAB) currently is the dominant player on transatlantic services from (LHR), a position that is strengthened by its joint venture with Oneworld (ONW) Alliance partner American Airlines (AAL).

In contrast, (VAA)’s strategic position has become weaker as its competitors grow. This prompted (VAA) in 2010 to appoint an adviser to investigate potential growth options, including alliance membership and buying a stake in another airline. Sir Richard Branson, (VAA)’s controlling shareholder through his Virgin Group, has said that he wants to remain involved in (VAA) even if part of (VAA) is sold.

(VAA)’s biggest asset is its transatlantic network from (LHR), the main gateway into the UK and one of the world’s most important business destinations. But (VAA) has been losing money. In the 12 months ending February 29, (VAA) posted a loss of -£80 million/-$128.3 million, compared to a profit of +£18.5 million in the previous year. (VAA)’s (CEO), Steve Ridgway, at the time said the loss was due to “sky-high fuel prices,” global economic uncertainty and a +25% increase in passenger duty fees. Ridgway is due to retire from his position in early 2013.

(VAA) is particularly vulnerable to high fuel prices. Its fleet of 42 airplanes includes four A340-300s, 17 A340-600s and 13 747-400s. These four-engine airplane types burn more fuel and are more expensive to maintain than newer models. (VAA) has taken steps to update its fleet by ordering 16 787-9s and six A380s. First delivery of the 787-9s and A380s is in 2014 and 2015, respectively, says (VAA).

Despite the cost exposure, (VAA) has valuable airport slots and may be of strategic importance to a USA carrier. It will still be difficult for (SIA) to secure a price comparable to what it paid for its stake in early 2000. (SIA) paid £600.25 million for the 49% share, which included a capital injection of £49 million. The deal valued (VAA) at £1.2 billion, but (SIA) has since written down the value of the shareholding.

AirFrance Industries (AFI)/(KLM) (E&M) named Vincent d'Andrea to (CEO) of its Engine Part Repair subsidiary, (CRMA), replacing José-Marie Louis who has been appointed Senior VP Engine Overhaul for AirFrance Industries (AFI). It also named former Senior VP Engine Overhaul, Anne Brachet to Senior VP Engineering & Airframe for (AFI).

See video "AFA-AFI-KLM EM" - -

January 2013: Deutsche Lufthansa (DLH) slipped further behind European market leader AirFrance (AFA)-(KLM) Group after (DLH)’s disposal of UK carrier (BMI) (BMA) led to a dip in annual traffic, the standard measure for ranking airlines. (DLH)’s passenger traffic (the number of customers carried multiplied by the distance flown) fell about -1% to 206 billion revenue passenger kilometers (RPK)s last year, "Bloomberg" calculations based on data from (DLH) show.

That’s -9% lower than at (AFA)-(KLM), where the total increased +2.1% to almost 224 billion (RPK)s, with the gap between the pair widening from 5% in 2011. The (IAG), parent of British Airways (BAB), posted a gain of +4.4% to 176 billion, aided by its purchase of (BMI) (BMA) from (DLH), even after a drop in traffic at Spanish unit Iberia (IBE).

“(DLH)’s idea was to grow at London Heathrow (LHR) airport but it wasn’t able to get the scale it wanted. The (IAG) straight away rationalized and used (BMA) in an entirely different way.”

(DLH) said that 2012 traffic amounted to almost 205 billion (RPK)s, excluding (BMI), which it sold to the (IAG) on April 20. (BMA), which has since been folded into (BAB), contributed 1.41 billion (RPK)s in the first three months, according to figures from (DLH), which didn’t provide data for the first three weeks of April.

(DLH) transported 103 million passengers last year, up +2.4% on 2011, excluding (BMA) from both years, making it the European No 1 by that measure. (AFA)-(KLM) and the (IAG), now referred to as the International Consolidated Airlines Group SA, lured 77.4 million and 54.6 million travelers, respectively.

(DLH) Passenger Airlines, which includes the namesake brand and discount division Germanwings (RFG), also transported +2.4% more passengers, while the Swiss (CSR) and Austrian Airlines (AUL) units carried +3% and +1.8% more.

(DLH) increased capacity (ASK)s only +0.6 percent in 2012, excluding (BMA), versus a +2.2% traffic (RPK) increase on that basis, so that the load factor, a measure of occupancy, advanced +1.2 points to 78.8% LF.

The (IAG) added +2.8% more seats, barely half the traffic gain, and also lifted occupancy +1.2 points, to 80.3%. (AFA)-(KLM), which has its headquarters in Paris, lifted capacity +0.6%, giving the same increase in occupancy for a load factor of 83.1% LF.

Europe’s major airlines are reviewing their commitment to flights within the region in the face of competition from Ryanair (RYR) and EasyJet (EZJ), especially where services don’t feed traffic onto their long-haul services. “They’re all cutting short-haul where it’s not profitable. Keep capacity discipline and you get that demand squeeze and can push up prices.”

AirFrance (AFA) has unveiled the latest stage in its "Transform 2015" program as it seeks to counter increasing competition. Its “New Economy Offer,” branded as "MiNi," will make a new package available to 58 destinations on its short- and medium-haul network.

The move comes after a series of moves designed to cut costs and improve (AFA)’s product. Like many European legacy carriers, (AFA) is under pressure from fast-growing Gulf airlines on long-haul services, while low-cost carriers (LCC)s are increasingly eating into the short-haul European market.

As part of the cost-cutting initiative, (AFA) has pledged several hundred million euros to revamp its first (F)- and business (C)-class long-haul cabins, an initiative to move its medium-haul product up-market and the merging of three regional subsidiaries into a single entity, details of which are due later this month.

(AFA) has also created regional hubs in France where it will base airplanes and crews at lower costs than Paris. “(AFA) is clearly illustrating its ambition to pursue a policy of constant adaptation of its products and services, and earn its customers’ preference,” Chairman & (CEO), Alexandre de Juniac said.

Like Iberia (IBE) and Lufthansa (DLH), the AirFrance (AFA) part of the AirFrance (AFA)-(KLM) group is in the midst of a major streamlining exercise that it expects will make it +20% more efficient. Putting its short-haul operation back on track is only one of the tasks that (AFA) has to address in 2013. Its bilateral alliance with Etihad Airways (EHD) has to be implemented, along with new code sharing arrangements with Air Berlin (BER), both of which represent deals outside of the SkyTeam (STM) alliance. But of even more strategic importance, the group has to determine if it wants to grow further, by taking a larger stake in Alitalia (ALI) or investing in other subsidiaries.

(AFA) announced the temporary suspension of its weekly A330-200 service between Paris CDG and Bangui M'Poko (BGF) until January 2 due to the deterioration of the “security situation in Bangui.” Protests against France had taken place in front of the French embassy in the Central African Republic’s capital leading to (AFA)'s decision to let its flight operating to Bangui on December 26 to turn back to Paris Charles de Gaulle (CDG) after departure.

AirFrance (AFA) commenced operations on the 800 km intra-European route from London City (LCY) to Nuremberg (NUE) in German Bavaria on 27 January. The service operates with 11 weekly frequencies using BAe 146s. Christine Ourmières, CityJet’s (CEO), said: “Nuremberg is a key business hub in Europe given its position as the capital of Germany’s industrial heartland. It is the head office location for many of Germany’s multi-nationals such as Siemens, Puma and Adidas and it plays host to several international trade fairs.” Previously, the route was operated by Lufthansa (DLH) since November 2007, but the service was then withdrawn only two seasons later.

(AFA) is uniting its three regional airlines (Brit Air, Regional and Airlinair) under a new brand name: HOP! HOP! will launch on March 31, operating 98 airplanes ranging from 48 to 100 seats. It will serve 136 domestic and regional destinations, representing 530 daily flights. It will employ more than >3,000 staff to be led by (CEO) Lionel Guerin. SEE PHOTO - - "AFA-2013-01 - HOP INTRO."

Lionel Guerin is leaving Transavia France (TVF) to become the (CEO) of AirFrance (AFA)’s new regional airline HOP! Guerin, who was formerly (CEO) of French regional Airlinair, set up Transavia France (TVF) and has led the reorganization of AirFrance’s regional operations.

Under the new structure, HOP! will sit alongside mainline hub operation AirFrance (AFA) and leisure arm Transavia France (TVF). The new regional airline will perform all (AFA)’s point-to-point flights from Paris-Orly, domestic operations and some flights into Paris Charles de Gaulle on behalf of AirFrance (AFA).

“With "Transform 2015," the entire company is being reorganized around the customer. The launch of HOP! is a part of this,” said (AFA) (CEO), Alexandre de Juniac. “Our new regional airline will be a real asset to better serve all customer segments, in France and in Europe.” The regional revamp forms part of (AFA)’s plan to turnaround its short and medium-haul operations from a “substantial deficit.”

(AFA) said, “The name ‘HOP!’ evokes rapidity and the ease with which travelers can get from point A to B. Synonymous with agility, HOP! illustrates its capacity to bounce back and adapt to customers’ needs.”

(AFA)’s Irish regional subsidiary, CityJet is excluded from the French regional revamp and has already outlined plans to seek external investors.

AirFrance Industries (AFI) (KLM) (E&M) was selected by AlMasria Universal Airlines (ALU) to deal with an airplane on ground (AOG) situation involving (CFM56-5B) engines. The (MRO) provider organized the lease of two spare engines for (ALU), the Egyptian carrier and a shop visit for the two faulty engines.

February 2013: The AirFrance (AFA)-(KLM) Group reported a full year net loss of -€1.2 billion/-$1.9 billion, widening from a -€809 million loss in the year-ago period. The airline said the result was due to exceptional items, including a €471 million restructuring provision. “We have reduced our losses and revenues have held up well. We are beginning to see the initial results of our "Transform 2015" restructuring plan,” said (AFA)-(KLM) Group Executive VP Finance, Philippe Calavia. He said the net result was “strongly negative” because of a €471 million restructuring hit. Other exceptional items included a €173 million goodwill write-down from the acquisition of Belgian regional airline (VLM) Airlines and a €97 million boost from the sale of shares in Information Technology (IT) provider, Amadeus. (AFRA)-(KLM) also booked a €100 million non-cash hit due to changes in pension reporting rules.

Revenue rose +5.2% to €25.6 billion, while operating expenses increased +4.9% to €25.9 billion, producing an operating loss of -€300 million, improved +15% from a -€353 million prior-year operating loss. The revenue boost was offset by an additional €890 million in fuel expenses, which went “well beyond” the group’s initial forecast. Excluding currency effects and fuel, operating costs rose +0.5%. Calavia said this shows the initial effects of "Transform 2015."

He added the group’s operating losses narrowed by €112 million during the second half of the year, although this was “limited” and “not sufficient.” (AFA) has also focused on reducing its net debt, slashing this figure by -€549 million in 2012 to below €6 billion. This will improve its access to additional funding.

Traffic rose +2.1% to 223.9 billion (RPK)s on a +0.6% increase in capacity to 269.3 billion (ASK)s, producing a record-high load factor of 83.1% LF, up +1.2 points.

Yield rose +4.4% to 8.6 cents as (RASK) increased +5.9% to 7.15 cents and (CASK) increased +4.9% to 7.24 cents. (CASK) ex-fuel and currency exchange fluctuations, and the pensions hit was -1.1% down.

AirFrance (AFA)-(KLM) Group Chairman & (CEO), Jean-Cyril Spinetta declined to comment on when the business is likely to breakeven. He said (AFA)-(KLM) has “clear objectives and commitments” on capacity and cost, which are both controllable. However, he said hitting breakeven also depends on three major uncontrollable external factors: the economy, fuel prices, and exchange rate fluctuations.

(AFA)-(KLM)’s Cargo division is facing a “drastic and substantial re-organization” after posting a -€222 million/-$291 million full-year operating loss, compared to a -€60 million loss in 2011.
“This result cannot be satisfactory. It requires drastic and substantial reorganization steps,” (AFA)-(KLM) Chairman & (CEO), Jean-Cyril Spinetta said at the release of the group’s 2012 financial results. Spinetta detailed plans to slash the division’s losses by -€140 million, although he added: “This is not an (AFA)-(KLM) crisis. This is a crisis for all cargo leaders around the globe.”

Full year cargo revenues fell -2.7% to €3.06 billion, although the decline would have been -6.4% excluding positive currency effects. In the first three quarters of the year, unit revenues fell by -4.1%, -6.7% and -5.7%, respectively, although they rose +1.5% in the final quarter. “It is not a very positive picture,” (AFA)-(KLM) Executive VP Finance, Philippe Calavia said. “There may be a glimmer of hope in quarter four, when we succeeded in maintaining unit revenues as slightly positive, but let’s not draw any hasty conclusions. We need to continue to tightly control capacity in that business.”

Annual (ATK)s for the year were down -3.5%, masking a deepening of cuts from -2.2% in the first quarter to -5.5% in the fourth quarter, but the total cargo traffic drop was even sharper at -6.3%. This pushed the average load factor down -1.9 points to 64.5% LF.

Since 2009, the group has slashed its full freighter fleet from 25 airplanes to just 13 today, comprising nine in Amsterdam and four in Paris. Around 31% of its total cargo is carried by full freighters, while the remainder is transported as belly freight or in Combis.

However, overcapacity, especially from main Asian markets, continues to be a problem. With this in mind, (AFA)-(KLM) is planning to cut its cargo capacity by a further -0.5%, of which 6% will stem from its full freighter operations. It has returned three freighter airplanes to lessors, wet-leased a 747-400ERF to new partner, Etihad Airways (EHD) and sealed a joint-venture (JV) with Kenya Airways (KEN) covering another airplane on China - Africa routes. (AFA)-(KLM) hopes these capacity cuts will shave around -€50 million from its cargo losses.

A further -€40 million in savings will be trimmed from the cargo division’s controllable cost base, forming part of its "Transform 2015" restructuring plan. Finally, simplified products and improved revenue management policies are slated to deliver another +€50 million in revenues.

Later in the month, Jean-Cyril Spinetta said he believes Delta Air Line (DAL)’s recent 49% stake in Virgin Atlantic (VAA) will help strengthen the SkyTeam (STM) Alliance’s transatlantic joint venture (JV). Spinetta said: “(DAL) acquired 49% of (VAA) by buying the stake held by Singapore Airlines (SIA). That will translate into a strengthening and consolidation of our competitive position there.”

He highlighted the strong performance of the (JV), which also includes Alitalia (ALI). The partnership delivered €9.6 billion/$12.66 billion in revenues during 2012. Transatlantic unit revenues (excluding currency effects) rose +10.4%, off the back of a 5.3% capacity reduction during the year.

The (AFA)-(KLM) (CEO) dismissed suggestions that the (DAL)-(VAA) deal could dilute traffic from its Paris and Amsterdam hubs, as (VAA)’s primary focus is on point-to-point activities. He believes the tie-up will “significantly improve the performance of (VAA)” with improved American feed.

He also sees a potential future for (VAA) in the (STM) Alliance, describing such a move as “logical.”

Hop! ((IATA) Code: A5, based at Paris Orly airport (ORY)) has officially been introduced as a new brand for AirFrance (AFA)'s regional subsidiaries: Airlinair ((IATA) Code: A5, based at Paris Orly airport (ORY)); Brit Air ((IATA) Code: DB, based at Morlaix Ploujean airport (MXN)); and Régional ((IATA) Code: YS, based at Nantes Atlantique airport (NTE)); with Hop! to be used from March 31 onwards on many flights by the three carriers. AirFrance (AFA) has set-up an own website to distribute Hop! flights that will operate under the A5 IATA code of Airlinair. All regional domestic flights currently served by the three airlines, excluding flights from and to Paris Charles de Gaulle (CDG) and Paris Orly (ORY), will solely be sold by Hop! from March 31 onwards. This also includes all routes currently served by Airlinair under its own code from Paris Orly right now, as well as AirFrance (AFA) routes from Orly to Lorient Lann Bihoue (LRT), Lourdes/Tarbes Pyrénées (LDE), Perpignan Rivesaltes Llabanere (PGF), Quimper Pluguffan (UIP) and Rodez Marcillac (RDZ). All international flights operated by the regional carriers from Bordeaux Mérignac (BOD), Lyon St Exupéry (LYS), Nice Côte d'Azur (NCE) and Strasbourg Enzheim (SXB), will be operated by Hop! with AirFrance (AFA) code sharing on these flights, with the exception of flights to Italy and the Netherlands, that will continue to operate under a wet-lease agreement on behalf of AirFrance (AFA). All three regional carriers will continue to operate flights on a wet-lease basis from both Paris (CDG) and Orly on behalf of AirFrance (AFA) on domestic and international routes.

AirFrance (AFA) (CEO), Alexandre de Juniac has told "Pros du Tourisme" that (AFA) would not be interested in increasing its 2.78% stake in Air Mauritius ((IATA) Code: MK, based at Mauritius Sir Seewoosagur Ramgoolam International airport (MRU)) (MAU). A plan to intensify the cooperation between the two carriers had been discussed by Mauritian Prime Minister, Navin Ramgoolam and French President, François Hollande during a recent Mauritian state visit to France. De Juniac said that AirFrance (AFA)-(KLM) would not currently have the means to make further investments in other carriers and would have to focus on its own restructuring plan.

Etihad Airways (EHD) will wet lease an AirFrance (AFA) A340-300 on the Paris - Abu Dhabi route from May 15 to November 30. AirFrance (AFA) will operate the 272-seat airplane as one of (EHD)’s two daily Paris - Abu Dhabi return services, using cabin crew (CA) from both carriers.

AirFrance Industries (AFI) (KLM) (E&M) won a contract from Air Pacific (APC) to support its incoming A330/A340 fleet. (AFI) (KLM) (E&M) will provide fleet management services, component repair, and availability via dedicated logistics support, access to its dedicated regional A330 spares pool, and the supply of an A330 main base kit on Air Pacific (APC) premises.

(KLM) (CEO), Peter Hartman will retire in July and AirFrance (AFA)-(KLM) veteran, Jean-Cyril Spinetta is planning to exit by no later than April 2014.

“The supervisory board of (KLM) has decided to accept the retirement of (CEO) Peter Hartman and to ask Camiel Eurlings to take over from July 1 this year,” (AFA)-(KLM) Group Chairman & (CEO), Jean-Cyril Spinetta said.

Eurlings is (KLM) Managing Director & Executive VP of (AFA)-(KLM) Cargo. He is also a former Dutch Transport Minister and Member of the European Parliament. “(KLM) remains in very capable hands,” Spinetta said, adding that Hartman will continue to advise the company.

Hartman said he plans to spend more time with his grandchildren after his retirement. He will remain on the supervisory board of (AFA)-(KLM) and a number of other companies, and joked that his greatest challenge would be not taking on too much work.

(AFA)-(KLM) veteran, Spinetta is also planning for retirement. Spinetta said: “I also have a lot of grandchildren” and he added that he is also planning his exit. “The very last moment would be April 2014.” Spinetta returned to his former position as (AFA) (CEO) in late 2011 following the departure of former (AFA) (CEO), Pierre-Henri Gourgeon. Spinetta was later replaced as (AFA) (CEO) by Alexandre de Juniac, although he has continued as group (CEO) & Chairman.

AirFrance Industries (AFI) (KLM) (E&M) signed an engine support contract with Nordwind Airlines (NWD) covering its (CF6-80C2) engines powering six 767-300ERs. The contract covers engine repair and overhaul services and availability and lease support.

(AFA) has pushed back the timeframe for finalizing its commitment for 25 firm A350 XWBs until later in 2013. (AFA) had previously indicated the order would be finalized by the end of the first quarter.

In September 2011, Air France signed a tentative agreement for 50 airplanes, evenly divided between the A350 and 787. It has since finalized its 787 order, but the A350s have not yet been confirmed.
“I believe we will sign this in 2013,” (AFA)-(KLM) Group Chairman & (CEO), Jean-Cyril Spinetta said. “There is nothing urgent about this because these airplanes will not join our fleet until 2017. The talks are underway and in 2013 you should see a conclusion.”

Spinetta added that (AFA) has no plans to order A320neos. “For the time being, we have not expressed any intention,” he said, explaining that the re-engined twinjet will not offer “a major advantage” on (AFA)’s 700 - 800 nm sector lengths.

March 2013: The planned code share agreement between Oneworld (ONW) alliance member, Air Berlin (BER) and AirFrance (AFA) - (KLM), a SkyTeam (STM) alliance member, should be in place by April.

(BER) (CCO), Paul Gregorowitsch said that the process has been delayed as the two alliances work out partnership details. “But we have the commitment from (AFA) and (KLM) board of managers as well as from Etihad Airways (EHD). I hope from April we can implement it,” he said.

Code share agreements with majority owner (EHD) to Japan and China via Abu Dhabi have been implemented. “We are working on code share connections to India and, I hope, in two to three months, we can also establish a code share with Virgin Australia (VOZ) to cover the total Australian market,” Gregorowitsch said.

March 2013: AirFrance (AFA)-(KLM) will cut capacity on its underperforming medium-haul network this summer a further -5.3%, while boosting long-haul capacity +2%.

The strict capacity control, representing +0.3% growth overall, follows a sharp downturn in (AFA)-(KLM)’s full-year profitability. “Following the early adoption of certain measures during winter 2012 - 2013, all the actions decided as part of "Transform 2015" will be implemented in summer 2013,” the company said. (AFA)/(KLM) said its medium-haul network reorganization is “still underway,” leading to the -5.3% capacity reduction in capacity. Likewise, its regional flights (performed by BritAir, Regional and Airlinair) are being shifted to the new HOP! brand, which will launch March 31.

The group is channeling its long-haul capacity increase into emerging markets, including Africa (up +8.1%), Asia-Pacific (up +5.6%) and Latin America (up +3.4%). It will open new services to Montevideo, Kuala Lumpur, and Minneapolis, and boost frequencies to destinations including Bangkok, Guangzhou, Libreville, and Havana.

(AFA) will review its regional hubs this fall, following a lackluster 2012 performance from its domestic and medium-haul operations. In October 2011, (AFA) announced a “commercial offensive” from the French provinces aimed at challenging its low-cost carrier (LCC) rivals. This initiative involved the creation of four new regional hubs at Bordeaux, Marseille, Nice, and Toulouse. However, a number of routes and frequencies have already been cut, prompting speculation about possible base closures.

“Medium-haul losses were not reduced in 2012, in fact there was a slight increase over 2011 and above all this came from the regional bases,” (AFA)-(KLM) Group Chairman & (CEO), Jean-Cyril Spinetta said. He added that the company will take a “very strong look” at the regional bases in September to take stock of the situation.

However, he stressed this would simply be an evaluation of “where we are” and added that no base closures were expected. “I don’t have the impression that we will close the bases in September,” he said.

Marseille was the first to receive a capacity boost, followed by Toulouse and Nice in spring 2012 and Bordeaux last summer. Spinetta stressed it was too early to tell whether the strategy has been a success. Conversely, leisure operation Transavia (TAV) (which has arms in both France and the Netherlands) turned in a bright performance. Revenues rose +9% to €852 million/$1.1 billion, off the back of a +3% increase in capacity and a +4% uptick in demand. No profitability figures were given, although (AFA)-(KLM) said Transavia (TAV) is close to breakeven.

Transavia France will boost its fleet from eight to 11 airplanes this year, while (AFA)’s core Airbus (EDS) medium-haul fleet will be slashed by 16 airplanes this summer. Spinetta said the removal of the 16 airplanes will only lead to a “slight” drop in production because unions have agreed to greater productivity on the same pay.

“The [medium-haul] result for 2012 was quite obviously disappointing, but in 2013 we will post significant improvements,” Spinetta said. “Now we have renegotiated our collective agreements and identified new ways of operating the airplanes, all the structures are in place. This did not fully apply in 2012, but it will in 2013 and I am convinced this will improve.”

AirFrance (AFA) and WestJet (WJI) have entered a code share agreement offering (AFA) customers 10 new Canadian cities flown by (WJI). “(WJI) and (AFA) have had an interline agreement since July 2009 and we are very pleased to see this evolve to a code share” (WJI) VP Network Planning, Alliances & Corporate Development, Chris Avery said.

The AF code is now on select WestJet (WJI) flights connecting from Toronto to Vancouver, Edmonton, Saskatoon, Regina, Thunder Bay, Ottawa, Quebec City, Saint John’s, Moncton, and Halifax. Winnipeg and Calgary flights also have AF codes for both Toronto and Montreal connections to (AFA) direct flights to Paris.

This is the ninth code share for (WJI), which also has 21 interline relationships.

(AFA) and (KLM) have agreed to pay BRL14 million/$7 million to Brazil’s (CADE) as a settlement for alleged cargo cartel activity. (CADE) reporting Commissioner, Ricardo Machado Ruiz said (AFA), (KLM) and two individuals admitted liability and agreed to pay the fine, which was based on their revenues and “the extent of their participation in the alleged cartel.” The investigation, which has been ongoing in Brazil since 2006, related to fuel surcharges on cargo shipments. This is the first settlement (CADE) has signed as part of this investigation. In 2010, a draft agreement with Aerolíneas Brasileiras (ABSA) (now renamed TAM Cargo (BSB)) was rejected by (CADE)’s tribunal.

Similar cases involving a number of airlines are underway in other countries, such as Australia.

Jean-Cyril Spinetta and Leo van Wijk, who masterminded the first merger between two European flag carriers in 2004, are stepping down and handing over the reins of AirFrance (AFA)-(KLM) Group to a younger generation. The board of the French-Dutch group appointed Alexandre de Juniac, Chairman & (CEO) of Air France-KLM Group and Peter Hartman, Deputy (CEO), succeeding Vice Chairman, van Wijk, as of July 1.

De Juniac became Chairman & (CEO) of AirFrance (AFA) in 2011. He will be replaced in that role by (AFA) (CFO), Frederic Gagey. (KLM) named Camiel Eurling, former Head of KLM’s Cargo Operations and a former Dutch Transport Minister, to succeed Hartman as (CEO) & President of (KLM).

The reshuffle of the (AFA)-KLM Group’s top management is part of a broader plan to restructure the company’s governance and move toward a deeper integration of the two airlines to facilitate cost reduction, eliminate overlaps that still exist 10 years after the merger was completed and speed up decision-making. The new corporate structure was designed at the end of 2011, when the (AFA)-KLM Group and (AFA) (CEO), Pierre-Henri Gourgeon was ousted following deepening losses and increasing debt.

Veterans Spinetta and van Wijk were called back to return the group to solid footing. An in-depth restructuring and cost-cutting program, called "Transform 2015," was launched last year simultaneously at (AFA) and (KLM).

Spinetta, who will turn 70 in October, announced earlier this year he would step down in 2014, but the date has been moved forward by nine months.

In a joint statement, Spinetta and van Wijk said that "Transform 2015" is starting to “bear fruit” thanks to the agreements signed by both airlines with the representative trade unions and works councils. Also the group’s net debt decreased in 2012, and the new governance of the (AFA)-(KLM) Group will be in place by July. “Under these circumstances, we believe the timing is right for the new management team to take over in order to ensure the continuity of the group’s economic and financial recovery and the implementation of its new governance,” the executives said.

(AFA)-(KLM)’s recovery plan aims to reduce the company’s debt by -€2 billion/-$2.6 billion and improve its productivity by +20% to better compete with the low-cost carriers (LCC)s and Middle East operators. The plan will lead to the loss of -5,000 jobs at (AFA) and -1,300 at (KLM).

Virgin Atlantic (VAA) is likely to form a tie-up with SkyTeam (STM) Alliance members, AirFrance (AFA)-(KLM) and Alitalia (ALI), as part of a new joint venture (JV) with its new part-owner Delta Air Lines (DAL).

Late last year, (DAL) confirmed plans to acquire 49% of (VAA) from Singapore Airlines (SIA) and cement a (JV) with (VAA) by the close of 2013. The two carriers have applied for antitrust immunity (ATI) and (VAA) is mulling its alliance options, although (DAL)’s (SKT) Alliance is a likely choice.

However, it has now emerged the (ATI) could also include (AFA)-(KLM).
“The five-way (ATI) application is designed to ensure that (ATI) is granted widely enough to allow the efficient operation of both the Delta (DAL)/Virgin Atlantic (VAA) (JV) and the (DAL)/(AFA)/(KLM) (JV). It does not affect the scope of (VAA)’s (JV) with (DAL) — which is the core focus at this stage,” a (VAA) spokeswoman said.

(VAA) has currently only committed to enter a two-way (JV) with (DAL).

(AFA)-(KLM) Chairman & (CEO), Jean-Cyril Spinetta recently welcomed the (DAL)-(VAA) tie-up, saying it would boost the (SKT) Alliance’s transatlantic (JV). He also said it would be “logical” for (VAA) to join the (STM) Alliance.

AirFrance Industries (AFI) (KLM) (E&M) won a contract from Corendon Airlines (CDN) to provide engine maintenance services for its (CFM56-7)s. The contract includes two service types; core performance restoration, a maintenance procedure between a complete overhaul and on wing maintenance, and life cycle parts replacement, the replacement of used engine parts after a given number of cycles.

April 2013: Air France (AFA) has launched two new long-haul routes from its Paris (CDG) hub. On April 16th, (AFA) enhanced its South America route coverage, as it commenced a 4x-weekly service to Uruguay’s capital Montevideo (MVD). The flights will be operated via Buenos Aires (EZE) using 264-seat 777-200s and frequency will increase to 5x-times weekly from May 21st. (AFA) currently operates nine routes in eight countries in South America. However Bolivia, Ecuador, Guyana, Paraguay and Suriname still do not have direct air connections with France. In addition, on April 22nd, (AFA) inaugurated flights on the 10,400 km route to Kuala Lumpur (KUL). The 3x-weekly service now breaks Malaysia Airlines (MAS)’ long-running monopoly in the market, which currently serves the city pair with daily operations.

Air France (AFA)’s new regional operation, HOP!, has been well received by customers and staff, but it is too early to tell if it will translate into profits. HOP!, which launched March 31, is the consolidation of (AFA)’s three regional airlines (Brit Air, Regional and Airlinair) under the new brand. HOP! operates 98 airplanes ranging from 48 to 100 seats, serving 136 domestic and regional destinations. SEE ATTACHED - - "AFA-2013-04 HOP! EMB-190."

HOP! added a new domestic route on 27 April. The carrier, which already serves more than >70 domestic routes, now operates weekly flights from Lille (LIL) in French Flanders, to Figari (FSC) in southern Corsica. The route is operated using CRJ1000s until 21 September. In the first quarter of 2013, passenger numbers at Lille Airport are up over +>25%, making it one of Europe’s fastest-growing airports so far this year.

May 2013: Air France (AFA) - (KLM) Group reported a first-quarter net income of +€630 million/+$827.6 million, widened from a loss of -€379 in the year-ago 1st quarter.

Delta Air Lines (DAL) opens seasonal daily, New York (JFK) - Shannon 757-200 service on May 11, in cooperation with Air France (AFA)-(KLM). (AFA) introduces summer service 5x-weekly, Paris - Minneapolis A340-300 service on May 21. It also begins 6x-weekly, New York (JFK) - Keflavik 757-200 service on June 2, in cooperation with (AFA)-KLM. Also seasonal 6x-weekly, Atlanta - Venice 767-300 service opens June 2, in cooperation with Alitalia (ALI).

(AFA) begins 5x-weekly, Paris Charles de Gaulle - Buenos Aires - Montevideo service. (AFA) begins 3x-weekly, Paris (CDG) - Shanghai A380 service on September 2.

Air France (AFA) and Cyprus Airways (CYP) have entered into a new code share agreement. (AFA) will offer (CYP) flights on Larnaca - Paris, Larnaca - Athens, Athens - Heraklion, and Athens - Rhodes.

Flights between Paris and Larnaca will offer multiple connections via Athens on domestic flights within Greece, flown by (CYP). (AFA) passengers will benefit from connections at Paris Charles de Gaulle Airport, to and from Cyprus. (CYP) will sell (AFA) flights between Athens and Paris. Passengers on both carriers’ flights can earn miles in frequent flyer programs on all code share services. To offer convenient connections, (CYP) has moved from Terminal 1 at Paris Charles de Gaulle to Terminal 2, which is where (AFA) is located.

HOP!, the recently launched by Air France (AFA) regional brand, added three domestic routes connecting the mainland and the Mediterranean island of Corsica. On May 4, HOP! commenced low-frequency, single weekly services from Ajaccio (AJA) to Metz (MTZ) and from Calvi (CLY) to Mulhouse (MLH). Both services are operated using ERJ-145s until October. In addition, on the same day, HOP! inaugurated services on the 800 km route from Pau (PUF) to Bastia (BIA). Weekly flights on these routes are operated using Bombardier regional jets.

Air France (AFA) and (KLM) Royal Dutch Airlines have equipped two 777-300s for an in-flight connectivity trial through the end of 2013.
The trial (which was launched Wednesday on an Air France flight to New York and KLM service to Panama) will give passengers access to Wi-Fi, text messaging, email and live television via Panasonic Avionics’ eXPhone service and in-flight mobile phone operator AeroMobile.

(AFA)-(KLM) offer live TV as a complimentary service, streaming news, sports, airline and destination information through a specially designed in-flight website. However, it will charge €10.95/$14.13 per hour or €19.95 per flight for wireless Internet access, which will be enabled at 20,000 ft, and mobile phone text messaging and data will be billed via passengers’ own mobile phone contracts.

“Since we launched in 2008, over >17 million passengers have connected to AeroMobile in-flight and we’re seeing huge demand from consumers who want to stay connected in the air. We expect the number of airplanes offering our service to double over the next 12 months, as more and more airlines see the benefit of offering in-flight connectivity,” AeroMobile (CEO), Kevin Rogers said.

Air France Industries ((AFI) (KLM) Engineering & Maintenance will support Afriqiyah Airways (AQY)’s (CF6-80E1) engines on (AQY)'s two A330-200s.

Petra Airlines (PET) has signed a contract with Air France Industries (AFI) (KLM) Engineering & Maintenance covering component support for two A320s now and a third airplane by year end. The agreement includes flat-rate repair services and flight-hour pool access.

June 2013: Air France (AFA) - (KLM), which has a historically strong position in Africa, continues to expand services in Africa and Brazil.

(AFA) begins summer service on Paris Charles de Gaulle - Montevideo, 5x-weekly, and – Kuala Lumpur, 3x-weekly.

Carriers operating to France have been asked to slash their schedules by -50% on June 11 - 13, as air traffic controllers walk out in protest against the "Single European Sky" (SES). France’s Directorate General for Civil Aviation (DGAC) said several unions are planning a three-day walkout, which is expected to disrupt traffic throughout the country.

Europe’s airlines have come out largely in favor of the Single European Sky (SES) II+ package released by the European Commission (EC) as French Air Traffic Control (ATC) strikes continue.

“The (DGAC) has asked airlines to reduce their scheduled flights at Charles de Gaulle, Orly, Beauvais, Lyon, Nice, Marseille, Toulouse and Bordeaux airports by -50% for the days of Tuesday June 11, Wednesday June 12 and Thursday June 13, 2013,” said the (DGAC). It added that the protest centers on the European Commission (EC)’s Single European Sky project.

The Paris Air Show is to be held June 17 - 23 at Le Bourget airport.

The French government is reducing its stake in Aéroports de Paris (ADP), which controls Charles de Gaulle and Orly airports, as it raises money to offset its financial problems. The government owns 54.5% of (ADP), while state investment body, (FSI) holds a further 5.6%. This figure will be reduced by -9.5% (3.9% from the government and all of (FSI)’s 5.6%), leaving the government a 50.5% stake.

Potential purchasers must declare their intentions before June 25 and enter bids no later than June 28, (ADP) spokesman, Jérôme Marmet said. At least two buyers are expected to bid. The shares will not be sold directly on open market, but through a private equities agreement reserved for institutional investors. The move is part of a French government initiative to sell shares in public companies to replenish its coffers and reduce public debt.

Based on (ADP)’s market capitalization of €7.6 billion/$10 billion, the sale of 9.5% would raise some €690 million. However, Marmet said this type of transaction is normally undertaken at a discount to the market price.

(AFI) (KLM) (E&M) and IndiGo (IGO) are increasing cooperation on their A320 component support contract.

(KLM) (E&M), has a new contract with French regional airline HOP!, which includes long-term support of 26 Embraer E170s and E190s. Spairliners has 10 regional airlines under contract. Spairliners is a joint venture (JV) of (DLH) (LTK) and (AFI).

July 2013: The Air France (AFA)-(KLM) Group reported a first-half net loss of -€793 million/-$1.05 billion, narrowed from a deficit of -€1.27 billion for the same period last year. Revenues were up +1.3% at €12.3 billion. Operating costs dropped -0.6%, mainly due to a -4.5% reduction in fuel costs and a -1.1% trimming of personnel costs. Staff numbers dropped some -3,500.

Air France (AFA) begins seasonal, Paris - Panama City service on November 25.

AirFrance - (KLM) - Martinair Cargo (MTH) began Abu Dhabi service. It is offered on 747 services as a stop on India and Asia routes.

Air France Industries (AFI) (KLM) (E&M) and (KLM) Cityhopper (AUK) have signed a maintenance agreement covering (AUK)’s Fokker F 70s. In addition to heavy maintenance checks, the contract includes modification work. The work will be carried out by (KLM) UK Engineering.

HOP!, the regional brand of Air France (AFA), increased its seasonal domestic offering on July 13th with the launch of services on the 1,100 km route from Caen (CFR) in north-western France to Figari (FSC) in Corsica. Weekly Bombardier CRJ700-operated flights are offered until the end of August.

August 2013: Air France (AFA) is flying Paris (CDG) - Erbil, Iraq through September 15 on a code share with Middle East Airlines (MEA).

Air France (AFA) - (KLM) has appointed Jacques Le Pape as Executive VP Corporate Secretary. He also becomes a member of the Group Executive Committee. Pape is former General Inspector in the French Finance Ministry Inspection Office.

Air France Industries (AFI) has named Anne Brachet as President, replacing Frank Terner, who moves to President of (AFI) (KLM) Engineering & Maintenance, which will steer its strategy and business development at Group level. Operational management of the businesses will remain the responsibility of Engineering & Maintenance Executive VPs of the two airlines.

Mattijs ten Brink has taken over as Managing Director and Chairman of Netherlands-based leisure carrier Transavia Airlines (TAV), part of the Air France (AFA)-(KLM) group. A veteran of the group, most recently serving as its Senior VP Cargo Sales & Distribution, ten Brink assumed his new role on August 1st, replacing Bram Gräber, who has become Air France (AFA)-(KLM)'s Executive VP Passenger Strategy.

AirAsia X (ASX)has extended its contract with Air France Industries (AFI) (KLM) Engineering & Maintenance for component support on its fleet of A330s and A340s. The extended agreement includes an additional seven A330s (one new, six leased) and now covers component repairs, pool access and logistics services for a total of 32 A330s and two A340s.

The initial contract, signed in 2009, applied to a single leased airplane, but has been extended twice in order to support the expansion of (ASX), including 25 new A330s ordered from Airbus and two A340s.

(AMG) Flite Components, a subsidiary of Aero Maintenance Group, which is a wholly owned AirFrance Industries (AFI) (KLM) (E&M) subsidiary, will support and repair radomes on Spirit Airlines (SPR)’s more than >50 A320-family airplanes. The multi-year agreement places spare radomes at key (SPR) maintenance locations and provides repair and full overhaul services for all (SPR) radomes.

September 2013: AirFrance (AFA) began 3X-weekly, Paris (CDG) - Shanghai (PVG) A380 service on September 2.

Air France (AFA) is preparing to roll out a fresh wave of restructuring measures, including further voluntary redundancies, to combat continued weakness in its cargo, short- and medium-haul flying.
“The continued rationalization of the offer, notably in short-, medium-haul and cargo activities, as well as more targeted workforce reduction measures will be necessary in 2014,” an (AFA) spokeswoman said in an emailed statement.

(AFA) has already struck a deal with its unions, committing to no mandatory redundancies in 2014. However, it confirms that a new voluntary departures plan is under study beyond the cabin crew (CA) initiative, which is already underway. “The actual figures could represent a little over half the excess staff count identified in 2012. Previously, the number of excess staff stood at 5,100 full-time equivalent positions. The accompanying measures would be comparable to those already in place, i.e., non-replacement of natural departures, voluntary departures and part-time positions or leave without pay,” (AFA) said.

The latest cost cuts will be discussed with (AFA)’s staff council September 18 and the proposals will be announced internally October 4, when consultation on the new measures will begin.

(AFA) has presented an update on its "Transform 2015" recovery program, which includes a potential 2,800 layoffs in 2014, and a boost to TransAvia France (TVF) activities.

(AFA) - (KLM) has appointed Warner Rootliep as General Manager UK & Ireland; Nicolas Henin as new Commercial Director UK & Ireland; and Gijs van Popta as Head of Sales.

(AFA) is studying a proposal from the Democratic Republic of Congo (DRC), which wants to create a new joint venture airline for the country. “The Democratic Republic of Congo authorities have contacted AirFrance (AFA) on the subject of providing technical assistance or a partnership with a view to creating a national airline. (AFA) is studying with interest the proposal.”

All airlines certified in the (DRC) are currently banned from flying to the European Union (EU) under the European Commission (EC)’s Safety List.

Lufthansa (DLH) subsidiary, Brussels Airlines (EBA)/(DAT) previously attempted to set up an airline in the (DRC), named "airDC," in partnership with Hewa Bora Airways (now re-named Fly Congo (EXD)). Although the airplanes were sourced and painted in airDC livery ahead of a planned early 2008 launch, the airline never began operations. AirDC was slated to fly 737s and BAe 146s from Kinshasa N’Djili Airport on a domestic and continental network.

INCDT: A330-203 (CF6-80E1A3) (498, /02 F-GZCG), was involved in serious turbulence that has resulted in French investigators seeking improvements to convective weather detection capabilities - - SEE ATTACHED - - "AFA-2013-09 - INCDT A330-203."

AirFrance (AFA) has launched a full internal investigation and is planning legal action after bags containing over a tonne of cocaine were covertly loaded on to one of its airplanes. The airplane, which was carrying 254 passengers, departed Venezuela on September 10 and arrived in Paris Charles de Gaulle on September 11, when the drugs were seized.

“The bags checked in on this flight by (AFA) staff in Caracas all corresponded to passengers on board and 13 pieces of baggage corresponded to passengers who had traveled on a previous flight [“rush baggage” procedure]. The unidentified bags were introduced in an illicit way somewhere along the loading chain of containers due to be boarded onto the airplane,” (AFA) said. It is unclear whether the weight of the bags containing the drugs was accounted for on the airplane’s load sheet.

In response to the incident, (AFA) has launched a probe across all its divisions and has stepped up its loading chain monitoring at certain unnamed destinations. (AFA) also said it intends to take the case to a civil court. “The internal investigation is continuing and (AFA) is fully cooperating with the authorities within the framework of the current investigations,” (AFA) said.

Air France (AFA)’s Station Manager in Venezuela has been arrested and detained, although (AFA) said this is normal procedure and “it does not imply any kind of responsibility, nor any role in this affair.”

Air France Industries (AFI) (KLM) (E&M) will support Air Canada (ACN)’s 11 new (GE90)s on five 777s. (ACN) had previously chosen (AFI) (KLM) (E&M) to provide exclusive support for 39 (GE90) engines on 18 airplanes.

Air France (AFA) took delivery of its ninth A380. (AFA) is expecting to take its 10th A380 in 2014. Its A380 network comprises Johannesburg, Los Angeles, New York (JFK), Shanghai Pudong, Tokyo Narita, and Washington DC.

October 2013: Air France (AFA) is celebrating its 80th anniversary with a year of dedications. (AFA) was inaugurated at Le Bourget Airport on October 7, 1933 and was formed by the merger of Air Orient, Air Union, Société Générale de Transports Aériens, the (CIDNA) and Aéropostale.

Celebrations for the upcoming 12 months include the 80th anniversary logo painted on an Airbus A380 and an A320, and monthly articles in the Air France (AFA) magazine on its cultural history as well as short stories by famous authors. Anniversary products will be offered to (AFA) customers on in-flight items.

Shown ON ATTACHED PHOTO - - "AFA-2013-10 - 80 YEARS" are some of the Air France (AFA) fleet from the 1980s, including Boeing 737-200, 727-200, 747-100, an Aérospatiale-British Aerospace Concorde, Airbus A300B4 and an ATR 42.

Congratulations Air France (AFA)!

Air France (AFA) - (KLM) reported a third-quarter net profit of +€144 million/+$195.7 million, down -51% on last year’s third-quarter figure of +€296 million. However, Chairman, Alexandre de Juniac pointed to a growing operating profit of +€634 million for the quarter, up +29% from +€491 million year-over-year.

Air France (AFA) has confirmed it will launch 3x-weekly, Paris Charles de Gaulle (CDG) - Brasilia services, starting March 31 using a 777-200. The 777-200 will be configured with 309 seats, of which 35C are in business class, 24PY in premium economy and 250Y in economy. “Latin America is one of [the] long-haul markets we are focusing on and [we] want to increase our presence there,” (AFA) - (KLM) Chairman & (CEO), Alexandre de Juniac said. The enhancements to the Brazilian services come ahead of the country hosting the 2014 World Cup football (soccer) tournament, which starts in June 2014.

Additionally, (AFA) is considering plans to introduce the A380 on its Paris (CDG) - São Paulo Guarulhos (GRU) services in the first part of 2014, pending government and São Paulo airport approval. Emirates (EAD) President, Tim Clark and Lufthansa (DLH) Passenger Airlines (CEO), Carsten Spohr said that both carriers are also working on landing rights for the A380s, but (GRU) lacks the proper infrastructure for the A380.

From March 30 2014, (AFA) will stop using a 432-seat 747-400 for night flights to Rio de Janeiro from Paris. The jumbo will be replaced by a 381-seat 777-300. (AFA) - (KLM) will offer more than >40 weekly flights between Brazil and its Paris (CDG) and Amsterdam hubs. Meanwhile, (KLM) is extending its fifth weekly flight between Amsterdam and Rio de Janeiro beyond October 27, for the 2013-2014 winter season.

Air France (AFA) will launch daily, Paris Charles De Gaulle - Jakarta 777 service on March 30, 2014.

INCDT: Air France (AFA) A330-203 (CF6-80E1A3) (443, /01 F-GZCB) was involved in an incident April 13, 2011 as described in the attached "FLIGHT INTERNATIONAL" report - - "AFA-2013-10 - A330 INCDT REPORT."

Air France (AFA) celebrates its 80th birthday this week, amid claims by Alexandre de Juniac, (AFA) - (KLM) Group Chairman & (CEO), that it risked dying or “becoming a small regional carrier” were it not for the latest cost saving plans ("Les Echos," October 7th, 2013). Now, he says, (AFA) “is on the way to being saved”. He is counting on new restructuring measures that were presented to (AFA)’s works council to restore the financial health of the bigger and more troubled of the group’s two main airlines.

In the 1st half 2013, the "Transform 2015" program achieved profit improvements of +EUR100 million, but the group conceded that (AFA) would not achieve its breakeven target in 2013. It said that additional measures would be needed to improve results in the cargo division and in (AFA)’s medium-haul operations.

As expected, the measures include a new voluntary redundancy plan, a reorganisation of the French regional bases, a reduction in (AFA) freighter capacity, cuts to (AFA)'s point-to-point medium-haul network and growth for (LCC) subsidiary Transavia France (TVF). Are even these measures radical enough to restore (AFA) to a sustainable profit path?

AirFrance (AFA)’s recent unveiling in Paris of a new coach class seat and other onboard enhancements is emblematic of (AFA)’s long-term strategic plan to better compete against domestic and international carriers in a tough operating environment.

November 2013: Air France (AFA) - (KLM) reported an improved operating result for 3rd Quarter 2013 and confirmed its aim to increase 2nd Half 2013 operating profit by the same year-on-year amount as in 1st Half 2013. It has provided more details on the additional restructuring measures previously announced relating to headcount reduction and planned capacity in medium-haul and cargo.

However, while the group expects losses in medium-haul and cargo to reduce significantly in 2014, it does not expect to see the full impact of these measures until 2015.

As a result, it has pushed back its net debt reduction target by one year and focused its 2014 (EBITDA) target at the lower end of its previous range. Unfortunately, targets that start to slip have a habit of becoming more slippery.

Air France (AFA) - (KLM) has given Alitalia (ALI) until November 14 to agree to strict conditions that must be met before it participates in (ALI)’s capital increase. “We will help (ALI), but under very strict industrial, social and financial conditions,” (AFA) - (KLM) Chairman & (CEO), Alexandre de Juniac. “If these conditions are met by November 14, we can consider a strengthening of our partnership. If not, we will not follow.”

De Juniac insisted (ALI) must be run as a “normal business” and subjected to a “strong restructuring.” (AFA) - (KLM)’s prerequisites include (ALI) shrinking its medium-haul network, stabilizing its long-haul flying and completely restructuring its debts. “(AFA) - (KLM) is not in a position to have very deep pockets to finance everything,” De Juniac said.

(AFA) - (KLM) is (ALI)’s primary shareholder with a 25% stake. De Juniac struck out at (ALI) for not involving (AFA) - (KLM) in its refinancing discussions. “As primary shareholder, we would have liked to have been involved during the course of the negotiation, rather than discovering the results at the end of the discussion,” he said.

However, an (AFA) - (KLM) spokeswoman denied reports that it is calling on (ALI) to slash -5,000 jobs.

Air France (AFA) commenced operations on its 8,665 km sector to Panama City Tocumen (PTY) on November 25th. The 3x-weekly 777-200 service from Paris CDG (CDG) is in addition to the daily flight flown by partner (KLM) from Amsterdam Schiphol. The uncontested route to Central America’s largest passenger airport expands the partnership’s network to Central and South America.

Kenya Airways (KEN) and AirFrance (AFA) - (KLM) signed an expanded joint venture (JV) for passenger and cargo services, effective January 1st, 2014. The two carriers will add new routes, in addition to those currently served in The Netherlands, France and Kenya: London - Nairobi, Amsterdam - Entebbe/Kigali, Amsterdam - Lusaka, and Harare, and Amsterdam - Kilimanjaro/Dar es Salaam.

(AFA) offers daily A380 Paris (CDG) - San Francisco beginning March 2014 and throughout the summer season.

Air France (AFA)’s A380 touched down at Cancun Airport for the very first time on November 27th as part of (AFA)’s 80th anniversary.

Air France (AFA) now indirectly controls 100% of French regional Airlinair after quietly acquiring a 60% stake, which was previously held by Airlinair (CEO), Lionel Guerin, during the creation of HOP! - - SEE ATTACHED - - "AFA-E190 HOP OPS - 2013-11."

December 2013: Air France (AFA) - (KLM) is expanding services in Africa as it expects the airline industry to grow in the region. (AFA) - (KLM) Chairman, Alexandre de Juniac said, “Growing in Africa with partners is important. In East Africa, for example, we are doing this with Kenya Airways (KEN), our partner within the SkyTeam (STM) Alliance. But we have additional plans. One, we are helping [Ivory Coast start-up] Air Cote d’Ivoire (VRE) and are participating in a project in Central Africa.”

(AFA) will start 2x-daily, Paris (CDG) - Stavanger Embraer EMB-170 service from March 31, 2014. (AFA) increases A330-200 Pointe Noire - Paris (CDG) service to 6x-weekly beginning March 31, 2014. It also will begin 3x-weekly Brasilia - Paris (CDG) 777-200 service on March 31. (AFA) is planning A380 Sao Paulo - Paris (CDG) service in 2014. It also will begins 777-300 service on its daily, Paris - Rio de Janeiro flight.

(AFA) plans to increase its presence in Japan by adding flights to Tokyo Haneda from March 30, 2014. The new route is in addition to its current flights to Tokyo-Narita. (AFA) will now offer twice-daily flights from Paris to Haneda (one during the day, and one night flight to Tokyo-Haneda, as well as one daily frequency to Tokyo-Narita).

By offering a day and a night flight, AirFrance (AFA) said it becomes the first European carrier to offer two services to Haneda. The day service will be operated by a 309-seat, Boeing 777-200; the night service will be on board a 303-seat 777-300ER.

In the current winter schedule, (AFA) operates a daily Airbus A380 and a Boeing 777-300ER service to Narita. (AFA) will continue with one daily Paris Charles de Gaulle - Tokyo Narita service from March 30. “Growth for (AFA) will continue on long-haul routes and new routes will continue to be launched. In the same way, we are restructuring our medium and short-haul networks to accelerate its recovery as part of our restructuring project Transform 2015,” (AFA)-(KLM) Chairman, Alexandre de Juniac said.

(AFA) recently launched new services to Panama City, and is eyeing a stronger presence in Latin America and Africa. In regions where Air France (AFA) has a weak presence, local partnerships like with Etihad (EHD) should be strengthened, de Juniac said.

“(AFA)-(KLM) is the leading long-haul network on departure from Europe with over >13% of seat capacity between Europe and the rest of the world, far ahead of its main rivals,” de Juniac added.

Germany’s Intro Aviation has put in a firm offer for AirFrance (AFA)’s Irish regional airline, CityJet following months of discussions.

(AFI) (KLM) (E&M) will provide Saudi Arabia’s Alpha Star Aviation Services with repair services and access to a spares pool for A320 and A340 components on its (VIP) fleet.

January 2014: SEE ATTACHED - - "AFA-2014-01-2013 TOP WORLD AIRLINES-A/B."

Air France (AFA) increases service on Paris (CDG) - Kuala Lumpur to 4x-weekly 777-200 service. Summer service, Paris (CDG) - Singapore increases to 10x-weekly from June 17 - August 30. Beginning March 30, (AFA)’s daily flight to Singapore continues on to Jakarta with 777-300s.

(AFA) commenced operations on the 800 km intra-European route from London City (LCY) to Nuremberg (NUE) in German Bavaria on January 27th. The service operates with 11 weekly frequencies using B Ae 146s. Christine Ourmières, CityJet’s (CEO), said: “Nuremberg is a key business hub in Europe, given its position as the capital of Germany’s industrial heartland. It is the head office location for many of Germany’s multi-nationals such as Siemens, Puma, and Adidas and it plays host to several international trade fairs.” Previously, the route was operated by Lufthansa (DLH) since November 2007, but the service was then withdrawn only two seasons later.

(AFA) will wet-lease 747-400s from Corsair International (COR) next summer season to operate a weekly service between Paris Orly and Ajaccio in addition to four daily flights currently operated with its own A321-200s and Air Corsica ((IATA) Code: XK, based at Ajaccio) (CCM) A320-200s on the route. The flights with the 533 seat high density 747-400 will operate on Friday afternoons between July 4 and September 5.

Air France (AFA) has agreed to help Air Mauritius (MAU) in its bid to join the SkyTeam (STM) Alliance under a renewed and extended partnership between the two carriers.

“As part of this new partnership, (AFA) is reaffirming its commitment to provide its full support to (MAU) in its aim to join the global airline (STM) Alliance,” (AFA) said.

(AFA) was one of (MAU)’s founding partners and code shares with the carrier on links between Paris and Mauritius. Under the renewed agreement, (AFA) will also provide Air Mauritius (MAU) with a wide range of management expertise, including Commercial Operations, Cost & Revenue Management, Procurement, and Maintenance.

Air France (AFA) has been an (MAU) shareholder since it was founded in 1967 and today it holds an 8.5% stake (2.78% directly and 5.72% indirectly) in (MAU).

The partners have signed two cooperation agreements, one in 1998 and another in 2008, which has just been renewed and extended.

Air France (AFA) (which operated a special Airbus A380 flight from Paris to Africa’s Abidjan on January 28) is considering making it a regular service. The special A380 service flew to the International Forum for Investments in Côte d'Ivoire. Abidjan is the third-largest French-speaking city in the world and is the economic center and former capital of the Ivory Coast.

If (AFA) decides to include regular A380 service for the 2014 winter season, it would be the second destination on the African continent to be served by the A380 after Johannesburg. (AFA) has strengthened its presence in Abidjan since summer 2013 by increasing capacity from seven to 10 weekly flights.

Air France (AFA) (KLM) Chairman, Alexandre de Juniac said last June that operating regular A380 service to Abidjan “depends on local authorities and [whether] adjustments [can be made] to the airport infrastructure.”

February 2014: Air France (AFA) - (KLM) remains heavily in the red despite halving its net losses in 2013, but forecasts a “return to the path of profitable growth in 2014.”

The Franco-Dutch group turned in net losses of -€349 million/-$478 million, a considerable improvement on 2012’s deficit of -€696 million, on revenue that was +0.4% higher at €25.5 billion.

Capacity (ASK)s grew +1.6% to 272.4 billion, while traffic (RPK)s were up +2.4% to 228.3 billion. Load factor for the group stood at 83.8% LF, up +0.6 point on 2012.

Long-haul represented 81% of the group’s traffic and 79% of capacity, with traffic up +2.5% and capacity up +2.4%, respectively. Medium-haul, which has been a long-standing problem for (AFA) in particular, showed a +1.7% rise in traffic (RPK)s and -1.2% reduction in capacity (ASK)s, raising load factor +2.2 points to 76.8% LF (a clear indication of the positive effects of "Transform 2015”) the Group said.

Cargo continued to suffer from weak global trade flows and overcapacity. Full-year revenues dropped -7.9% to €2.82 billion. To cope, the group reduced its full freighter capacity -11.5%, compared to an initial planned reduction of -6%. However, due to an increase in belly capacity in the passenger fleet, the overall drop in freight capacity was just -2.7%. Traffic dipped -4.6%, leading to a -1.3 point drop in cargo load factor to 63.2% LF.

Low-cost carrier (LCC) subsidiary, Transavia (TAV) turned in a -€23 million loss, compared to breakeven last time (the result of political unrest in some of its Mediterranean destinations plus launch costs of new routes).

“2013 marked an important stage in the Group’s turnaround,” Chairman, Alexandre de Juniac said. “We are clearly benefiting from the successful implementation of new working conditions and of the industrial plans adopted in all our businesses. As a result, we returned to a positive operating result despite the persistently challenging environment, generated robust free cash flow and reduced debt beyond initial targets. The additional measures announced in October 2013 are being implemented in medium-haul and cargo, and will start to bear fruit in the second half.

“While continuing to focus on strict cost discipline, we are also preparing the group’s future, with a major product upgrade at both (AFA) and (KLM), the ongoing adaptation of our medium-haul offer and the strengthening of our long-haul network. The (AFA) - (KLM) Group is undergoing a profound transformation, and I am confident we will return to the path of profitable progress in 2014 and beyond,” de Juniac said.

Air France (AFA) and Air Malta (MLT) signed a code share agreement starting March 30. (AFA) will place it code on Air Malta (MLT) Airbus A319/A320 18x-weekly services from Malta to Paris Charles de Gaulle and Orly, plus Malta - Lyon.

Air France (AFA) - (KLM) will take a $100 million stake in Brazilian low-cost carrier (LCC) (GOL) (GOT) as the Franco-Dutch group seeks to increase its interests in South America. The deal, part of which will see (AFA) - (KLM) buying (GOL) shares worth $52 million, or 1.5% of the Brazilian company’s value, will include an extension of a 2009 code sharing arrangement that allows (AFA) and (KLM) to place their codes on 28 (GOL) flights operating from Rio de Janeiro and São Paulo to Brazilian destinations. (GOL) (GOT) will place its codes on Brazil - European services.

The agreement will see the three airlines coordinate their sales forces and enhance cooperation in airplane maintenance, including engines, (APU)s and on board equipment.

Despite a recent blip, Brazil’s economy has been growing rapidly and will be further boosted over the next two years by the 2014 soccer World Cup and the 2016 Olympic Games taking place in the country.

(AFA) - (KLM) described the move as “a long-term strategic partnership.” (GOL) already has a strategic cooperative agreement with Delta Air Lines (DAL); (DAL) is a major partner of (AFA) - (KLM) and the USA and European carriers are members of the SkyTeam (STM) alliance. “We are pleased to bring our forces together with (GOL), a leading company in Brazil,” (AFA) - (KLM) (CEO), Alexandre de Juniac said. “We believe that this comprehensive strategic agreement will create value for our company and for our customers, and significantly strengthen the commercial position of (AFA) - (KLM) in the region.

“Brazil, host of the World Cup football and 2016 Olympic Games, has a growing business and leisure traffic. This collaboration is part of our strategy to build strong [long-term] partnerships in regions with high potential.”

(AFA) plans to start a new 3x-weekly service from Paris Charles de Gaulle to Brasilia from March 31, and also plans to start operating the Airbus A380 on its Rio and São Paulo sectors.

Since its inception in 2001, (GOL) has won nearly 40% of the Brazilian domestic market. It operates 141 Boeing 737NGs on a network of 51 destinations in Brazil and 10 countries around Central and South America.

Air France ((IATA) Code: AF, based at Paris (CDG) and (KLM) Royal Dutch Airlines (KLM) ((IATA) Code: KL, based at Amsterdam) parent, (AFA)-(KLM) (CEO), Alexandre de Juniac said that a planned investment in Alitalia ((IATA) Code: AZ, based at Rome Fiumicino) (ALI) by Etihad Airways ((IATA) Code: EY, based at Abu Dhabi International) (EHD) could strengthen his airline's plans to re-invest providing certain restructuring conditions are met. In his interview with the "Financial Times," Mr de Juniac said he was keeping (AFA)'s option to invest in Alitalia (ALI) "open." “(EHD) brings new money and also a co-operation in the East. It is something that is changing the business case,” he said. He added that (AFA) would wait for the outcome of talks between the Italians and the Emiratis before playing its hand. Despite (AFA)-(KLM) now holding only a 7% stake in (ALI), Mr de Juniac said a cut in ties would be detrimental to both parties, but more so on the Italians' part. “I think we are an even more important partner for them [Alitalia] than they represent for us. It would be detrimental to both companies if our links were cut, but probably slightly more detrimental for Alitalia (ALI),” said Mr de Juniac.

Air France (AFA) management has confirmed that negotiations taking place with (AFA) pilot (FC) union (SPAF) make it believe an agreement will be reached soon. (AFA) also said that it did not expect a planned strike by (SPAF) pilots (FC) would impact its flight services.

(SPAF) has called for strike action between February 22 and February 25. However, French law mandates that an airline is given at least 48 hours’ notice of strike action, enabling it to adapt it schedules.

An (AFA spokesperson said that this was sufficient time to put non-striking pilots (FC) in place and ensure a normal schedule.

If agreement is reached with (SPAF), it will enable the company to continue developing Transavia France (TVF) Paris Orly this year. (TVF) is part of Air France Group’s "Transform 2015" restructuring plan and aims to increase Air France (AFA)’s European presence.

(SPAF), a minority union, did not sign the "Transform 2015" restructuring plan.

Myanmar Airways International (BRM) has contracted with (AFI) (KLM) (E&M) to provide engine support for the (CFM56-5B)s on its Airbus A320s.

Air France Industries (AFI) (KLM) (E&M) has contracted with Royal Jordanian (RJA) for component support on 13 A320s, including Main Base Kit, pool access and component repairs on a per-flight-hour basis.

TAROM (TRM) has designated Air France Industries (AFI) to provide component support services for nine ATR 42s and ATR 72s.

(AFI) (KLM) (E&M) subsidiary (EPCOR) is licensed to offer Maintenance Repair & Overhaul (MRO) services for Boeing 787s with the (APS 5000) auxiliary power units manufactured by Hamilton Sundstrand. The offer includes repair and maintenance, warranty repairs and spare supplies. In the second half of 2014, (EPCOR) will open a 787 test facility.

Air France (AFA) currently operates 240 airplanes, and serves 93 countries, 194 destinations, 297 routes and 1,115 daily flights.

March 2014: Air France (AFA) launched 6x-weekly Paris Charles de Gaulle - Rangoon via Bangkok service. The Paris - Bangkok sector is operated with a Boeing 777-300, with an onward connection on a Bangkok Airways (PGB)’s Airbus A320 on a code share basis. (AFA) will also add daily Paris Charles de Gaulle - Hong Kong Airbus A380 service from June 9 to October 25.

(AFA) will increase overall capacity +1.2% over the forthcoming summer season, with most growth focused on long-haul routes at the expense of middle-haul sectors. In what it described as “a still fragile economic environment,” (AFA) said summer 2014 would see the gradual introduction of upgraded cabins, which will be designed to move the company’s image and cabin service upmarket.

The first Boeing 777-200 equipped with new seats in business (C), premium-economy (PY) and economy (Y) class will operate from Paris to New York (JFK) in June. The first 777-300 equipped with new cabins will follow in the fall.

The increase in capacity, driven by emerging countries, is focused on Latin America and Southeast Asia, where (AFA) will add two new routes to Brasilia and Jakarta. South and Central America will see a +7% capacity uptick compared to 2013. From June, there will be 4x-weekly flights to Lima, while the Montevideo via Buenos Aires service, launched last summer, will become daily.

In Asia, capacity will rise +2.6%, with the launch of double-daily flights to Tokyo Haneda, which will improve connections to (AFA)’s domestic network partner Japan Airlines (JAL)/(JAS).

Elsewhere in long-haul, (AFA) will increase capacity +3.1% on the lucrative North Atlantic route, with a daily Airbus A380 service to San Francisco. Additional capacity will be introduced with Boeing 747 Atlanta and Toronto service over the summer.

Offsetting the long-haul growth, medium-haul capacity will be reduced a further -2.3%.

A shuffling of African frequencies following 2013’s sharp increase in capacity to the continent will result in an overall capacity reduction of -1.3%. There will also be a -3% reduction in capacity to the Middle East.

By developing code shares with partners such as Brazil’s (GOL) (GOT), the USA’s Delta Air Lines (DAL) and Canada’s WestJet (WJI), 13 new destinations will be available to Air France (AFA) customers in North America, 20 in South and Central America, and 28 in Asia.

In France and Europe, where growth remains weak, (AFA) said it will continue to optimize frequencies, both structural and seasonal. To develop intra-European traffic at its Paris-Charles de Gaulle hub, (AFA) is changing several flight schedules to create a connecting wave of mid-evening flights dedicated to medium-haul destinations, without impacting long-haul connections.

Air France Industries (AFI) (KLM) (E&M) will repaint five Etihad Airways (EHD) Boeing 777-200s, including stripping, sanding, painting and coating of the fuselage, vertical fin, stabilizer, engines and wings. The airplanes will be liveried in the (AFI) (KLM) (E&M) paint shop at Schiphol airport between February and April 2014.

Air France (AFA) - (KLM) has selected (GE) Aviation (GEC) (GEnx-1B) engines to power 25 Boeing 787s on order plus 12 leased 787 Dreamliners. (GE) said the total engine order is valued at more than >$1.7 billion. (AFA)- (KLM) and (GEC) also signed an agreement allowing (AFA) - (KLM) to offer maintenance, repair and overhaul (MRO) services for (GEnx-1B) engines.

“Under this agreement, (AFA) - (KLM) will be licensed to perform maintenance and overhaul work on the (GEnx-1B) engine and (GEC) will provide technical support and assistance on overhaul workscoping and component repair licenses, comprehensive material support and training.” (GEC) noted Air France (AFA) was the first operator of the (GE90-115B) engine on the 777-300ER.

April 2014: Air France (AFA) - (KLM) reported a net loss of -€608 million/-$843 million for the quarter, slightly narrowed from the -€641 million loss for the same period in 2013. Revenue dipped -2.2% to €5.55 billion.

(AFA) - (KLM) said the first-quarter results were affected by the Easter holiday period moving to the second quarter and noted that foreign exchange losses were -€117 million. (IATA) (ITA) said earlier that the Venezuelan government had failed to honor a commitment to allow the repatriation of blocked airline funds at fair exchange rates.

First-quarter operating costs dropped -3.4% (2.3% ex-fuel). Traffic (RPK)s rose +2.1% to 53 million on a capacity (ASK) increase of +1.3%, resulting in a load factor of 82.8% LF, up +0.6 points.

Breaking down the results by airline, Air France (AFA)’s revenue dropped from €3.64 billion to €3.56 billion, while that of (KLM) dropped from €2.12 billion to €2.08 billion. Net profit figures were not given for the individual airlines, but (AFA)’s operating results narrowed from a loss of -€370 million to a deficit of -€279 million. (KLM)’s operating results widened from a loss of -€163 million to a loss of -€174 million.

The group said that, while the "Transform 2015" restructuring program is having a positive effect and remains on track, “the general operating environment remains tough.” It remains committed to its objective of attaining an (EBITDA) of around €2.5 billion for the full year 2014.

Air France (AFA) has launched 3x-weekly, Paris (CDG) - Brasilia Boeing 777-200 service. (AFA), due to increase Paris Charles de Gaulle - Panama Boeing 777-200 service, from 3x to 4x-weekly, will increase to 5x-weekly on October 27.

Air France (AFA) and partner (KLM) Royal Dutch Airlines said they have accepted a firm offer from Germany's Intro Aviation GmbH for the purchase of Cityjet ((IATA) Code: WX, based at Dublin International) and its subsidiary, (VLM) ((IATA) Code: VG, based at Antwerp). (AFA) and CityJet will pursue their commercial co-operation as part of a new industrial plan, which will involve the launch of Cityjet-branded flights from London City to various European destinations. In addition, Cityjet will continue to operate flights on behalf of Air France (AFA) out of Paris (CDG).

The closing of the transaction for the CityJet shares should take place in April 2014. Intro Aviation says among its most urgent requirements will be the upgrading of Cityjet's outdated fleet of ARJ-85s and (VLM)'s Fokker F 50s.

May 2014: Air France (AFA) will offer 3x-weekly, Paris (CDG) - Abidjan Airbus A380 winter service.

Brazil’s antitrust regulator has given the green light for AirFrance (AFA) - (KLM) to invest $100 million in its newly extended partnership with Brazilian low-cost carrier (LCC) (GOL) (GOT).

(GOL) (GOT) said it has received “unconditional approval” for its tie-up with (AFA) - (KLM) from the Conselho Administrativo de Defesa Economica (CADE). (AFA) - (KLM) and (GOL) unveiled their plans to form an “exclusive long term strategic partnership” on February 19, including an extension of their existing code share, as well as sales force and maintenance coordination.

Under the agreement, (AFA) - (KLM) will invest $52 million to acquire a 1.5% stake in (GOL). It will also plough a further $48 million into the partnership. The move forms part of (AFA) - (KLM)’s strategy to increase its interests in South America.

Air France Industries (AFI) (KLM) (E&M) has expanded its contract with Afriqiyah Airways (AQY) for total care of a third airplane type, its Airbus A330s. It also added a third A319 to its contract with Air Côte d'Ivoire (VRE) for component and engine support, exclusive airplane inspections and engineering plus line maintenance.

Air France (AFA) has released details of its new first class (F) "La Premiere suite," a curtained-off private cabin that will debut on its 19 Boeing 777-300s from September - - SEE ATTACHED - - "AFA-FIRST CLASS-2014-05."

Each 777 will progressively be equipped with four of the new suites, which will contain a 24-inch/61 cm high-definition touch screen, an ottoman for visitors, a private wardrobe and a seat which converts to a 2.01 m-long and 77 cm-wide lie-flat bed, topped by a separate mattress.

The suites will have direct access to the central aisle and will be equipped with thick curtains, held back with leather ties. “Once the curtains are closed, the passenger has the feeling of being alone at home, totally enclosed in their private cabin. The La Premiere suite then becomes a vast, totally private space, with three square meters available for each guest,” Air France (AFA) said, unveiling the new product in Shanghai.

News of the (AFA) product comes hot on the heels of Etihad Airways (EHD)’s new premium offering, which is also heavily themed on the idea of a private, hotel-style suite. B/E Aerospace is the supplier for (AFA)’s La Premiere, as well as (EHD)’s A380 Residence, A380 First Apartment and its 787 First Suite. In addition, Emirates Airline (EAD) is reportedly in the advanced stages of upgrading its top premium classes on its Airbus A380s and Boeing 777s to include bedrooms and room service.

La Premiere was designed by Priestmangoode and branding agency Brandimage. “Our new La Premiere suite, from among all our new products and services, is the one that best represents our commitment to service excellence and a French travel experience. It illustrates our intention to recover and our global ambition,” (AFA) Chairman & (CEO), Frederic Gagey said.

Airbus (EDS) celebrated the 40th anniversary of the entry into service (EIS) of its first airplane (the A300B) operated by Air France (AFA) as the launch customer - - SEE PHOTO - - "AFA-2014-05-40TH YR A300B EIS." The A300B was the world’s first twin-engine wide body. Starting in 1974, 878 A300/A310 family airplanes have been manufactured. More than >400 of these airplanes are still in service with 65 customers.

June 2014: Air France Industries (AFI) (KLM) (E&M) has received an extended maintenance contract from Surinam Airways (SUR) on an Airbus A340-300 with full airplane maintenance and overhaul to include engineering services, "A" checks, engine and component repair with pool access, and a Main Base Kit.

See video "AFA-New Interior Cabins" - -

July 2014: The Air France (AFA) - (KLM) Group reported a first-half net loss of -€614 million/-$827 million, narrowed from a net loss of -€799 million reported for the same period in 2013.

The group also narrowed its first-half operating loss to -€207 million, more than halving the -€448 million loss reported for the year-ago period.

(AFA) said its "Transform 2015" plan was on track to achieve cost reduction objectives, but warned the economic environment remained weak as currency fluctuations continued to impact revenues. In addition, overcapacity was hurting yield on key long routes, especially to North America and Asia; cargo recovery remained slower than expected.

(AFA) - (KLM) Chairman & (CEO), Alexandre de Juniac said: “Despite a tough operating environment, the Air France - (KLM) Group maintained the momentum of its recovery in the first half of 2014 by halving its operating loss. Quarter after quarter, our results are consistently reflecting the benefits of the productivity measures implemented under Transform 2015.”

Although first-half revenue was down -1.8% to €12 billion, the group said this included €287 million of negative currency impact.

First-half operating costs were reduced -3.6%, with fuel costs down -5.9% and employee costs down -3.6%.

In terms of passenger business, first-half (ASK)s were up +1.2%, while (RPK)s were up +2.5% to 112 billion. Load factor was up +1% point to 83.8 LF.

De Juniac said Transform 2015 would be completed in a few months and had “fully delivered on structural cost reduction leading to a significant improvement in the financial situation.” He said the program would be replaced with a five-year successor plan currently being fleshed out. “While maintaining the imperatives of competitiveness and the ongoing strengthening of the Group’s financial position, the successor plan will also focus on growth,” de Juniac said. “The plan will thus be named "Perform 2020," and we will give a detailed presentation of its main components in September.”

He said Perform 2020 would put long-haul operations at the center of a global network of partners, focus on a strong brand portfolio addressing all customer segments, rationalize short- and medium-haul business, including a strengthened low-cost operation centered on the accelerated development and repositioning of its Transavia (TAV)/(TVF) subsidiary, and a more balanced portfolio of service activities, such as Cargo, Maintenance and Catering.

Looking forward, (AFA) - (KLM) said: “Delivery on the Transform 2015 plan is fully on track. However, the operating environment remains tough. Under these conditions, the 2014 (EBITDA) is expected to be between €2.2 and €2.3 billion. Strong capital discipline will enable the group to remain on track in terms of debt reduction and achieve its objective of €4.5 billion in net debt in 2015.”

In June, (AFA) - (KLM) carried 7.2 million passengers, up +3.9% compared with June 2013. A +1.8% increase in capacity was met by +2.9% traffic growth, pushing its load factor up by a +0.9% point to 86.2% LF. Unit revenues remained stable. However, cargo traffic slipped -4.3%, exceeding a -1.7% capacity reduction, pushing (AFA) - (KLM)’s average cargo load factor down -1.6 points to 60.7% LF.

“While not representing a turning point in market trends, June traffic figures, as well as bookings for July and August, nevertheless reflect the overcapacity on certain long-haul routes (notably North America and Asia) with the attendant impact on yields. This comes on top of the persistently weak cargo demand and the challenging situation in Venezuela identified in the first quarter,” (AFA) - (KLM) said.

Venezuela has been undergoing a period of political and economic uncertainty. According to (IATA), this has led to currency controls that have affected airlines including Delta Air Lines (DAL), American Airlines (AAL) and Air France (AFA).

(AFA) also announced the completion of its ground staff voluntary redundancy scheme, which forms part of its "Transform 2015" restructuring plan. “With 1,772 validated applications, corresponding to 1,660 full-time employees (FTEs), the plan almost reached its objective of 1,826 departures. A plan aimed at 700 (FTE)s among the cabin crew (CA) has just begun,” (AFA) said.

AirFrance (AFA) made a return to Jakarta (CGK), having stopped services to the Indonesian capital in October 2004. The 11,549 km sector, which originates at (AFA)’s Paris (CDG) hub has an intermediate stop in Singapore. Started on July 9th and flown by the SkyTeam (STM) Alliance carrier’s 300-seat 777-300s, the daily route will face no direct competition.

Air France (AFA) has launched a new private jet service for its La Première premium customers to connect onward from its Paris Charles de Gaulle hub. (AFA) has teamed up with French business jet operator Wijet on the service, mirroring earlier moves by some of its European rivals, including Lufthansa (DLH).

However, (AFA) said its product will be considerably cheaper than its competitors. “This new service is on offer at particularly competitive fares, -40% cheaper than the fares offered on the market.”

The service will use four-seat Cessna Citation Mustang-type airplanes and will only be available for (AFA)’s premium passengers connecting to long-haul flights.

Earlier this year, Air France (AFA) unveiled its revamped La Première suite, a curtained-off private cabin that will debut on its 19 Boeing 777-300s from September.

Air France Industries (AFI) (KLM) (E&M) has reached an agreement with Virgin Atlantic (VAA) to provide component support services for its new fleet of Boeing 787s that begin service later this year. The contract covers component and (APU) maintenance, along with pool access and the supply of a Main Base Kit holding in London.

(AMOS) has been selected by Air France (AFA) regional HOP! to provide its Maintenance Repair & Overhaul (MRO) software’s multi-entity functions for its entire group.

August 2014: AirFrance (AFA) announced that it is operating its Airbus A380 on the Paris Charles de Gaulle - Miami route starting from December 1 until March 28, 2015. The service is operating daily, except Wednesdays, from January 5, 2015 to February 1, 2015. The (AFA) A380 offers 516 seats in four cabin classes: 9F seats in La Première, 80C seats in Business, 38PY seats in Premium Economy, and 389Y seats in Economy. (AFA) currently operates a fleet of 9 A380s.

Barfield, a new Air France Industries (AFI)-(KLM) Engineering & Maintenance (AFI KLM E&M) subsidiary, following its recent acquisition from Sabena Technics (SAB), has installed Johann Panier as its (CEO).

September 2014: The Air France (AFA) - (KLM) Group will phase out five Martinair (MTH) Boeing MD-11F freighters and internally reallocate up to 400 staff, as it strives to hit cargo breakeven by 2017.

Air France (AFA) has detailed its new "Perform 2020" strategy, the successor to its "Transform 2015" program, targeting a 10% (EBITDAR) margin by 2017.

"Transform 2015," which aimed to slash -€1 billion/-$1.3 billion from (AFA)’s costs, will come to a close at the end of the year, paving the way for "Perform 2020." The new program’s targets are for a return on capital employed (ROCE) to 9 - 11% and hit a net debt/(EBITDAR) ratio of below <2.5 by 2017, through expansion into growth markets and the restructuring of loss-making divisions.

This will be achieved by expanding its passenger hub, centralizing point-to-point operations under a single business unit, substantially growing its Transavia (TAV)/(TVF) leisure unit, trimming down its dedicated freighter operations and expanding its maintenance business. These initiatives will be coupled with more productivity and cost control efforts.

“By 2020, we will have built an air transport group focused on a leading long-haul network at the heart of global alliances, with a portfolio of unique brands, restructured short- and medium-haul operations, with a reinforced presence in the low cost segment in Europe, leadership positions in cargo, maintenance and catering, and a significantly improved risk profile both operationally and financially,” (AFA) - (KLM)’s Chairman & (CEO), Alexandre de Juniac said.

This will be supported by the reinforcement of strategic partnerships and strict capacity discipline, with just 1% - 1.5% (ASK) growth planned for 2015 - 2017. (AFA) also plans to revamp its products and services, with an announcement expected on September 23.

As expected, its point-to-point network and cost base will be restructured into a single business unit, combining HOP! and (AFA) point-to-point operations, to hit operating breakeven by 2017. The dedicated cargo fleet will also be slimmed from 14 to just five airplanes by the end of 2016 for a return to breakeven by 2017, versus a -€110 million/-$142 million loss in 2013, or a -€200 million loss including belly capacity.

Meanwhile, Transavia (TAV)/(TVF) will open new bases outside France and the Netherlands. “By 2017, (TAV)/(TVF) will rank among the leading low-cost carriers (LCC)s in Europe, operating a fleet of 100 airplanes and carrying more than >20 million passengers. This business should contribute an additional +€100 million of (EBITDAR) in 2017. With profitability being impacted by ongoing ramp-up costs, the group is targeting operating profits by 2018,” said the company. (TAV)/(TVF)’s growth will be financed by the €339 million, raised from the partial sale of (AFA)’s Amadeus shares on September 9.

(AFA)’s Maintenance arm is also slated for growth, particularly its engines and components work, with potential acquisitions on the cards. “This business should generate an additional +€50 million to +€80 million of (EBITDAR) in 2017, depending on acquisitions,” the Group said.

There will also be a continued push to shave -1% to -1.5% from its unit costs each year. (AFA) said this will go “beyond traditional efforts” and will include the ongoing restructuring of uncompetitive activities and further staff productivity negotiations.

Air France (AFA) - (KLM) plans to grow the fleet of its low-cost (carrier) subsidiary, Transavia (TAV)/(TVF) to 100 airplanes by 2017, the group’s Chairman & (CEO) Alexandre de Juniac stated.

(AFA) pilots (FC) have now joined flight attendants (CA) in demanding the right to refuse to fly to destinations in the West African countries affected by Ebola.

The move threatens to further isolate three nations most ravaged by the disease (Guinea, Liberia and Sierra Leone).

According to "Le Monde" in Paris, François Hamant, a representative of the pilot (FC)'s union in France, filed an official government complaint. It demands a commitment from (AFA) management that any pilot (FC) or flight attendant (CA) not wanting to fly to the Ebola-impacted West African nations can refuse to make the flight without suffering any adverse consequences, either financial or disciplinary.

Julien Duboz, spokesman for the Syndicat des Pilotes d'Air France (AFA), the French union of airline pilots (FC), confirmed to "Le Monde" that while the union is aware of some (AFA) pilots (FC) who have refused to fly to West Africa, the defections are "rare."

As (WND) reported, the World Health Organization (WNO) recently warned that Ebola is "expanding exponentially" in West Africa, with the problem so severe in Liberia, that many thousands of new cases expected in country over the coming three weeks.

Last Friday, (WHO) reported in Geneva that one in 10 health-care workers treating Ebola patients in West Africa has become infected with the disease.

Nevertheless, (WHO) has repeatedly issued advisories contending airline pilots (FC) and crews are protected by rigorous screening to keep from flights any passenger showing symptoms of Ebola.

(WHO) maintains that while the incubation period for Ebola can be as long as 21 days, those infected with the disease who are not yet displaying symptoms represent no danger of transmitting it.

Duboz explained to Le Monde that (AFA) so far has not had a single incident of a member of the aircrew ((FC) - (CA)) or a passenger becoming infected with Ebola, despite a continuation of regularly scheduled (AFA) flights to West African destinations.

Dr Margaret Chan, the (WHO) Director General, has repeatedly insisted that disruptions in commercial air travel to West Africa will impede the efforts of international health organizations to contain and combat the disease. "We must be careful not to characterize Ebola as 'an African disease,'" Chan said.

She warned that the stigmatization of the disease with any racial classification would be detrimental to the UN effort to control it. "This is an international issue, a global threat," she continued. "We need to make sure Ebola patients and Ebola-affected countries aren't stigmatized and isolated."

Air France (AFA) said that it was operating slightly less than half its normal flights due to the start of strike action by pilots (FC). It planned to operate an estimated 48% of services Monday September 15. On Monday afternoon, it said that figure would drop to 40% Tuesday as some 60% of pilots (FC) joined the industrial action, but warned that further disruption was a possibility.

The strike is in response to the loss-making airline’s plans to cut costs, particularly on short-haul routes. (LCC) subsidiary, Transavia (TAV)/(TVF) is due to be expanded considerably, sparking worries among mainline pilots (FC) that this could be at the expense of their own positions.

With pilots (FC) planning to strike between September 15 - 22, (AFA) is recommending passengers due to fly within that period to postpone their journeys until after the end of the disruption.

French labor law requirements on unions, allow (AFA) to estimate the effect of strike action on a day-to-day basis, some 48 hours in advance. (AFA) intends to communicate the latest situation to passengers the day prior to their scheduled departure.

If a flight is canceled, customers will receive financial compensation of €25O/$320 for domestic flights, €400 for European services and €600 for long-haul flights.

(AFA) may operate only around 40% of its normal scheduled flights on September 17th, as a week-long strike by pilots (FC) enters its third day.

The estimate of the number of operating services is the same as on September 16th, when around 60% of (AFA)’s pilots (FC) took industrial action to protest at (AFA)’s plans to cut costs, particularly by increasing the role of its low-cost Transavia (TAV)/(TVF) subsidiary. Staff from the mainline airline fear this will adversely affect their working conditions.

(AFA) will find out Saturday, September 20th, if it faces a longer than anticipated industrial action, as pilots (FC) threatened to make their week-long industrial action indefinite.

The increased threat to (AFA)’s services and finances came after (AFA) - (KLM) Chairman & (CEO), Alexandre de Juniac said he would curtail the expansion of low-cost carrier (LCC) subsidiary, Transavia France (TVF) if a settlement with pilots (FC) cannot be reached.

Questioned about (AFA)’s relations with pilots (FC) following the release of its new Perform 2020 restructuring plan, he said he found it odd the pilots (FC) were striking over plans he said were aimed at bringing growth to the loss-making company.

(AFA) wants to grow Transavia France (TVF) to help fight the threat from (LCC)s, which have had a serious impact on (AFA)’s short-haul operations. Pilots (FC) fear that pay and working conditions with Transavia (TVF) will be less favorable than on the mainline carrier.

“We are trying to conclude the negotiations to avoid conflict, which is not good news for the company,” de Juniac said. “I find this situation strange because we are proposing (especially to (AFA) pilots (FC)) new jobs, growth and new airplanes, totally on a voluntary basis.

“In the past, 36 (AFA) pilots (FC) have applied to transfer to (TVF). They are still with (TVF) and they are quite happy, so this [type of transfer] is not unknown territory and they [the pilots (FC) who have transferred] are not complaining. “It is only a plus, a win-win for everybody, so I find it strange that we have a strike over a project for growth.”

However, if plans for Transavia France (TVF) are blocked, (AFA) would apply the brakes there. “We are aiming to negotiate a clever agreement to allow (AFA) pilots (FC) to come and work for (TVF), under (TVF) conditions. If we do not succeed, we will leave (TVF) as it is, at 14 airplanes, and we will probably accelerate the development of Transavia Europe (TAV).

“Unfortunately, by leaving Transavia France (TVF) in its current position, we will have to give strategic slots and strategic routes to our (LCC) competitors, which would be a pity. I would prefer to open these routes and to retain these slots for my colleagues, for (TVF), (AFA) - (KLM) employees and (AFA) - (KLM) pilots (FC).”

Meanwhile, Jean-Louis Barber, head of the (SNPL) pilots’ union, which makes up 77% of (AFA)’s pilots (FC), was reported by French media as saying the strike could become indefinite.

(SNPL) spokesman, Vincent Fournier said: “We'll find out on September 20th if the strike is extended to next week. However, there is a good chance that this is the case. “The pilots (FC) are in disagreement with the management of (AFA) on the strategy of the company in the short- and medium-haul. The disagreement is not on the corporate issues, but on the project.”

(AFA) said it had deployed around 7,000 staff to provide assistance to passengers caught up in the dispute.

(AFA)’s regional subsidiary HOP! and its partner (KLM) are unaffected by the strike action.

The heavily loss-making carrier estimates it is losing a further -€10 to -€15 million/-$13 to -$19 million every day the strike continues. (AFA) has to find alternative flights for passengers and pay compensation to those whose flights are canceled under European Union (EU) consumer legislation.

Pressure on Air France (AFA) management increased September 22nd as the pilot (FC) strike entered the second week. “Disrupting flight operations for seven days [will mean] catastrophic consequences for the company’s customers, staff and financial situation,” (AFA) said. It said the strike is generating an operating loss of up to -€20 million/-$26 million per day, plus customer compensations and the impact of gradual recovery in traffic following the return to normal operations. Once the dispute is over, the Group said it will update its (EBITDA) target for the 2014 financial year.

A spokesman for the French government was quoted in the media as saying financial damages for (AFA) could amount to €180 million if the strike continues through Friday. The strike is in response to the loss-making airline’s plans to cut costs, particularly on short-haul routes. Low-cost subsidiary Transavia (TAV)/(TVF) had been due to be expanded considerably, sparking worries among mainline pilots (FC) that this could be at the expense of their own positions.

Negotiations with pilot (FC) unions, notably (SNPL), have taken place daily. Since the beginning of the strike action, Air France (AFA) - (KLM) said Chairman & (CEO) Alexandre de Juniac and (AFA) (CEO), Frédéric Gagey have spent over >40 hours in meetings with pilot (FC) representatives.

(AFA) said it has been submitting new constructive proposals to resolve this conflict every day, but the pilot (FC) unions have not put forward any proposal demonstrating their willingness to find a solution. “Management can only note that talks have reached a deadlocked situation,” (AFA) said.

(AFA) has postponed plans to create Transavia subsidiaries in Europe (outside France and the Netherlands). A comprehensive negotiation and explanatory process with (AFA) and (KLM) unions will be set up as early as September 25.

(AFA) said the expansion of Transavia (TAV)/(TVF) in France is vital for (AFA) to defend its position at Paris Orly Airport. The project was presented to the unions of each staff category over a year ago, but had not been finalized. The pilot unions’ demand to use (AFA) pilots (FC) on the (TAV)/(TVF) network, employed under (AFA) conditions (and to replace the existing 44 Boeing 737s with Airbus A320s) would inevitably lead Transavia France (TVF) to failure, (AFA) said.

The compromise solutions proposed by management have all been rejected. “To remain in the race in Europe, we have no alternative than to rapidly expand Transavia (TAV)/(TVF). We are now taking every measure to explain and accelerate its growth out of France. The Air France (AFA) - (KLM) Group is reaffirming its aim of reaching a fleet of more than >100 Transavia airplanes by 2017,” de Juniac said.

(AFA) on September 23rd expects to operate 48% of flights. On September 22nd, it operated 41% of flights.

Air France (AFA) announced late Wednesday, September 24th it will “immediately withdraw” the Transavia Europe (TAV) project in a proposal to end the 10-day pilot (FC) strike, which is “heavily penalizing” (AFA), its staff and customers. In view of the concession, management has called on pilots (FC) to “return to work immediately.”

In addition to withdrawing Transavia Europe (TAV), Air France (AFA) said it will further develop Transavia France (TVF) “in competitive economic conditions and accompanied by the safeguards as discussed in the negotiations so far.”

According to an Air France (AFA) statement, “This balanced proposal meets the unions’ requirements by providing a renewed guarantee that there will be no relocation. It preserves the Transavia (TAV) development project, a ‘made in France’ solution to face the competition from foreign low-cost carriers (LCC)s and conquer this rapidly expanding market.” The statement went on to say the proposal “meets the needs of employees who want their company to get back on track” and “enables us to find an immediate outcome to this destructive conflict.”

(AFA) - (KLM) Chairman & (CEO), Alexandre de Juniac and (AFA) Chairman & (CEO), Frédéric Gagey jointly stated: “Our Transavia (TAV) project is a 100% pro-France project. It is about developing Transavia (TAV) to encourage growth in France and quickly create more than >1,000 jobs in France (including 250 pilot (FC) jobs). With the withdrawal of the Transavia Europe project, there is now no reason to strike, because there are no longer any concerns about relocation. We therefore call on the striking pilots (FC) to return to work immediately.”

October 2014: News Item A-1: Air France (AFA) - (KLM) reported third-quarter net income of +€100 million/+$127.2 million), down -32.4% from a +€148 million profit in the year-ago period, due to its pilot (FC) strike and overcapacity putting pressure on yields.

Speaking on the group’s third quarter results conference call, (AFA) - (KLM) (CFO), Pierre-François Riolacci said the 14-day pilots (FC)’s walkout had a “massive impact” on the third-quarter results. In total, it reduced revenues by -€416 million and caused a -€330 million hit to the group’s operating profit.

Riolacci also described the wider European market as “lack luster” and “sluggish.” Yields are volatile and coming under increasing pressure due to overcapacity, particularly on South American and Asian routes.

Third-quarter revenue fell -6.7% to €6.7 billion, but excluding the strike effect, remained stable. Operating costs fell -1.4% to €6.5 billion, producing an operating profit of +€247 million, down -61.5% from a +€641 million operating profit in the prior-year quarter.

Traffic fell -3.2% to 61.5 billion (RPK)s on a -4.1% decrease in capacity to 70.1 billion (ASK)s, producing a load factor of 87.7% LF, up +0.8 of a point.

“The strike led to the cancellation of an estimated 4,249 million (ASK)s (18% of September (ASK)s) and 213 million (ATK)s (16% of September (ATK)s) resulting in an equivalent cancellation of 4.75 billion (EASK)s,” (AFA) - (KLM) said in its results statement.

Yield dipped -5.3% to 8.15 cents as (RASK) lowered -4.4% to 7.15 cents and (CASK) increased +2.4% to 6.85 cents. Excluding the strike, (AFA) - (KLM) said its unit costs were down -1.2%, marking its tenth quarter of reductions.

Etihad Airways (EHD)’s plan to take a 49% shareholding in Alitalia (ALI) will dilute Air France (AFA)’s stake in (ALI) to less than <1%, according to Air France (AFA) - (KLM) (CFO), Pierre-François Riolacci.

Riolacci said the strike had added another €400 - €500 million to (AFA) - (KLM)’s net debt, which stood at €5.27 billion on September 30, widened from €5.35 billion at the end of 2013. “We can’t pretend nothing happened. There will be strong austerity in our investments. We will be revising down some of our capital expenditure and looking at our asset portfolio and our fleet to adjust it to the yield environment.”

While (AFA) - (KLM has no plans to adjust its current airplane orders, it may terminate or not renew some of its operating leases. “We have to decide how many airplanes we need for our long-haul operations. It is clear that is part of our budget discussions today,” he said.

Further savings will need to come from both (AFA) and (KLM), but Riolacci denied there were internal tensions at the group’s October 28 board meeting and categorically rejected suggestion of harsh cost measures and heavy layoffs. He added that Dutch media reports of the board being in crisis mode are “totally false.”

He declined to comment further on potential measures until discussions with unions have been concluded. Further information, along with an update on the "Perform 2020" plan, will be given at the release of the group’s full-year figures in February.

News Item A-2: Air France (AFA) hoped to reach a rapid solution with its pilots (FC) so it could start preparing for growth at Transavia France (TVF). “Talks with pilots (FC) were ongoing. However, (AFA) needed to move on quickly, as in order to launch new routes in April 2015 and add new airplanes, (AFA) needed to put tickets on sale by the end of the year, and recruit and train new pilots (FC) as early as November.”

(AFA) was forced to abandon its plans to create Transavia Europe in a desperate bid to end a two-week pilots (FC)’s walkout. (AFA) claimed its unions were later backing the development of Transavia France (TVF), although this remained a sticking point towards the end of the strike.

“The strategic interest of the company is, and must remain, the sole objective for everyone,” the (AFA) spokeswoman said.

Soon after, (TVF) (CEO), Antoine Pussiau sent a note reassuring and thanking (TVF)’s customers. “For several days, (TVF) was at the heart of the news. During this time, passengers demonstrated their commitment to (AFA). (AFA) said they would grow the company to offer more destinations, more frequencies and more services.

This summer, Transavia France (TVF) served 40 destinations from Paris Orly, 15 from Nantes, nine from Lyon, five from Lille and one from Strasbourg. The Air France (AFA) low-cost arm currently carries about 3 million passengers annually.

News Item A-3: The following is from Karen Walker's Air Transport World (ATW) Editor's Blog:

"The pilots (FC)’ strike may be over, but Air France (AFA) is still in danger."

(AFA) pilots (FC) have ended their two-week strike, which according to (AFA) was costing some €20 million/$26 million per day. But the real cost of this shameful outcome could be much higher.

(AFA) said, “the strike has been costly and damaging. It has lasted too long.” Sadly, this is all too true. To end the walkout, (AFA) was forced to abandon its low cost subsidiary, Transavia Europe strategy, even though it is still able to grow Transavia France (TVF) beyond its current fleet of 14 Boeing 737-800s.

What the pilots (FC) have really achieved through this strike is to put the very future of (AFA) in question. As sister publication, "Aviation Week" said in its editorial: “the retreat is a catastrophe for (AFA) - (KLM) Chairman/(CEO), Alexandre de Juniac, and could ultimately prove to be the same for the storied carrier.”

All around Europe, legacy carriers are doing battle every day to compete against (LCC)s new and emerging. It’s a trend that is extending to the transatlantic market, which has been a critical revenue provider for those same legacy carriers.

It’s not a trend that is going to reverse. (LCC)s are highly established in the USA, causing the same kind of aggravation for Asian legacy carriers, and as are the fast-growth carriers in emerging markets such as India and Brazil.

Legacy carriers have no choice: they simply have to address costs, improve productivity and rewrite the rule books (including labor agreements and what’s included in the base ticket price), to stay in business.

That’s not to say that management is blameless in the (AFA) dispute. Clearly, it took too long to get to this point, and the lines of communication are wanting at the company.

But what has happened at (AFA) is almost beyond belief. If the labor groups representing the (AFA) pilots (FC) cannot see for themselves, the danger they have put their members in, let’s hope the pilots (FC) themselves open their eyes before it’s too late.

The Air France (AFA) - (KLM) Group believes the effect of last month’s two-week (AFA) pilot (FC) strike could cost the group -€500 million/-$634 million in the current financial year.

(AFA) said unions are now backing the development of Transavia France (TVF), although this remained a sticking point toward the end of the strike.

In its September traffic report, the Franco-Dutch group reported a year-over-year drop of -16.3% in the number of passengers carried. Throughout the strike, (AFA) was typically operating just under half of its normal daily flights. It said the impact of the dispute on the third-quarter operating results is estimated to be -€320 to -€350 million. This figure includes lost revenue, net of the expenses avoided, together with all the additional costs incurred.

The group added that during the strike, it noticed a -1 to -2 point delay in fourth-quarter booking trends, although it is unable precisely to apportion responsibility for this between the strike and the underlying unfavorable demand trend seen since early summer. It believes part of this delay could be progressively reduced over the coming weeks.

Combining all these factors, (AFA) concludes the strikes could have an impact of around -€500 million on (EBITDA) for the 2014 financial year.

Later, the Air France (AFA) - (KLM) Group said the recent 10-day pilot (FC) strikes cost the company around €350 million/$447 million in the third quarter.

News Item A-4: In its forecast for the 2014 - 2015 winter season, the Group’s capacity expressed in (ASK)s is expected to grow by +0.7%, of which +0.1% will be for the passenger business ((AFA), regional subsidiary HOP! and (KLM)) and +13.3% for low-cost carrier (LCC) subsidiary Transavia (TAV).

(AFA) said long-haul capacity will be broadly stable (+0.3%) with very targeted development. This will include maintenance of the Paris - Brasilia service launched over the summer in partnership with (GOL) (GOT), additional Amsterdam - Atlanta flights, the start of Airbus A380 services to Abidjan, and ongoing development of its Tokyo Haneda route.

Short- and medium-haul capacity from the Paris Charles de Gaulle and Amsterdam Schiphol hubs will be slightly increased (+3.1%), driven mainly by growth at Amsterdam. Main developments will include the maintenance over the winter, of services launched over the summer from Amsterdam to Turin, Bilbao and Zagreb, and from Paris to Stavanger, as well as additional frequencies on Amsterdam - Bergen, Billund, Moscow, and Bordeaux.

As in the summer 2014 season, short- and medium-haul, point-to-point capacity will continue to be slimmed down (-11.3%) with, notably, further trimming of the schedules in provincial bases, and some frequency reductions on Orly - Bordeaux and Orly - Toulouse.

Transavia (TAV)/(TVF) capacity will be up +13.3%, with this growth concentrated on France (TVF).

News Item A-5: The European Commission (EC) is seeking input into whether SkyTeam (STM) Alliance members Delta Air Lines (DAL), Air France (AFA) - (KLM) and Alitalia (ALI) have unfair dominance on their transatlantic New York services.

This marks the latest step in a probe that was formally opened by the (EC) in January 2012. The investigation originally looked at whether all SkyTeam (STM) Alliance carriers had transatlantic market dominance, but later dismissed eight other alliance members to focus on just (AFA) - (KLM), Alitalia (ALI), and Delta (DAL). “The three airlines have offered to make landing and takeoff slots available at both ends of the Amsterdam - New York and Rome - New York routes to facilitate the market entry of competitors,” the (EC) said, inviting comments from third parties within a month of publication in the "Official Journal."

(AFA) - (KLM), (ALI) and (DAL) are also willing to allow rivals to sell tickets on their flights, facilitate connections and give access to their frequent flyer program on all three routes. “If the market test confirms that the proposed commitments remedy the competition concerns, the (EC) may make them legally binding on the companies,” the (EC) said.

The (EU) body is concerned that the “extensive cooperation” between (AFA) - (KLM), (ALI), and (DAL), which includes profit-sharing, as well as schedules, pricing and capacity coordination, could be pushing up premium fares between Paris and New York, in addition to premium and non-premium fares on the other two routes.

News Item A-6: Air France (AFA) has appointed Pierre-Olivier Bandet as Exective VP Chairman’s Office & Public Affairs from November 1. Since 2013 he has been VP of (AFA) Chairman’s office for Alexandre de Juniac and Frederic Cagey.

News Item A-7: Air France (AFA) is operating a series of flights powered by biofuels on its Toulouse - Paris Orly route between now and next September to showcase its "Lab’line For the Future" project.

(AFA) will operate one flight a week on the route using 10% sugar cane-based biofuel added to standard kerosene, with the aim of demonstrating to public bodies the need to develop an aviation biofuels industry in France.

(AFA) said it will use this route to present its “projects and achievements focused on the challenges of sustainable development.”

(AFA) Chairman & (CEO), Frédéric Gagey said: “By involving itself in research and implementing innovations such as biofuels, (AFA) aims to reduce the carbon footprint of its flights and to build more sustainable, more responsible and more environmentally friendly air travel.”

(AFA) has also signed a memorandum of understanding (MOU) to evaluate the new Taxibot system developed by Israel Aerospace Industries (IAI) and Paris-based (TLD) Group.

Taxibot is a semi-robotic, pilot-controlled vehicle, developed by (IAI) and manufactured by (TLD), to move airplanes between the gate and the runway, without using the main engines. Not only does it reduce fuel consumption, and thereby cost, but it also cuts emissions and noise in the airport environment.

Under the terms of the (MOU), (AFA) will analyze the potential technical, operational and financial benefits of the Taxibot on its wide body fleet operation at Paris-Charles de Gaulle (CDG) airport. A joint task force of (AFA), (IAI) and (TLD) will study this system’s impact on the (CDG) taxi flow, as well as Taxibot’s ecological benefits.

This (MOU) may be extended to testing feasibility with the cooperation of Aéroports de Paris (ADP) in the second quarter of 2015.

News Item A-8: Air France Industries (AFI) - (KLM) Engineering & Maintenance and Bombardier Aerospace (BMB) executives agree there is still some way to go before bonded repairs will be accepted on primary composite structures.

November 2014: News Item A-1: Air France (AFA) - (KLM) is stepping up its Canadian routes with the addition of two new services to Vancouver and Edmonton. The Vancouver link will be operated by (AFA) from Paris Charles de Gaulle using a Boeing 777-200, configured with 309 seats. The service will start as 3x-weekly on March 29, moving up to 5x-weekly on May 4, before reducing back to 4x-weekly on September 14.

(KLM) will be the operating carrier for the new Edmonton route. “(KLM) will be the first and only airline in continental Europe to connect Europe to the city of Edmonton,” (AFA) - (KLM) said.

(KLM) plans to offer 3x-weekly Airbus A330-200 services from May 5, increasing to 4x-weekly from June 22. “Both these route launches are a strong sign, reflecting the (AFA) - (KLM) Group's commercial offensive and its desire to strengthen its position to and from Canada,” said (AFA) - (KLM) Executive VP Commercial Passenger Business, Patrick Alexandre.

This winter, (AFA) - (KLM) will serve four Canadian destinations: Calgary, Montreal, Toronto, and Vancouver, along with a number of onward destinations through its WestJet (WJI) code share.

News Item A-2: Air France Industries (AFI) (KLM) (E&M) has been selected by Xiamen Air (XIA) to support the launch of its six Boeing 787s with component maintenance and overhaul services under a long-term contract. (XIA) is the seventh significant 787 operator and first Chinese one to choose the Maintenance Repair & Overhaul (MRO) organization for long-term 787 component support.

News Item A-3: Air France (AFA) has announced plans to bring together its short-haul point-to-point operations with those of its regional subsidiary, "HOP!" in a further bid to improve its position in the marketplace.

The new structure, to be known as "HOP! Air France," will come into existence at the start of 2015, with services beginning from the start of the summer season. Its objective is to reach profitability within three years.

It is the latest in a series of reorganizations aimed at bolstering (AFA)'s domestic and short-haul services. HOP! Air France is a combination of (AFA)'s three former regional airline subsidiaries, Brit Air, Regional, and Airlinair, which was launched less than two years ago.

Staff at Air France (AFA)'s point-to-point operation at Paray Vieille Poster and HOP! personnel from Rungis will be brought together at a single center at Montreuil, creating what (AFA) describes as a new, simplified structure.

(AFA) Chairman & (CEO), Frédéric Gagey said: "The short-haul activity is in competition with trains, cars and low-cost carriers (LCC)s. We need to restructure our company to be even more responsive, market-oriented and close to our customers.

"HOP! Air France provides a response adapted to the specific characteristics of the short-haul carrier activity and the travel needs of our customers. I am counting on the efforts of all staff to achieve the ambitious targets for this business."

Together, Air France (AFA)'s short-haul services and HOP! operate 800 flights daily, carrying 15 million customers annually.

News Item A-4: Air France (AFA) is in talks to upgrade its ATR fleet to the latest -600 variant and is looking to replace its Embraer (EMB) ERJ-145s and Bombardier (BMB) CRJ700s around 2020.

December 2014: News Item A-1: Air France (AFA) - (KLM) has revised downward its 2014 (EBITDA) target by a further -€200 million/-$245 million as its financial position worsens. (AFA) - (KLM) said it is considering further cost-cutting measures and is looking at a “significant scale back” in its investment plan.

The Franco-Dutch company’s board of directors issued the revised profit figure following a recent meeting in which they reviewed an updated financial outlook for fourth quarter of 2014.

The further deterioration in the group’s financial performance is due to a combination of several factors, including the continuing aftereffects of the 14-day Air France (AFA) pilots (FC)’s strike in the fall.

In late October, Air France (AFA) - (KLM) reported the dispute had cost it an estimated -€330 million in operating profit.

Another effect of the strike included higher than anticipated costs for interline invoicing, as Air France (AFA) re-booked passengers stranded by the strike on to other carriers.

Other factors behind the additional €200 million write-down included continuing persistent weakness in revenues in several long-haul markets. Additionally, new fiscal regulations mean the airline group will not recognize in its 2014 (EBITDA) a positive pension cost adjustment that was previously expected.

Although crude oil prices have recently tumbled, it has so far resulted in only a limited effect on fuel prices, due to factors such as the structure of procurement contracts and the group’s fuel hedging portfolio.

The group has previously announced it intends to revise its 2015 and 2016 business plans to take into account the consequences of the pilots (FC)'s strike and of the weaker unit revenue trend that has developed since the summer.

“The Perform 2020 dynamic is under way across all the Group’s activities, based on the imperatives of an ongoing improvement in competitiveness and strict financial discipline,” said (AFA) - (KLM) Chairman & (CEO), Alexandre de Juniac. “By significantly stepping up our cost-cutting efforts and adapting the investment plan, (AFA) - (KLM) can gain the resources and be well prepared to tackle 2015 despite the difficult competitive environment.”

News Item A-2: Air France (AFA) will improve its passenger product on medium-haul flights in a €50 million/$62 million investment plan in a continuing move upmarket as it aims to differentiate itself from competitors and improve the performance of mid-haul services.

News Item A-3: Air France (AFA) pilots (FC) have voted in favor of a new strategy for leisure arm Transavia France (TVF), which will partly replace the group’s thwarted attempt to create Transavia Europe. “We welcome the positive outcome of this consultation, which puts an end to a period of uncertainty,” (AFA) Chairman & (CEO), Frédéric Gagey said.

Part of (AFA)’s "Perform 2020" plan had been to create a third leisure unit (Transavia Europe) which would operate alongside Transavia France (TVF) and Transavia Netherlands (TAV), but (AFA) - (KLM) ditched the idea after a long and costly strike.

(AFA)’s pilots (FC) have now backed a tentative “draft development agreement” struck in October. Under the deal, over the next five years, Transavia France (tvf) will grow from 16 airplanes this summer, to 21 in summer 2015 and 37 Boeing 737s by 2019.

At the release of (AFA)’s third-quarter results last month, (AFA) - (KLM) (CFO), Pierre-François Riolacci said the shift to 21 airplanes “is a big number,” which will require careful commercial management to make sure it does not damage yields. This winter, Transavia France (TVF) will add +56% capacity.

The solution also allows for “integrated career management” for pilots (FC) at (AFA) and Transavia (TAV)/(TVF), including a joint seniority list and secondments between the carriers. This will help tackle overstaffing at the mainline carrier. (AFA) said more than >200 (AFA) pilots (FC) have already volunteered to fill 72 positions available at Transavia France (TVF).

(AFA) said 53% of its pilots (FC) approved the agreement. Its pilots’ union (SNPL) also backed the deal, with 60% voting in favor of the proposal. (SNPL)’s council is expected to approve the result during a subsequent meeting.

Transavia France (TVF) and Transavia Netherlands (TAV) added +8.3% overall capacity in the third quarter, driven mainly by (TVF), which grew +21.4%. Traffic rose +6%, and average load factor dipped -1.9 points to 91.8% LF. This produced a +7.6% increase in revenue, taking the total to €427 million/$531 million, resulting in an operating profit of +€62 million, —€4 million lower than the prior year. Unit revenue was down -0.6%, but up +0.5% in France, despite the rapid increase in capacity.

Over the first nine months of 2014, the two Transavia units (TVF)/(TAV) added +6.9% capacity, but this was met by +6.5% traffic growth, pushing average loads down -0.4 of a point to 90.3% LF and unit revenue down -0.8%. Revenue was up +5.9% to €861 million, while unit costs fell -0.7%. This produced a -€2 million operating loss for the nine-month period, -€14 million worse than the comparable period, which the group said was caused by the rapid ramp-up of Transavia France (TVF).

News Item A-4: Air France (AFA) inaugurated its fully renovated lounge December 8 at New York (JFK), located at Terminal 1.

News Item A-5: The French government will sell a 49.99% stake in Toulouse Blagnac Airport (ATB) to a Chinese consortium made up of state-owned Shandong Hi-Speed Group and Hong Kong-based investment firm, Friedmann Pacific Asset Management.

January 2015: News Item A-1: Qatar Airlines (QTA) & the (IAG): "Shifting sands in the global reach of the Gulf carriers" January 30, 2015 by Karen Walker in (ATW) Editor's Blog:

The announcement that Qatar Airways (QTA) has acquired a 9.99% stake in (BAB)/(IBE) parent company, the International Airlines Group (IAG) is an interesting development in the ongoing change in the international airline landscape prompted by the growth of the Gulf carriers.

(QTA) (CEO), Akbar Al Baker describes the taking of a stake in the (IAG), worth about $1.7 billion, as an “excellent opportunity to further develop our Westward strategy.” (IAG) (CEO), Willie Walsh said he was “delighted” about the investment, and opportunities to work more closely with (QTA).

There’s an interesting history to the (IAG) and (QTA) connection. Al Baker and Walsh are long-time, firm friends who each hold the other in high respect. In October 2013, (QTA) joined the Oneworld (ONW) global alliance, becoming the first of the major Gulf carriers to join a global alliance. British Airways (BAB), a founding (ONW) member, was (QTA)’s sponsor and Walsh spoke very enthusiastically about the importance of having (QTA) join. My understanding is that his enthusiasm was not matched by every (ONW) member (CEO).

Dubai-based Emirates (EAD), meanwhile, remains alliance-independent, but in 2013 it entered a five-year alliance with Qantas (QAN), another Oneworld (ONW) Alliance founding member. And Abu Dhabi-based Etihad Airways (EHD) owns a 29% stake in airberlin (BER), another (ONW) airline. (EHD) has its own version of an alliance, taking stakes in relatively small carriers and creating a constellation of airline equity partners that includes airberlin (BER), Air Serbia (JAT), India’s Jet Airways (JPL), Virgin Australia (VOZ), Air Seychelles (ASY) and Aer Lingus (ARL). Interestingly, the (IAG) wants to buy Aer Lingus (ARL), a move, which if it happens, would further tangle the (IAG)-Oneworld (ONW)-Gulf carrier web.

(EHD), of course, is also now a 49% owner of Alitalia (ALI) (to keep you on track with the alliance matings here, (ALI) is a SkyTeam (STM) Alliance member). But (QTA)’s stake in the (IAG) is the first time that one of the “Big Three” Gulf carriers has invested in one of the “Big Three” European airline groups of the (IAG), the Lufthansa Group and Air France (AFA) - (KLM).

It will be fascinating to see if the (QTA) - (IAG) deal marks the beginning of more such equity partnerships (within the caps of the (EU) airline ownership rules) between Gulf carriers and their European counterparts. The fact is that it’s becoming increasingly challenging for the “traditional” global hubs of Amsterdam, Frankfurt, Heathrow, and Paris to compete with the “modern” world hubs of Abu Dhabi, Dubai, and Qatar.

In the USA, meanwhile, there is growing awareness that what happened in Europe regards Gulf competition could happen in America. A campaign is being run by North America’s “Big Three” (American Airlines (AAL), Delta Air Lines (DAL) and United Airlines (UAL)) to try and get lawmakers to review "Open Skies" policies and the international air transport competitive landscape to take account of the rise of the Gulf carriers.

Flying under the radar so far in the shifting sands of air transport power houses is Turkish Airlines (THY), which is a Star (SAL) Alliance carrier and which has developed an extensive network, very large and modern fleet and highly successful global hub in Istanbul. It will be interesting to see whether that continues to be the case if, as Al Baker described it, a “Westward strategy” by Gulf carriers begins, in some eyes at least, to look more like a "Westward" invasion.

News Item A-2: Air France (AFA) has detailed plans for a further -800 voluntary layoffs. It is also considering delaying its Boeing 777 deliveries and has sold half its 4.4% stake in Amadeus.

While "Transform 2015" and lower fuel prices will deliver some benefits in 2015, a weaker unit revenue trend since the summer of 2014 has prompted the additional cuts.

(AFA) said the voluntary redundancy plan will affect “approximately 800” ground staff and cabin crew (CA). This will be coupled with “wage moderation and productivity efforts.”

Further information is expected at the release of Air France (AFA) - (KLM)’s full-year results on February 19.

The cuts also include a “downwards revision in fleet and capacity growth.” The (AFA) - (KLM) Group is still due to take delivery of five Boeing 777s in 2015, three for (AFA) and two for (KLM), but its deliveries from 2016 onward could be delayed.

“Nothing has been confirmed,” the (AFA) spokeswoman said. “The group may postpone some of its deliveries from 2016, but we don’t have any further information or details to give.”

Finally, (AFA) - (KLM) has raised +€327 million/+$378 million by selling half of its 4.4% stake in Information Technology (IT) firm Amadeus. The other 2.2% is being held by the Deutsche Bank under a hedging transaction which was sealed last November, although Air France (AFA) still owns these shares.

February 2015: News Item A-1: Air France (AFA) - (KLM) reported a full-year net loss of -€198 million/-$225.5 million, a marked improvement on a -€1.2 billion net loss for 2013, boosted by the completion of "Transform 2015."

“The full year 2014 results speak for themselves: Despite the challenging economic and competitive context, once corrected for the impact of the Air France (AFA) pilot (FC) strike, (EBITDA) is up by more than >50% in three years,” (AFA) - (KLM), Chairman & (CEO), Alexandre de Juniac said.

However, the group’s operating results were depressed by the sluggish economic environment, a €425 million hit from the 14-day Air France (AFA) strike last September and negative foreign exchange effects. Long-haul routes were also affected by overcapacity in the second half of the year.

This caused revenue to drop -2.4% to €24.9 billion, producing an operating loss of -€129 million, a sharp deterioration from the +€130 million operating profit it posted in 2013. On a like-for-like basis excluding the impact of the strike, (AFA) - (KLM), (CFO), Pierre-Francois Riolacci said the group had achieved a “strong reduction” in losses, with the group’s operating profit more than doubling to +€296 million.

Turning to individual airlines, (AFA)’s revenues were down -3.4% at €15.6 billion and operating losses nearly doubled to €314 million. However, excluding the strike, revenues were down just -0.4% at €16.1 billion. (AFA) would have delivered a +€99 million operating profit, compared with a -€174 million operating loss last year.

(KLM) generated €9.6 billion in revenues, -0.5% down on 2013, or +0.7% up on a like-for-like basis. Its operating profit dropped to €175 million, down from €301 million in 2013. The majority of (KLM)’s sales are outside the Netherlands, and (KLM) President & (CEO), Pieter Elbers said euro exchange rates had a “significant impact” on the (KLM)’s results.

“Air France (AFA) has achieved significant a cost savings improvement over the last three years. (KLM) also achieved a lot in the first two years, but this has flattened out. The revenue environment is volatile, so we need to have all our focus on our unit costs,” Elbers said.

Group traffic rose +0.5% to 229.3 billion (RPK)s on a -0.6% decrease in capacity to 270.8 billion (ASK)s, producing a load factor of 84.7% LF, up +0.9 point. Yield dipped -3.1% to 8.15 cents as (RASK) lowered -2% to 6.9 euro cents and (CASK) decreased -0.7% to 6.93 euro cents.

News Item A-2: Air France (AFA)’s new La Première Suite now flies regularly on flights AF010 and AF011 between New York (JFK) and Paris Charles de Gaulle. This is the first USA route to feature the new 32 sq ft private space in the sky for first-class (F) passengers. The suite includes a fully life-flat bed over six-and-a-half feet long with retractable armrests and a 24-inch-wide table for fine dining.

News Item A-3: Air France (AFA) - (KLM) will delay the arrival of up to 12 airplanes, as it seeks to slash -€600 million/-$683 million from its capital expenditure plan for the next two years.

March 2015: See new air safety video - -
http://www.wcarn.com/news/42/42397.html

April 2015: News Item A-1: Air France (AFA) - (KLM) has recorded another heavy deficit for the first quarter, with a restated net loss of -€504 million/-$547 million, compared to a figure of -€485 million a year ago. Revenues were up marginally at €5.7 billion, compared to €5.6 billion last time.

The figures were restated after the Franco-Dutch group reclassified its former CityJet subsidiary (divested in May last year) as a discontinued operation.

Breaking down the results, Air France (AFA) recorded a -2.1% increase in revenues to €3.63 billion and an operating loss of -€233 million, +€46 million better than a year ago.

(KLM)’s first-quarter revenue rose +1.3% to €2.1 billion, while its operating loss was -€183 million, -€9 worse than a year ago. (KLM)’s operating result was affected by a non-cash increase of +€31 million in pension-related expenses.

The group’s operating costs were +1.2% higher year-on-year. Excluding fuel, they increased +3.3%. The group’s fuel bill was €1.48 billion, down -4.7% on the back of a -20.3% reduction in jet fuel price after hedging and of a -15.6% negative currency impact.

The group said it had maintained strict capacity discipline, with just a +0.1% rise in total passenger network capacity compared to the previous year.

On its long-haul network, it reported good performance in the North America, Caribbean and Indian Ocean markets, but weaker performance in Latin America on the back of weak economic environments in several key markets. Capacity-demand balances put pressures on both east Africa and Asia networks.

“As planned, short- and medium-haul, point-to-point capacity (excluding the Paris and Amsterdam hubs) was further reduced by -11.8%, leading to a significant improvement in unit revenue of +9.6% like-for-like, whereas for hub-related short- and medium-haul traffic, unit revenues were down -1.4% like-for-like,” according to a quarterly statement.

(AFA) - (KLM) noted that first-quarter capacity at its Transavia (TAV) leisure arm was up +5.1%, reflecting its accelerated development in France (where capacity was up +48%), although this was partly offset by seasonal capacity adjustments in the Netherlands. Traffic rose +7.1%. (TAV)’s load factor remained high at 87.9% LF, up +1.7% despite the increase in capacity.

The group said Transavia (TAV)’s development would accelerate in 2015, with a +30% capacity increase to serve 44 destinations from France. The subsidiary was also launching a new brand identity, new website, and had recently ordered 20 Boeing 737s.

Looking ahead, as well as initiatives under its "Perform 2020" program, negotiations with unions on labor productivity are ongoing.

Air France (AFA) - (KLM) and Air France (AFA) also signed a €1.1 billion revolving credit facility with 13 international banks, finalizing the early refinancing of the Air France (AFA) credit facility that was due to mature in April 2016.

This new credit facility comprises two €550 million tranches with respective three- and five-year maturities.

News Item A-2: Air France Industries (AFI) (KLM) (E&M) has been providing support for Air Madagascar (MAD)’s two Airbus A340-300s since September 2012, and (MAD) has renewed its Total Care agreement with the Maintenance Repair & Overhaul (MRO). Also, Royal Air Maroc (RAM) has signed a Boeing 787 Component Support agreement with the (MRO), extending an earlier contract for component support of 30 737NGs.

News Item A-3: About 2,000 flights are set to be canceled on April 9th as the strike by French air traffic controllers (ATC) goes into a second day. According to "Bloomberg," 1,600 flights were canceled on April 8th, the first day of the strike.

The French Civil Aviation Authority (DGAC) had requested carriers to cancel about 40% of their scheduled flights on April 8th. For April 9th, the (DGAC) told airlines to cancel as many as 50% of the 4,000 scheduled services.

(SNCTA), France's biggest air traffic controllers union, called for members to walk out April 8 and April 9 to protest working conditions, retirement age, and coming changes, as Europe moves toward a "Single European Sky." The retirement age of (ATC)s will also be increased from 57 to 59 years old.

On April 8th, Ryanair (RYR) said it canceled more than >250 flights; Lufthansa (DLH) canceled 24 services, and EasyJet (EZY) reportedly canceled 118 services.

Lyon-Saint Exupéry Airport reportedly canceled 32% of its planned flights. Airports in Marseille, Toulouse and Montpellier also announced flight cancellations.

According to a statement of the European Regions Airline Association (ERA), (SNCTA) is planning a possible further seven days of strike action before May 2. This action, during one of the busiest passenger traffic weeks of the year, is “completely unjustified and unreasonable,” (ERA) Director General, Simon McNamara said.

For April 9th, Air France (AFA) said it expected to operate all long-haul flights to and from Paris (Charles de Gaulle and Orly) and half its medium-haul flights to and from Charles de Gaulle.

HOP! expected to operate 25% of its flights to and from Orly, as well as approximately 40% of its flights to and from French provincial airports.

Air France (AFA) said there may be long delays on all flights. On the short- and medium-haul network, there may be last-minute delays and cancellations. (AFA) recommended that passengers postpone their trips to after April 10.

Flights that are in transit and crossing France by using the nation’s airspace should be not affected by the strike.

News Item A-4: Air France (AFA) has confirmed plans for its HOP! regional subsidiary to take over the operation of the parent company’s domestic and regional services from its hub at Paris Orly.

These will include (AFA)’s La Navette (“The Shuttle”) services to major French regional destinations such as Bordeaux, Marseilles, Nice, and Toulouse. HOP! is made up of three Air France regional affiliates (Airlinair, Brit Air and Regional).

The move is part of (AFA)’s plan toward recapturing domestic and regional passenger traffic from low-cost carriers (LCC)'s such as Ireland’s Ryanair (RYR) and the UK’s easyJet (EZY). Within France, (AFA) has also to contend with the growing network of high-speed trains, which are often competitive in time compared to the total air journey time, when one factors in negotiating airports.

“The time has come for the Air France (AFA) Group to gain market share on the short-haul market,” (AFA) Chairman & (CEO), Frederic Gagey said. “Competition is fierce with trains and more recently coach travel and the car-pooling trend. An extensive network in France, a strong commercial presence in this market and a simpler and more reactive organization will enable HOP! (AFA) is to establish itself as the reference on the French domestic network.”

However, domestic and regional (AFA) routes operating to and from its international hub at Paris Charles de Gaulle are not affected by the latest development.

HOP! operates more than >600 daily frequencies, based at its two hubs at Orly and Lyon.

News Item A-5: The European Commission (EC) has approved three state aid schemes for the French aviation sector on the basis of new Guidelines on state aid to airports and airlines adopted in February 2014.

This is the first time the (EC) has granted such approval. It said the three schemes would “promote regional connectivity without causing undue distortion of competition in the single market.” The schemes will enable France to grant individual aid that complies with the criteria laid down in the guidelines without further intervention by the (EC).

Competition Policy Commissioner, Margrethe Vestager said: “The three aid schemes just approved will enable more sustainable support to the European aviation sector, thereby improving the mobility of citizens.”

The three French aid schemes fall within the three main types of aid governed by the new Guidelines, namely investment aid and operating aid to airports and startup aid for new routes. The (EC) said it took the view that the schemes, which have been approved for a period of 10 years, and the monitoring arrangements put in place by the French authorities, would ensure that France complies fully with the new guidelines.

“The schemes will provide a clear and effective legal and economic framework for aviation operators, while promoting the coherent use of public funds for the benefit of the various stakeholders,” the (EC) said. “The aid will therefore help to improve regional connectivity, combat air traffic congestion and facilitate regional development.”

The new guidelines on state aid in the aviation sector offer member states a degree of flexibility in granting investment aid for regional airports. In addition, operating aid may be granted for a transitional period of 10 years to airports handling fewer than three million passengers a year. Airports with up to 700,000 passengers may benefit from operating aid regardless of any transitional period.

The (EC) said the objective of the guidelines was to maintain the accessibility of regions and promote regional economic development, while avoiding duplication of unprofitable airports, waste of public resources and undue distortion of competition.

The new guidelines also ensure greater legal certainty concerning the financial relationships between airports and airlines. They clearly stipulate that, where an airport concludes an agreement with an airline, it must ensure that the likely costs generated by the agreement are covered by expected revenues. If that is not the case, the airline enjoys an unjustified advantage which, in principle, constitutes state aid incompatible with the internal market.

The guidelines are part of the (EC)’s strategy to modernize (EU) state aid policy.

News Item A-6: Air France Industries (AFI) - (KLM) (E&M) will continue to deliver engine support services for the (CF6-80C2)s on National Air Cargo (MUA)’s two Boeing 747-400BCFs. In addition to carrying out shop visits, the services provided will include provision of spare engines during maintenance operations.

News Item A-7: See attached "AFA-2015-04 - TOP 25 WORLD TRAFFIC.jpg."

May 2015: News Item A-1: Air France (AFA) senior management has laid out its "Perform 2020" strategy to the airline’s Central Works Council, as it seeks to improve its finances over the medium term.

“Perform 2020" is a real ambition for (AFA), which requires us to act with determination in all areas,” Chairman & (CEO), Frédéric Gagey said. “We will move forward as part of a coordinated approach, with confidence, towards realistic objectives.”

Following its "Transform 2015" plan, "Perform 2020" was initially unveiled last fall. According to (AFA), it is based on five major planks: making Air France (AFA) the leading long-haul European network based on its Paris-Charles De Gaulle hub; creating a dense domestic point-to-point network under the HOP! brand; breaking into the world’s top five airlines in terms of cargo activity; transforming its Transavia low-cost subsidiary into a major competitor on services originating from France; and becoming a global maintenance and catering player.

Air France (AFA) said this must be achieved, while meeting new return on investment and debt reduction targets.

This will require changes in several areas, such as a “significant decrease” in unprofitable long-haul routes, slowing the loss of feeder traffic into its medium-haul services from Paris Charles De Gaulle, reaching breakeven with HOP! and improving the profitability of belly cargo carriage.

It foresees Transavia (TAV) reaching operating breakeven in 2017 and becoming profitable thereafter and promises support to further improve the company’s profitable maintenance activities.

While pursuing efforts to stimulate revenue, (AFA) plans to continue its efforts to cut unit costs. "Perform 2020" aims to reduce annual unit costs -1.5% per year (a -3% decrease in controllable costs) or -€650 million/-$728 over the 2015 - 2017 period.

To reach this goal while allowing for inflation the Group will have to generate savings of -€1.13 billion over that period.

Managers will present a progress report to the Central Works Council in June.

News Item A-2: The French government has increased its shareholding in Air France (AFA) - (KLM) in a move that will increase its influence at the Franco - Dutch company.

It will pay €33.2 million to €45.9 million/$37.4 to $51.6 million for up to 5.1 million shares. This represents 1.7% of the company’s capital and raises the government’s stake to 17.58%.

The government said it was making the purchase to ‘’support the adoption of double voting rights’’ by shareholders at the upcoming annual general shareholders’ meeting on May 21.

The introduction of double voting rights would give the French state, as a longstanding shareholder, increased power over the company.

State-owned companies in France, together with more than half the companies in the (CAC) 40 index of leading French enterprises, offer shareholders double voting rights if they hold their shares for more than two years. This is intended to be a reward for long-term involvement in the companies.

Air France - (KLM)’s board of directors has decided to put the introduction of double voting rights to a shareholders’ vote at the May 21 meeting. The board is actually putting forward a resolution to maintain single voting rights, but wants “to leave this to shareholder democracy.

“During its meeting of April 29th, the board considered that a stable, long-term shareholder base is beneficial for a company like Air France - (KLM), whose return to profitability and to a growth phase are also part of a long-term strategy,” the airline said.

Announcing the share purchase, France’s Ministry of Economy, Finances & Industry said it “desired to provide the means to support the adoption of double voting rights by Air France (AFA) - (KLM).”

News Item A-3: Air France (AFA) will operate 14x-weekly, Paris (CDG) - Minneapolis/St Paul service May 4 - September 27 with A340-300s, in partnership with Delta Air Lines (DAL). (AFA) adds a flight to its 11x-weekly, Paris (CDG) - Havana, 777-300 service in October.

News Item A-4: Alitalia is to end its Air France (AFA) - (KLM) partnership in 2017.

Etihad Airways (EHD) equity partner, Alitalia (ALI) will not renew its long-standing agreements with Air France (AFA) - (KLM), when they come up for renewal in January 2017, saying the relationship is imbalanced.

The (AFA) - (KLM)/Alitalia (ALI) tie-up covers passenger services between France, Italy, the Netherlands and beyond (as well as the marketing, sales and distribution of (ALI)’s belly capacity, currently performed by (AFA) - (KLM).

(ALI) said the (AFA) - (KLM) partnership and ancillary joint venture (JV) agreements were signed “under very different economic circumstances” in 2009 and 2010, before being transferred to the new (ALI) in January 2015. As part of this transition, Etihad Airways (EHD) took a 49% stake in Alitalia (ALI). (AFA) used to be a key (ALI) shareholder, but now holds less than <1% of (ALI).

“These agreements are no longer beneficial, either commercially or strategically, to the new (ALI) and its ambitious turnaround plan. They were negotiated when (ALI) was in a very different position, with the result that the agreements in their current forms favor the other party,” (ALI) (CEO), Silvano Cassano said.

He added the agreements are “undermining” (ALI)’s efforts to restructure its network, aimed at winning back traffic and supporting the Italian manufacturing industry’s cargo needs.

As part of its reinvention, (ALI) has joined (EHD)’s network of equity partners that includes airberlin (BER), Air Serbia (JAT), Air Seychelles (ASY), Etihad Airways (EHD), Etihad Regional operated by Darwin Airline, Jet Airways (JPL), and NIKI (NKI).

“We have indicated to (AFA) - (KLM) that we are willing to discuss more equitable arrangements that benefit all the parties involved, but thus far, we have been unable to achieve this result. We remain open to further discussions to achieve a mutually acceptable solution. However, in the interest of transparency, and certainty for all parties, we felt it necessary to announce our intention not to renew these agreements under the present conditions,” he said.

It is unclear what, if any, implications this announcement has for (ALI)’s SkyTeam (STM) Alliance membership and its transatlantic joint venture (JV) with Air France (AFA) - (KLM) and Delta Air Lines (DAL).

An (AFA) - (KLM) spokesperson said in an emailed statement: “(AFA) - (KLM) is currently holding discussions with (ALI) to see how they can cooperate in the future in Europe. The agreements under the European (JV) between (AFA) - (KLM) and (ALI) still applies until January 2017.”

News Item A-5: Air France (AFA) has warned it may close its Toulouse, Marseille, and Nice regional bases if its unions do not agree to substantially scaled down operations from the three airports.

The French province regional bases were created in 2011 for point-to-point flights, aimed at challenging (AFA)’s low-cost competitors head on. However, despite numerous attempts to make the model work, the bases have failed to deliver. “The economic equilibrium of operating flights out of regional bases was deemed impossible,” an (AFA) spokeswoman said.

In early 2015, (AFA) decided to “significantly reduce” the regional base flight schedule by cutting international routes. (AFA) has been negotiating the changes with its pilot (FC) and cabin crew (CA) unions.

(AFA) put forward two proposals to its pilots (FC), but the May 13 deadline expired without an agreement. “Without a signature, a proposal to close the regional bases will soon be presented to the relevant staff unions,” the spokeswoman said.

Likewise, (AFA) will put forward a draft agreement to affected cabin crew (CA) May 20 - 21. If this is not signed, the same process will be initiated with the cabin crew. “At the end of the consultation with the unions, the company will be in a position to clarify the framework and the conditions related to its implementation between now and autumn 2015, in support of the concerned staff,” the (AFA) spokeswoman said.

(AFA) is currently focused on developing its regional operations through its HOP! brand.

777-328 (40064, F-GZNQ), leased.

June 2015: News Item A-1: Air France (AFA) said it will accelerate implementing its "Perform 2020" strategic plan, following increased pressure on unit revenue since April.

(AFA) is targeting cost savings of -€650 million/-$735 million over the next three years as part of the Air France (AFA) - (KLM) Perform 2020 plan, which succeeds the group’s "Transform 2015" program.

“We have to speed up the "Perform 2020" plan. There is too much capacity in the marketplace and we face uncertainty in various places of the world,” (AFA) Chairman & (CEO), Alexandre de Juniac said this month on the sidelines of the (IATA) (AGM) in Miami.

Part of the measures includes scheduling negotiation meetings with unions under a tight schedule to finalize agreements by the end of September. Immediate measures include the closing of several loss-making routes (including services to Stavanger, Verona, Vigo, and Kuala Lumpur) in winter 2015. It will reduce frequency and aircraft size on routes including Japan, Brazil, and Russia. “We invested a lot in the South American market, but we feel the weak economic situation there,” de Juniac said.

New initiatives targeting external expenses and general purchasing will have an estimated full-year impact of €80 million, (AFA) said.

(AFA) is also launching a detailed review of its investment plan, which will notably include the earlier-than-planned grounding of a third Airbus A340-300 and negotiations to postpone the delivery of long-haul aircraft Airbus A350-900 and Boeing 787-9. The first aircraft of a 25 Boeing 787-9 order is expected due to arrive in November 2016; the first of a 25-strong A350-900 order is scheduled to arrive in 2018. “But at this moment, Air France does not know how long any delay in delivery might be,” a spokesperson said.

Finally, management has been negotiating for the past seven months with the (SNPL) pilot union, on implementing the remaining measures planned in the "Transform 2015" agreement signed by the union. Considering the lack of progress, management has decided to engage judiciary proceedings against the (SNPL). “All other unions have done this, but the (SNPL) has only implemented 65%,” the spokesperson said.

“At the end of September 2015, we will review the financial situation of Air France (AFA), the progress achieved in the negotiations with unions, and the subscriptions to the two ongoing Voluntary Departure Plans [affecting cabin crew and ground staff]. We will then be in a situation to decide the necessary actions to safeguard the future of (AFA). On the eve of the summer peak period, essential to the 2015 financial results, we are fully mobilized to the service of our customers,” (AFA) Chairman & (CEO), Frédéric Gagey said.

Asked if there would be further redundancies, de Juniac said, “This is not easy to say. We have cut several thousands of jobs in (AFA) within three years. We have done a good job [in restructuring (AFA)], but this will be not enough,” de Juniac said.

News Item A-2: French air traffic controllers are set to strike for 48 hours from Thursday July 2nd in their latest protest against what they say are deteriorating working conditions in the face of steady growth in the aviation sector.

The controllers, members of the (SNCTA) union, said the budget of the French aviation regulator should be safeguarded; instead, it argues, decisions over recent years by both the French government and the European Commission (EC) have led to restrictions in both technical resources and the workforce.

The strike is the second called this year by French controllers and is likely to have a severe effect as the summer holiday season gets underway. The French authorities have asked airlines to cut their frequencies -40% during the dispute.

Ryanair (RYR), which has repeatedly railed against the disruption caused by controllers’ strikes in various European countries, called on the French government and the (EC) to keep traffic flowing by allowing air traffic controllers from other European Union (EU) nations to handle flights over-flying France. “The timing of these strikes is designed to cause maximum disruption to consumers because there’s little or no capacity in the system to allow customers to rebook or reschedule canceled holidays,” (RYR) Chief Marketing Officer, Kenny Jacobs said. “The timing of these strikes during the first week of the school holidays is reprehensible.”

The request by the French authorities for a -40% cut in flights “will result in millions of consumers having their flights or holidays canceled, with no opportunity to rebook or re-route them.”

He called on the (EU) and France to instigate a system similar to that in the USA, where air traffic controllers (ATC)s are legally barred from striking and where industrial relations problems must be submitted to binding arbitration.

(RYR) has refused to comment on reports in the French media that it has applied for slots at Paris Orly, Nice and Lyon for the forthcoming winter season. If confirmed, the development would be a further indication of (RYR)’s gradual move away from serving smaller regional airports in favor of larger hubs. Currently, it only serves Paris via the small airports at Beauvais and Vatry, while its only presence at Nice is with flights to Dublin and Shannon. It does not currently serve Lyon.

“While we are always interested in new routes, we do not comment upon or engage in rumor or speculation,” (RYR) said in a written statement.

News Item A-3: "Air France (AFA (CEO): Capacity Discipline on North Atlantic Routes is Crucial" by (ATW) Kurt Hoffman, June 10, 2015.

Shifting too much capacity from unprofitable long-haul routes to North Atlantic networks could cause a drop in yield, Air France (AFA) Chairman & (CEO), Alexandre de Juniac said on the sidelines of the (IATA) (AGM) in Miami. “Everywhere in the world we are seeing an increase in capacity, especially on routes over the North Atlantic, but [there are also] large outstanding airplane orders,” he said, adding, “Overcapacity is affecting a drop in yield for everyone.”

De Juniac said he understands some European airlines are shifting capacity from routes to Asia to the North Atlantic.

He said the North Atlantic is a very important network for the Air France (AFA) - (KLM) Group. “Our joint venture (JV) with Delta Air Lines (DAL) controls 25% of this market [Europe - North Atlantic]. Together with (DAL), Alitalia (ALI) and (KLM), we offer 900 weekly flights over the North Atlantic.”

(CEO), Frederic Gagey also said that routes to South America are being negatively impacted by the economic situation in several countries, especially in Brazil. “We feel it. And (AFA) has invested a lot in the South American market.”

De Juniac said (AFA)’s “unit revenue per available seat kilometer [RASK] ex-currency is clearly down compared to May 2014. So, not everything is fine within (AFA).”

In May, Etihad Airways (EHD) equity partner Alitalia (ALI) said it would not renew its long-standing agreements with (AFA) - (KLM), when they come up for renewal in January 2017 on routes between France, the Netherlands and Italy. “That means we have 18 months to find out if we are going to continue or stop it,” de Juniac said. “This joint venture (JV) is a benefit for all of us.”

(AFA), which is also cooperating with Etihad (EHD) on several routes, especially to Southeast Asia, will continue conversations with (EHD) to extend code share routes. “We in discussions with them,” he said.

News Item A-4: Air France (AFA) appointed Gilles Laurent as Executive VP Flight Operations, as of June 1, succeeding Eric Schramm.

July 2015: News Item A-1: Air France (AFA) - (KLM) reported a first-half net loss of -€638 million/-$700.3 million, widened from a loss of -€619 million in the year-ago period. The Franco-Dutch group said “exceptional volatility” in fuel process and currency exchange fluctuations, plus pressure on unit revenues, led to the increased losses.

Revenue in the first half rose +2.4% to €12.3 billion, while passenger numbers were up +1% at 42.6 million.

(ASK)s rose a slim +0.3% year-over-year due to strict capacity discipline in the first half, while (RPK)s increased by the same amount. Plans to grow capacity +2.3% over the winter 2015 - 2016 period have been reduced to 0.3%.

Load factor for the half-year was unchanged at 83.8% LF.

(AFA) - (KLM) plans to accelerate its "Perform 2020" initiative, with new negotiations imminent with (AFA)’s trade unions to help turn around the Group’s figures.

Group Chairman, Alexandre de Juniac said in the first half the Group’s results were “characterized by exceptional volatility in exchange rates and fuel prices, and by ongoing pressure on unit revenues.”

He added: “The lack of results improvement, leads us to implement immediate additional adaptation measures including, in particular, the closure of heavily loss-making routes, the downward revision in capacity for the forthcoming winter season, together with acceleration and an increase in the magnitude of our cost-saving initiatives.”

De Juniac said that following the agreement signed by (KLM) with its unions, “the rapid conclusion of the negotiations with the (AFA) unions is key to re-launching the results turnaround.”

(CFO), Pierre-François Riolacci said that (while results on North American routes remains bullish and Europe is stable) services to Brazil have suffered as a result of that nation’s “very sluggish” economy, while recent terrorist incidents in Europe and North Africa has had a dramatic effect on traffic between Japan and Europe, which dropped by up to -20% year-over-year.

On the brighter side, he said, the Ebola crisis in Africa is no longer a problem.

Foreign exchange factors (notably, the strengthening of the dollar against the euro (has been a “very significant factor_,” given that some 40% of the Group’s costs were denominated in US currency.

Among moves to cut costs, the three constituent companies of Air France (AFA)’s HOP! regional subsidiary (Airlinair, Brit Air and Régional), which have been run as separate entities under the same brand but with their own air operator’s certificates (AOC)s) will be brought together in a single company with -245 redundancies.

(AFA) - (KLM) is calling for stronger support from European governments to help it weather the squalls, said de Juniac, notably in a reduction of regulatory constraints that impose additional costs for European airlines.

He also wants the European Commission (EC) to “negotiate a balanced agreement with the Gulf countries” on air services and said he would favor some form of international arbitration mechanism to address matters such as “unfair competition and subsidies.”

News Item A-2: "Air France (AFA) to Extend Cuts in Seats, Routes After Profit Plunges" By Andrea Rothman, Bloomberg News, July 24, 2015.

The Air France (AFA) - (KLM) Group will drop routes, curb winter-season seating capacity and deepen other cost-cutting measures after second-quarter profit fell -22%.

Operating profit tumbled to +EUR185 million/+US$203 million, hurt by a continuing slide in fares and a stronger dollar that raised fuel prices, (AFA) - (KLM) said. Margins on that basis also shrank, sliding -0.9% point to 2.8%.

Europe's biggest airline group posted net losses in the last four years under pressure from Persian Gulf carriers on international flights and discounters such as EasyJet (EZY) on shorter routes. Management also has struggled to win over (AFA) pilot unions on its savings plans.

"The rapid conclusion of the negotiations with the (AFA) unions is key to re-launching the results turnaround," (CEO), Alexandre de Juniac said.

(AFA)-(KLM) will trim available seating in the second half to meet lower demand, with capacity cuts of -14% to Japan, 5% to Brazil and 6% to East Africa. It also plans to reduce spending by another 300 million euros by 2017.

(AFA) didn't specify which routes will be affected, or elaborate on where other cuts might come beyond saying it plans "an acceleration and an increase in the magnitude of our cost-saving initiatives."

Revenue for each seat flown a km, an airline-industry benchmark, fell -4.8% on a like-for-like basis, (AFA)-(KLM) said. Fares on long-haul routes were hurt by travel-budget reductions at oil- and gas-related customers, especially in Africa.

The airline maintained its 2015 targets for unit cost improvement in a range of 1% to 1.3% and for net debt of about 4.4 billion euros by year-end.

News Item A-3: Air France (AFA) is again considering deferring deliveries of new airplanes just six months after it and partner (KLM) Royal Dutch Airlines announced delays in the arrival of ten new 777-300ERs.

As part of its "Perform 2020" strategic growth plan, (AFA) said it is reviewing its long term investment plan and as such, is considering deferring deliveries of its A350-900 and 787-9 fleets.

The first of twelve 787-9s was tentatively scheduled to arrive from Boeing (TBC) in November 2016 alongside its first of eighteen A350s. (AFA) said it is also looking at retiring a third A340-300 early because of the type's poor fuel economy. (AFA) is also planning to axe a number of loss-making routes (among them Stavanger, Verona, Vigo (Spain), and Kuala Lumpur International at the onset of the Winter 2015/2016 season). Other non-performing routes to Japan, Brazil, and Russia will also see a reduction in frequency and capacity where necessary.

(AFA) also said it was launching legal action against the (SNPL) (ADF) Alpa pilots' union, citing a lack of progress in seven months of negotiations concerning the implementation of outstanding aspects of "Perform 2020."

News Item A-4: "Mexico Inks Deal with Air France (AFA) for Operation of Airbus 380 Fleet" by "Xinhua" July 17, 2015.

Mexico signed an agreement with Air France (AFA) to allow (AFA) to operate its Airbus A380 fleet in Mexico starting in 2016.

The Ministry of Communications & Transport (SCT) said in a press release that President Enrique Pena Nieto, who is on a state visit to France, and his French counterpart, Francois Hollande, witnessed the signing of the agreement. "The deal marks the beginning of a new era in the development of Mexican aviation, and turns the International Airport of Mexico City into the first destination in Latin America to have this great aircraft operating regularly," the Ministry said.

The Airbus 380, considered the world's largest and most modern passenger airliner, could begin flying into Mexico City in the first four months of 2016, "once the necessary arrangements and adjustments have been made" to airport facilities, the Ministry said.

The double-deck, wide body jetliner can carry up to 525 passengers in a traditional three-class setup, or up to 853 people in an all economy (Y) class setup.

In 2009, Air France (AFA) became the first major commercial airline in Europe to operate Airbus 380, with a Paris - New York flight.

(AFA)'s 12 Airbus 380 aircraft also fly between Paris and the USA city of Miami, Florida.

News Item A-5: Air France (AFA) is accelerating the phase out of its five remaining 747-400s with the type's last commercial flight scheduled for January 10, 2016. The previous scheduled date was March 26, 2016.

According to "Airline Route," the 747's last flight is AF439 departing from México City on January 10, 2016 and arriving at Paris (CDG) the following day.

(AFA) currently uses its 747 fleet on flights to Atlanta Hartsfield Jackson, Boston, Dakar, Mauritius, Mexico City, and Toronto Pearson.

News Item A-6: Air France (AFA) - (KLM) appointed Adeline Challon-Kemoun as Executive VP Marketing, Digital & Communication. (AFA) - (KLM) has appointed Nina Jonsson as Senior VP Fleet Management, replacing Bruno Delile who has moved to another position within the group. Nina has previously held the positions of United Airlines (UAL) Director Fleet Planning and US Airways (AMW)/(USA) Director Fleet Management.

News Item A-7: (KLM) Royal Dutch Airlines has finalized a €575 million/$635 million revolving credit facility, taking Air France (AFA) - (KLM)’s total undrawn credit to €1.845 billion.

(KLM)’s former facility was not due to mature until July 2016, but it opted for early refinancing with the deal.

(KLM)’s new credit line, which it claims has “improved terms,” will run for five years and involves 10 international banks. “The transaction was launched at €500 million and (KLM) took advantage of the over-subscription to increase the facility to €575 million,” (KLM) said.

Air France (AFA) also opted for an early renewal of its credit facilities, which it finalized at the end of April.

News Item A-8: Air France (AFA) - (KLM) plans to expand its low-cost carrier (LCC), Transavia (TAV) beyond its French and Dutch bases, despite a bitter industrial dispute last fall.

August 2015: News Item A-1: Mixed aftermarket business results are encouraging some major players to continue to steer clear of Air France Industries (AFI) - (KLM) Group, which padded its Maintenance Repair & Overhaul (MRO) backlog to nearly five years of work and is on track to boost year-over-year operating profit of its (AFI) - (KLM) (E&M) Engineering unit for the fifth consecutive year.

News Item A-2: Air France (AFA) outlined the routes it plans to transfer to its HOP! subsidiary with effect from the beginning of the Winter 2015/16 season. The move is part of (AFA)'s strategy to win back domestic market share lost to the likes of high-speed rail and Low Cost Carriers (LCC)s.

"Airline Route" reports that effective October 25, HOP! will assume the following Air France (AFA) flights out of Marseilles: Bordeaux, Lille, Nantes, and Rennes. From Nice: Lille, Lyon St Exupéry, Nantes, and Strasbourg. From Toulouse Blagnac: Lyon and Strasbourg. (AFA) will maintain a presence in each of the affected markets via code sharing.

HOP! is also slated to take over the operation of all of (AFA)'s domestic and regional services from its Paris Orly hub including its La Navette flights to Bordeaux, Marseilles, Nice, and Toulouse Blagnac.

September 2015: News Item A-1: Air France (AFA) is considering establishing a long-haul, low-cost carrier (LCC) subsidiary as part of its ongoing plans to stabilize and improve its financial performance.

(AFA), the troubled French national carrier is working its way through "Perform 2020," a multi-pronged plan designed to improve profitability and remain a major global player in the airline sector. As part of this, a long-haul, (LLC) operation is being studied.

“It might be part of the plan,” an (AFA) spokeswoman said September 4. “Currently, 50% of our long-haul routes are not profitable. Our objective with this plan is to set a target of 80% in 2017.”

Any such long-haul, (LCC) plan would await the impending arrival of (AFA)’s Boeing 787-9s, which are due to start appearing late 2016. The type’s improved economics would be a major factor in lowering costs.

“The arrival of these 787-9s is an excellent opportunity to contribute to the return to breakeven of the long-haul network,” the spokeswoman said.

Equally important, however, will be the ability of (AFA) to persuade its frequently restive flight deck workforce to agree to a new salary structure for any (LCC) subsidiary. “Salaries would be different [and] all other productivity [measures] need to be higher,” the spokeswoman added.

The idea of a new subsidiary was floated in front of (AFA)’s workforce, or “social partners” before the summer holiday period and was being discussed September 4 by (AFA)’s Central Works Council.

According to "Reuters," union sources said September 4 (AFA) is threatening to cut -10% of its long-haul network by 2017, unless pilots (FC) accept significant enough cost-cutting changes to their work conditions.

The airline spokeswoman said that a further Central Works Council meeting is scheduled for September 24 and no decisions on the future of any new subsidiary are likely before then.

News Item A-2: Technology specialist (WIN) is expanding its e-booking system to connect independent forwarders to 16 airlines. (WIN) already connects to over 90 airlines for electronic Air Waybill (e-AWB). The carriers available for e-bookings include British Airways (BAB), Iberia (IBE), Etihad Airways (EHD), (SAS), Singapore Airlines (SIA), Jet Airways (JPL), Swiss (CSR), American Airlines (AAL), Air France (AFA), Finnair (FIN), Korean Air (KAL), (KLM), Lufthansa (DLH), United Airlines (UAL), Emirates (EAD), and Gulf Air (GUL). The all-in-one tool includes the ability for customers to look up flight schedules, create and manage bookings in real-time, transmit (e-AWB) data, and receive full (e-AWB) tracking automatically.

October 2015: News Item A-1: "Air France - (KLM) Posts Sharp 3Q Net Profit Increase" by (ATW) Victoria Moores, October 29, 2015.

The Air France (AFA) - (KLM) Group has reported a third-quarter net income of +€480 million/+$529.6 million, up from +€86 million in the year-ago period, due to strong summer trading.

“A favorable environment, principally characterized by lower fuel prices and strong demand over the summer, resulted in an improvement of (AFA) - (KLM)’s results during the third quarter and first nine months of 2015. Such circumstances came in addition to the positive effects of the "Transform 2015" plan implemented since 2012,” (AFA) - (KLM) (CEO), Alexandre de Juniac said at the release of the results on October 29.

However, de Juniac cautioned this is “not sufficient” to make the group competitive or to support the group’s growth plans, stressing that further unit cost reductions must be achieved under "Perform 2020."

Revenues for the three-month period rose to €7.4 billion, up +10.8% on the prior-year period. However, this figure was boosted by “a strong currency tailwind” and the increase was narrowed to +4.2% excluding the impact of Air France (AFA)’s September 2014 pilots (FC)’s strike, or 2.4% at constant exchange rates and including the strike. The group’s operating profit rose to +€898 million, marking a +€321 million increase, excluding the strike, or +€304 million on a like-for-like basis.

“The third-quarter comparison basis is strongly affected by the (AFA) pilot (FC) strike that disrupted operations in September 2014,” (AFA) - (KLM) said, adding it took a -€416 million revenue hit from the action, partly offset by a +€86 million net-cost saving. “The net impact on third-quarter operating result was thus estimated at €330 million. As a reminder, this strike also had an impact on fourth quarter 2014 revenues, for an estimated €95 million impact on revenues and operating result,” it said.

Operating costs were +1.1% higher year-on-year, or down -7% on a like-for-like basis. Ex-fuel rose +2.7%, or +0.5%, on a constant basis. Unit costs fell -0.9%, removing the effects of currency fluctuations, changes in fuel price and excluding exceptional pension-related costs.

For the full year, the group is now expecting to post a -0.5 to -0.7% unit cost reduction, down from its earlier forecast of -1% to -1.3%.

De Juniac stressed the importance of sealing a new labor agreement with the airline’s pilots (FC) and cabin crew (CA), which he said is “crucial” to the success of "Perform 2020."

News Item A-2: Delta Air Lines (DAL) is buying six slot pairs at slot-constrained, London Heathrow (LHR) Airport from joint venture (JV) partner, Air France (AFA) - (KLM), (DAL)’s executives said on October 14.

News Item A-3: Failure of negotiations between Air France (AFA) and its flight crews (FC)s means that the French national carrier will announce job losses on October 5, 2015.

The two sides have been unable to reach agreement on pilots (FC) and cabin crew (CA) meeting the terms of (AFA)’s "Perform 2020" turnround strategy. (AFA) has been warning for some time that job losses and cuts to the network would result if this situation continued.

September 30 had been given as the deadline for an agreement.

Following an October 1 meeting of the Air France (AFA) - (KLM) board of directors to assess implementation of Perform 2020, it issued a statement noting “the absence of an agreement on September 30, 2015 in the negotiations between (AFA) management and flight crew (FC) unions, in spite of on-going dialogue over the past several months and numerous proposals put forward by (AFA) management.

“Facing the impossibility of reaching an agreement to implement the productivity measures within (AFA) and restore long-term profitability, the board members consider it essential to introduce an alternative plan and have unanimously agreed to mandate (AFA)- (KLM) and (AFA) management to carry this out.

“This plan, which includes a reduction in (AFA)'s activity in 2016 and 2017 in order to guarantee the company's future and economic objectives, will be presented to the (AFA) Central Works Council on Monday, October 5.”

"We must move forward today to ensure a sustainable future for the Group's activities, allowing it to capture the growth of the sector by relying on its most competitive activities,” said (AFA) - (KLM)’s Chairman & (CEO), Alexandre de Juniac. “We are reaffirming our determination to make (AFA) - (KLM) one of the leaders in the consolidation of our industry on a global level.”

Union sources cited by "Reuters" said they believed that up to -2,900 jobs could be lost. (AFA) has in the past talked of deferring some of its ordered 25 Boeing 787-9s, which are due to start arriving in late 2016, as well as cutting some long-haul services, some 50% of which are unprofitable.

News Item A-4: "Air France to cut 14 long-haul airplanes and 2,900 Staff" by (ATW) Victoria Moores, October 5, 2015.

Air France (AFA) is to axe -2,900 jobs, scale back its long-haul fleet by 14 airplanes and close five routes after failing to reach a productivity agreement with its flight crew (FC) unions.

Under the plan, (AFA)'s long-haul fleet will be reduced from 107 airplanes in summer 2015 to 93 in summer 2017, cutting capital expenditure by up to €200 million/$224.2 million in 2016 and 2017. “This adjustment will mainly be made via the accelerated retirement of Airbus A340s, which will not be replaced by Boeing 787s, as had been initially planned,” (AFA) - (KLM) said in an update released on October 5.

This translates into a 10% long-haul capacity reduction between 2015 and 2017, involving the closure of five routes and 35 weekly frequencies. At group level, this translates into a -2% passenger capacity cut by 2017, compared with original plans for +3% growth.

“The schedule modifications will focus on routes where losses are highest, serving principally Asia and the Middle East. The impact on the commercial footprint of the group will be minimal thanks to, among other, the numerous partnerships in the relevant markets,” it said.

This will leave (AFA) overstaffed by approximately +300 pilots (FC), +900 cabin crew (CA) and +1,700 ground staff (MT). “In segments where consultation/negotiations enable the achievement of the "Perform 2020" targets, the adaptation in staff will take the form of voluntary departures. In the other segments, compulsory redundancies cannot be ruled out. The restructuring charges will be recorded once the pace and conditions for these departures has been determined,” (AFA) said.

The announcement followed a Perform 2020 update meeting between its Central Works Council and Air France Chairman & (CEO), Frédéric Gagey.

“We regret that no agreement has been reached with the (AFA) flight crew (FC) unions. The turnaround of the company can only be fulfilled with the mobilization of all its employees. The (AFA) management remains available to reopen negotiations with its unions at any point. We reaffirm our determination to implement the adaptation measures vital to ensuring the long-term future of (AFA) and allow it to finance its growth,” (AFA) - (KLM) Chairman & (CEO), Alexandre de Juniac said.

Despite the measures, (AFA) - (KLM) is maintaining its outlook for its current financial year and for 2017, including a -1.5% reduction in unit costs by 2017.

News Item A-5: Air France (AFA) will limit job cuts to -1,000 from its original plan to cut -2,900 jobs as part of its cost-cutting measures in 2016 - 2017. The job cuts will be voluntary, but only if a union agreement can been reached by January 2016, (CEO), Frédéric Gagey said. Cagey told "Reuters" that (AFA) has seen an improvement in its operations since the summer, but needs to press ahead with restructuring to reach medium-term goals.

The October 5 announcement to cut 2,900 jobs through 2017, which triggered a violent response from its unionized workforce, was made after failing to reach a productivity agreement with flight crew (FC) unions. (AFA) also said it plans to scale back its long-haul fleet by 14 airplanes and close five routes.

“The plan for implementing cutbacks in our activities, presented on October 5, would involve -2,900 job cuts, the vast majority of which would not be achieved through redundancies. But I did say that we still had several weeks to resume negotiations and avoid having to take harsh measures in 2017,” (AFA) Chairman & (CEO), Alexandre de Juniac told "Le Monde Economie" on October 16. He added that if negotiations succeed and (AFA) finds it is overstaffed, it will implement a voluntary redundancy scheme. There will not be any compulsory redundancies if an agreement is reached. “You will note that there have not been any compulsory redundancies since 2012, thanks to the ongoing dialogue at our company,” de Juniac said.

According to the Austrian news-channel "ORF," (AFA) is losing €2.9 million/$3.2 million every day. According to "ORF," flight crew (FC) salaries are +20% higher compared to Lufthansa (DLH) or British Airways (BAB).

News Item A-6: Air France Industries (AFI) (KLM) (E&M) and Privilege Style (PVS) signed a contract covering component support for a Boeing 777. (AFI) (KLM) (E&M) and fast-growing Jet2.com (JT2) have signed an engine maintenance contract for 737-800s. The agreement covers engine repairs, on-site and on-wing assistance, as well as an engine leasing option. Also, (AFI) (KLM) (E&M) has been granted Part 145 approval by (EASA) for line maintenance on the Airbus A350.

November 2015: News Item A-1: Air France Industries (AFI) - (KLM) (E&M) opened a Logistics Center in Dubai in the Jebel Ali Free Zone near the new Dubai World Central.

And Gulf Air (GUL) has extended its agreement for maintenance of (APU)s equipping six Airbus A330s with the Maintenance Repair & Overhaul (MRO). Services will be provided by (EPCOR), the (AFI) - (KLM) (E&M) subsidiary specializing in (APU)s.

In addition, Etihad Airways (EHD) has expanded its strategic cooperation with (AFI) - (KLM) (E&M) through a several-hundred-million-dollar component maintenance agreement for 33 Boeing 777s. The 10-year deal provides (EHD) and its equity partners with access to a global pool of components. (AFI) - (KLM) (E&M) and Saudia Aerospace Engineering Industries (SAU) are entering a long-term strategic partnership. (AFI) - (KLM) (E&M) will support 777 and 787 components under power-by hour and assist (SAEI) (SAU) to develop (MRO) capabilities for Airbus (EDS) and Boeing (TBC) models in Jeddah. Finally, the (MRO) will partner with software firm, Ramco Systems to set up an innovation center in Singapore.

News Item A-2: Everett, Washington, USA, November 14, 2015 /PRNewswire/: — Boeing (TBC) and (KLM) Royal Dutch Airlines are celebrating the delivery of (KLM)’s first 787-9 Dreamliner (36113, PH-BHA). Over the coming years, the 787 will play a key role in (KLM), the Dutch flag carrier’s fleet renewal and expansion. (KLM) acquired this airplane through leasing company AerCap (DEA).

In addition to this delivery, the Air France (AFA) - (KLM) Group has 19 787-9s and six 787-10s on order and will lease 12 787s through AerCap (DEA). (KLM) will operate its first 787-9 on its Amsterdam – Abu Dhabi – Bahrain service.

December 2015: News Item A-1: "Air France (AFA) - (KLM) Takes -$55 million Hit from Paris Terrorism Attacks" by (ATW) Victoria Moores, December 10, 2015.

Air France (AFA) - (KLM)’s traffic was significantly impacted by the November 13 terrorist attacks in Paris, costing the group around -€50 million/-$55 million in lost revenue.

Over the period November 1 - 13, (AFA) - (KLM)’s load factor was +2.7 points up on November 2014, but from November 14 - 30 it was down -0.9 point. “The negative impact of the Paris attacks on total November revenues is estimated to be around -€50 million,” the group said.

Budget brand, Transavia France (TVF) was affected “to a lesser extent,” while cargo was impacted by additional security measures following the attacks.

For the entire month of November, (AFA) - (KLM)’s short- and medium-haul capacity was down -2.4%, but traffic fell -0.8%, causing its average load factor to rise +1.3 points to 77.7% LF. Across (AFA) - (KLM)’s network airlines, including long-haul operations, capacity was up +1%, traffic was up +1.8% and load factor rose +0.6 points to 82.4% LF.

“Current booking trends are in line with a progressive recovery, including a very limited impact on volumes after the end of December 2015,” (AFA) - (KLM) said.

Other airlines, such as Ryanair (RYR), reported a slight softening of demand in the weeks immediately after the attacks, although this was not expected to last.

News Item A-2: Air France (AFA) named Eric Schramm as Executive VP Operations, accountable manager, effective December 1. In this capacity, he will oversee Flight Operations, Ground Operations, and the Maintenance division.

News Item A-3: Air France (AFA) - (KLM) has appointed Nathalie Stubler as the next (CEO) of Transavia France (TVF), succeeding Antoine Pussiau who will become (AFA) - (KLM) Senior VP Asia Pacific.

The changes, which take effect from February 1, 2016, will also see Patrick Roux (who is currently (AFA) - (KLM) Senior VP Asia Pacific) become (AFA) - (KLM) Senior VP Alliances.

Since September 2014, Stubler has been (AFA) - (KLM) Chief of Staff & Group Secretary for (AFA) - (KLM)’s executive committee. Her background includes roles as Head of Revenue Management at Air France (AFA) and Senior VP Network Strategy for the group.

“Nathalie Stubler will continue Transavia (TVF)'s development in France, notably to increase its profitability and the expansion of its operations, while promoting synergies with Transavia Holland (TAV),” (AFA) - (KLM) said.

Pussiau has headed Transavia France (TVF) since 2013.

Transavia France (TVF) operates around 100 routes and is aiming to carry six million passengers in 2016, triple the number it handled in 2012.

News Item A-4: Icelandic wet-lease (ACMI) specialist, Air Atlanta Icelandic (AID) has acquired two Boeing 747-400s from Air France (AFA), which is in the final stages of retiring the type after four decades of service.

(AID) Sales Director, Magnus Asgeirsson confirmed the two airplanes arrived in Iceland and have already been placed with customers; Saudia (SVA) is operating one airplane.

The latest acquisitions add to (AID)’s growing fleet of 747s; it already has 10 747-400s on strength, together with six 747-400F/SF freighter versions. It also has an Airbus A330-200 and an A340-300.

The move came as Air France (AFA) announced the final flight of a 747-400 in its colors will take place from Paris Charles de Gaulle on January 14 next year, when the last 747 airplane in the fleet will make a commemorative flight around French airspace.

All passengers on the flight, which will carry the flight designation AF747, will receive a business (C) class lunch, with a commentary being given as it overflies landmarks such as Mont Blanc.

(AFA), the French national carrier was an early customer of the 747 (its first flight from Paris to New York took place on June 3, 1970). Its long-haul services have been progressively taken over by (AFA)’s fleet of 65 Boeing 777s.

January 2016: News Item A-1: Air France (AFA) has confirmed it has been informed of strike action by the (CGT) trade union on Thursday, January 28, 2016 and by Alter, a minor pilots (FC)’s union, from January 10 - 13.

Air France (AFA) and its three ground staff labor unions ((CFDT), (CFE) - (CGC) and (UNSA)) have signed a three-year agreement. “This agreement offers a number of important guarantees for ground staff, in terms of career evolution, measures in support of mobility, and changes in the different business areas,” (AFA) said.

Under the agreement, (AFA) will not make any compulsory redundancies for economic reasons among its ground staff corps until June 30, 2018.

The ground workers also secured provisions for “functional and/or geographical mobility” within the company.

(AFA) described the labor pact as a “major agreement” and a “balanced compromise,” which will strengthen the company's competitiveness.

News Item A-2: "Air France (AFA) - (KLM) Takes a Further Hit from Paris Attacks" by (ATW) Victoria Moores, January 11, 2016.

Air France (AFA) - (KLM) is now estimating the November 13, 2015 terrorist attacks in Paris cost it -€120 million/-$131 million in total lost revenues, after incurring another -€70 million hit in December 2015.

“The negative impact of the Paris attacks on December revenues is estimated to be around -€70 million, with significant easing during the last two weeks. Booking trends in December were in line with a progressive recovery,” Air France (AFA) - (KLM) said.

The group had already reported -€50 million in lost revenue for November, taking the total impact to -€120 million to date.

Total passenger numbers across the group’s network airlines were down -1.1% at 6.2 million in December, although average load factor remained stable at 82.8% LF.

News Item A-3: "Air France (AFA) Offers ‘Balanced Compromises’ on "Perform 2020"" by (ATW) Victoria Moores, January 18, 2016.

Air France (AFA) is proposing to add seven aircraft to its long-haul operation and expand Transavia France (TVF)’s fleet to 40 aircraft, but is calling for further unit cost savings, under its revised "Perform 2020" strategic plan for 2017 - 2020.

In October, (AFA) threatened to cut -2,900 jobs, scale back its long-haul fleet by 14 aircraft and close five routes by summer 2017, after failing to reach a productivity agreement with its flight crew (FC) unions.

However, following the latest meeting of the airline’s Central Works Council, (AFA) Chairman & (CEO), Frédéric Gagey said: “(AFA)'s recovery is continuing and the current buoyant economic situation allows us to offer a return to growth as from 2017. This adaptation of "Perform 2020" will be made possible by balanced compromises.”

During the meeting, Gagey presented strategic guidelines for (AFA)’s "Perform 2020" plan, but he also noted the growth targets depend on achieving “lower unit costs according to a phased schedule.”

The growth measures include a +2% to +3% expansion of (AFA)’s long-haul network over the period 2017 - 2020. “This development will provide for an additional seven aircraft in the long-haul fleet, the launch of one or two new destinations and an increase of around 10% in capacity and flight hours between 2016 and 2020,” (AFA) said.

(AFA) also plans to stabilize its short- and medium-haul networks and increase Transavia France (TVF)’s fleet to as many as 40 aircraft by 2020. “These measures must be the object of renewed social dialogue. (AFA) management has therefore suggested launching negotiations with pilot (FC) and cabin crew (CA) unions. Negotiations on career management with ground staff unions have just ended and will help to ensure, after signature, the absence of forced departures until June 2018,” (AFA) said.

News Item A-4: Air France (AFA) - (KLM) has rolled out 765 new self-serve kiosks at Amsterdam’s Schiphol and Paris’ Charles de Gaulle and Orly airports.

News Item A-5: Air France (AFA) ends more than >40 years of Boeing 747 operations with a final commercial flight from Mexico City to Paris-Charles de Gaulle (CDG) on January 10.

(AFA), the French flag carrier conducts two tribute 747 flights over France and several landmarks on January 14 to and from Paris (CDG).

(AFA) a SkyTeam (STM) Alliance member, was an early customer of the 747 (its first flight from Paris to New York launched June 3, 1970).

Icelandic wet-lease (ACMI) specialist Air Atlanta (AID) recently acquired two Air France 747-400s.

After January 10, (AFA) will operate the 3x-weekly, Paris (CDG) - Mexico City using an Airbus A380 and 4x-weekly with a Boeing 777-300ER, becoming daily A380 service from the end of March.

News Item A-6: Air France Industries (AFI) (KLM) Engineering & Maintenance and Boeing (TBC) have renewed their joint 737 Component Services Program and agreed to extend the program to 737 MAXs.

News Item A-7: Sabena Technics (SAB) will perform cabin and systems modifications on two Air France (AFA) Boeing 777s. Modifications will include integration of Air France (AFA‘s "BEST" cabin and installation of a new In-flight Entertainment system.

News Item A-7: Air France Industries (AFI) - (KLM) Engineering & Maintenance will provide Maintenance Repair & Overhaul (MRO) services to Xiamen Airlines (XIA)’s (GEnx) engines on six Boeing 787-8s that (XIA) has on order. (XIA) is the launch customer for (AFI) - (KLM) (E&M)’s maintenance service on the (GEnx) in Amsterdam.

February 2016: News Item A-1: "Air France (AFA) - (KLM) Returns to Black in 2015" by (ATW) Alan Dron, February 18, 2016.

Air France (AFA) - (KLM) recorded a profit of +€118 million/+$130.8 million for 2015, reversed from a loss of -€225 million for the preceding year. Turnover was €26.1 billion, up +4.6% on 2014’s €24.9 billion.

Announcing the results in Paris, the Franco-Dutch company said the (4Q) results were affected by the November terrorist attacks in Paris, which were estimated to have cost the company -€120 million as customers stayed away from the French capital in the aftermath of the attack.

Operating costs rose by +0.8% year-on-year, with the rise ex-fuel reaching +3.5%. Fuel costs in 2015 accounted for €6.2 billion, down -6.7% because of the company’s fuel hedging policy. Fuel hedging levels will drop from 63% to 54% over the course of 2016. They are then due to decline sharply over the course of 2017 to just 10% by the end of that year, which will give the group considerable savings, assuming the cost of fuel remains low.

The profit figure was boosted by the group’s share of sales in Amadeus (€218 million) and of several slot pairs at London Heathrow (LHR) (€230 million), but negatively affected by the change in value of the hedging portfolio (-€225 million), unrealized foreign exchange losses (-€360 million) and restructuring costs (-€159 million). The group added that it had maintained strict capacity discipline throughout 2015, with an increase of just +0.7%.

(RASK) “remained volatile,” but saw an increase of +2%. However, there was downward pressure on unit revenues (excluding currency), with large drops in demand from Brazil and Japan; those markets together account for 10% of total capacity.

The depressed oil prices also led to oil- and gas-related customers reducing their travel budgets, particularly to Africa.

Cargo activities continued to be loss-making at -€42 million, but improved over 2014’s figure of -€97 million. Five dedicated freighters were phased out during 2015, with full-freighter capacity dropping -23.3% and the group plans to operate just five freighters by this summer. This reduction should allow the cargo operation to return to an operating breakeven in 2017.

Low-cost carrier (LCC) subsidiary, Transavia (TVA)/(TVF) continued to do well, with passenger numbers rising +9% to 10.8 million and the Netherlands-originating (LCC) is continuing to ramp up its activities in France to combat the activities of (LCC) rivals such as Ryanair (RYR) and EasyJet (EZY).

There was a sharp improvement in third-party maintenance revenues, which rose +26.1% to €1.58 billion over the year.

Net debt for the group dropped substantially, from €5.4 billion in 2014 to €4.3 billion last year.

Looking forward, most of the points in the "Perform 2020" restructuring plan have been achieved, said the group, although negotiation of productivity agreements with some French staff remained to be concluded and the planned -1.5% reduction in costs for 2015 was not met, with only a cut of -0.6% recorded.

News Item A-2: HOP! has begun its eighth international service, and 24th route in all, from its Lyon (LYS) hub, with a 6x-weekly service to Luxembourg (LUX) starting on February. The 441 km sector joins the airline’s other existing routes from France’s second largest city to Venice Marco Polo, Milan Malpensa, Rome Fiumicino, Bologna, Gothenburg, Brussels and Prague. A variety of equipment is earmarked to fly the route which will face no direct competition.

News Item A-3 Air France Industries (AFI) (KLM) (E&M) will develop a certified cockpit mount installation for Emirates Airline (EAD)’s electronic flight bag (EFB) tablet equipment. The retrofit solution will be available to support (EAD)'s fleets of Airbus A380s and Boeing 777s for more than >200 airplanes.

News Item A-4: Air France Industries (AFI) - (KLM) (E&M) and Oman Air (OMR) have signed a new, long-term contract providing flight-hour support for (CFM56-7)s powering 737NGs.

News Item A-5: Air France Industries (AFI) - (KLM) Engineering & Maintenance (E&M) is launching its Maintenance Repair & Overhaul (MRO) Lab Singapore. Partnering with (RAMCO) Systems, the Lab will develop innovative (MRO) products. And Dennis Wetjens is now Managing Director at (EPCOR), the (AFI) - (KLM) (E&M) subsidiary specializing in (MRO) of pneumatic systems and Auxiliary Power Units (APU)s. Also, (AFI) - (KLM) (E&M) and Uni-Top Airlines (UNT) have signed an agreement for support of (CF6-80C2)s on seven A300s. The contract includes repair and overhaul of engines, along with spare engines. A total of 14 shop visits have been scheduled to date.

News Item A-6: (AFI) - (KLM0 (E&M) and SF Airlines (SFA) have finalized an engine support contract covering three (CF6-80C2)s. The contract includes repair and overhaul and spares support.

And (AFI) - (KLM) (E&M) and Air Caraïbes Atlantique have signed a long-term agreement for total care of A330s and A350s. The contract includes line maintenance, "A" checks and "C" checks, component support and engineering support for aircraft and engines.

Malaysia’s Eaglexpress Air has contracted with (AFI) - (KLM) (E&M) to provide component support for six A330s. The contract includes component repair, access to A330 spares pool and a main base kit to be located at Jeddah.

Also, (GMF) AeroAsia and (AFI) - (KLM) (E&M) have signed an (MOU) to develop their partnership in Maintenance Repair & Overhaul (MRO), which now includes (CFM56-7B) overhaul and repair and Boeing 747 "C" checks. The (MOU) covers cooperation in component support, maintenance of (GE90)s, (CFM56-7)s and other (CFM56)s.

(AFI) - (KLM) (E&M) is considering subcontracting maintenance on more 747s to (GMF). JeJu Air (JJA) is expanding its fleet of Boeing 737-800s and will extend its engine maintenance contract with (AFI) - (KLM) (E&M) to a further 18 shop visits for (CFM56-7B)s.

Finally, (AFI) - (KLM) (E&M) and Transavia (TAV) are extending their 737NG component-services contract. The agreement comes under the Component Services Program jointly operated by (AFI) - (KLM) (E&M) and Boeing (TBC).

March 2016: News Item A-1: "(BEA) Report: Air France A320 and (UAV) in Near Miss" by (ATW) Kurt Hofmann, March 4, 2016.

French air accident investigation agency (BEA) has reported what it describes as a serious near-miss incident involving an unmanned aerial vehicle (UAV) and an Air France (AFA) Airbus A320 during its approach to Paris Charles de Gaulle (CDG).

The incident happened February 19 and the flight’s captain (FC) reported seeing the drone, estimating it came within about 5 m of the aircraft’s left wing, according to the (BEA) report.

The aircraft, registration (F-GKXT) operating flight AF1149 from Barcelona to Paris (CDG), was on approach to runway 26L at an altitude of 5,500 feet when the first officer (FC) saw the drone ahead.

The first officer (FC) disengaged the autopilot and the captain informed air traffic control (ATC). The crew (FC) then re-engaged the autopilot and completed the landing at Paris (CDG) safely.

There have been a growing number of near-miss reports involving small (UAV)s near major airports. The problem seems especially acute in Europe and in the USA, where the (FAA) last year introduced new rules governing private, small (UAV) ownership, registration and operation. Typically, authorities are unable to track the drone or its operator; the (FAA) rules are aimed at making them traceable.

News Item A-2: French air traffic controllers (ATC) plan to strike for at least 36 hours, Airlines for Europe (A4E) lobby group said.

(A4E) said this will be the 43rd strike day in France since 2009, resulting in the cancellation of hundreds of flights and creating disruption and extensive delays across the continent.

The French Railway system also plans to strike.

The last French (ATC) strike, from March 20 - 22, caused more than >1,000 cancellations among (A4E) members and caused 500,000 delay minutes/8,333 hours or 347 days across all airlines operating in European airspace during the strike period, according to (A4E).

“It is unacceptable that airlines and their customers can be repeatedly punished by these unjustified strikes. We call on the European Commission (EC) to act immediately to defend consumers,” Managing Director Thomas Reynaert said. He added (A4E) is working on an immediate action plan to minimize strike effects on both local traffic and overflights.

“But we also need the (EC) to remain at the helm of implementing a European Aviation Strategy without disruptions and to the benefit of travelers. This must be a priority,” he said.

Last year, more than >10,000 flights operated by (A4E) members were affected by 28 days of (ATC) strikes in Europe, causing disruptions to millions of passengers.

News Item A-3: Air France (AFA) - (KLM) board of directors submitted the proposed appointments of Anne-Marie Couderc, Alex Wynaendts and Hans Smits as board directors for the annual general shareholders’ meeting on May 19. After 12 years of service, Jean-François Dehecq, Leo van Wijk, and Cornelis van Lede will be stepping down as board directors. Couderc has been chair of the Presstalis board of directors since 2011; Wynaendts is (CEO) and Chairman of the executive board of Aegon NV; and Hans Smits is (KLM) supervisory board Chairman.

News Item A-4: Air France Industries (AFI) (KLM) (E&M) has won a wide-ranging contract with Air Austral (AUX) for support of two Boeing 787s scheduled to enter service in spring 2016. The agreement includes component support, Engineering & Maintenance Control services, plus light and line maintenance.

(AFI) (KLM) (E&M) and Air Corsica (CCM) have signed a long-term contract covering component support for five Airbus A320s. The agreement includes provision of a main base kit, pool access, and flight-hour component repairs.

News Item A-5: "Air France, (KLM) Debut New Cabins on Houston 777 Flights" by (ATW) Linda Blachly, March 31, 2016.

Air France (AFA) - (KLM) are introducing new cabins on Houston flights on Boeing 777 airplanes.

(AFA) is offering new La Première (F), Business (C), Premium Economy (PY), and Economy (Y) cabins on Houston - Paris routes. Air France (AFA)’s nonstop, Houston - Paris route is operated daily on a Boeing 777-300 and a 777-200. The new La Première (F) suites are available on 777-300 airplanes, which (AFA) will operate on select flights to Houston starting April 8.

In the new La Première (F) cabin, (AFA) said guests each have a designer suite with over 32 sq ft of personal space. “(AFA) has dressed each suite with thick curtains, equipped with leather tiebacks. In an instant, the La Première (F) seat turns into a fully flat bed over two meters long. With the curtains closed, the partition raised and soft lighting, the suite offers a calming, private space. During the trip, each guest has a personal 24-inch (HD) touch screen, one of the largest ever seen on board.”

In the Business (C) cabin, (AFA) said it has designed a cocoon in the sky. “The seat adapts to the shape of each individual, from seating position to a real two-meter-long bed. At the heart of the curved structure, each passenger creates their own space, according to their desires. The seat’s soft foam is designed to offer impeccable quality of sleep. With a soft duvet and XXL-sized feather down pillow, everything has been designed to ensure peaceful sleep among the clouds. Each passenger has a wide 16-inch (HD) touch screen.”

In the entirely separate Premium Economy (PY) cabin, (AFA) said more comfortable seat cushions and a multi-position footrest “further enhance the travelers experience as they enjoy +40% more personal space than economy (Y) and Sky Priority access.” In Economy (Y) class, there is a new fully revised seat, with more legroom, a new seat cushion, more comfortable headrests and a wider tray table.

Business (C) and La Premiere (F) passengers will have complimentary access to the Air France (AFA) Lounge at Houston-George Bush Intercontinental Airport.

(KLM) Royal Dutch Airlines has introduced its new World Business (C) and Economy (Y) cabins on its Boeing 747-400 Houston - Amsterdam daily nonstop route.

The revamped World Business Class (C) cabin was introduced on the Houston route in January 2014 and is now available on the entire fleet of 747s, 777-200s and 787s. It offers passengers a full flat seat-bed and plenty of space. Meanwhile, passengers traveling in Economy (Y) class have the option of paying a fee to sit in the Economy (Y) Comfort zone, located in the front of the Economy (Y) cabin and offering additional legroom for recline.

The (KLM) Crown Lounge at Houston George Bush Intercontinental Airport accommodates 98 eligible guests, providing 1,115 sq ft of space for them to work, dine or relax. Features include free Wi-Fi and data ports in every seat; cabins with computers and work space; a buffet with snacks and beverages; a smoke-free environment; and check-in facilities for transit passengers.

April 2016: News Item A-1: Air France (AFA) launched three new routes on March 27 and one on April 1. The routes included an 895 km link between Paris (CDG) and Glasgow (GLA), that will be operated by (AFA)’s A318 fleet. On the same day, (AFA) launched a connection from (CDG) to Biarritz (BIQ). Both new routes from (CDG) will face direct competition from (LCC) easyJet (EZY). Of Air France (AFA)’s four new routes, three will face direct competition. The average weekly frequency of the four routes is nine.

News Item A-2: Air France (AFA) resumes flights to Tehran with 3x-weekly service from April 17. The flights have been suspended since 2008.

News Item A-3: Air France (AFA) - (KLM) Group Chairman & (CEO), Alexandre de Juniac is set to replace the retiring Tony Tyler as (IATA)’s Director General & (CEO) after a unanimous recommendation by the (IATA) board of governors.

The board’s recommendation will be up for confirmation at the (IATA) (AGM) in Dublin taking place June 1 - 3. Following an expected confirmation at the (AGM), de Juniac “will take up duties as the head of the association after a short handover period,” (IATA) said. Andre is not expected to leave Air France (AFA) - (KLM) until July 31.

“I am honored by the confidence of my industry colleagues and mindful of the heavy responsibilities that the Director General & (CEO) bears,” de Juniac said. “Tony Tyler has done a great job at the helm of (IATA) and I am excited to succeed him. (IATA) has a critical role to play in supporting the success of the aviation industry leading advocacy, safeguarding the industry’s money, building the standards that underpin global connectivity and partnering with stakeholders and governments to drive important changes.”

De Juniac has served as Chairman & (CEO) of Air France (AFA) - (KLM) Group since 2013, which followed a two-year stint as Air France (AFA) Chairman & (CEO). He also previously was an executive at Thales (THL) and served as Christine Lagarde’s Chief of Staff when she was France’s Minister for the Economy, Industry & Employment.

“Alexandre will be a great leader for (IATA),” Tyler, who has served five years in (IATA)’s top position, said. “He knows the business well and brings valuable experience from both government and industry.”

Air France (AFA) - (KLM) Group said de Juniac has informed it of his intention to depart the company to accept the position at (IATA). (AFA) - (KLM) said it has initiated a process to determine de Juniac’s successor, who is expected to be named by August 1.

News Item A-4: "Air France Resolves Headscarf Row With Female Staff"
by (ATW) Alan Dron, April 8, 2016.

Air France (AFA) will allow female cabin attendants (CA) to opt out of working on scheduled flights to Iran if they do not want to wear a head covering, as (AFA), the French flag carrier prepares to resume flights to Tehran later this month.

Female cabin crew (CA) had objected to company instructions to wear a head covering at all times, while on the ground in the Islamic nation and in Air France (AFA) uniform, which threatened to disrupt the resumption of services after an eight-year suspension.

Although female staff of most airlines operating into Iran has traditionally worn head coverings as a sign of respect for local laws and traditions, the wearing of Islamic scarves has become a heated subject in France in recent years. They are banned in French state schools and offices.

(AFA) pointed out that in Iran it is a legal requirement that all women must wear a headscarf covering their hair in public places.

Cabin crew (CA) unions had demanded that female staff should not be obliged to work Tehran flights if they were uncomfortable having to wear a scarf while in uniform on the ground in Iran.

(AFA) said that, in the name of respecting the personal values of female (AFA) staff, a female flight attendant (CA) or pilot (FC) assigned to a flight to Tehran could choose not to work it and would be offered the opportunity to work a different service instead. They would have to give advance notice to (AFA) of their refusal to wear a headscarf.

News Item A-5: Air France (AFA) is introducing “Night Service” for its business customers on its night flights from New York (JFK). The new service enables business passengers to enjoy the same meal in the airport lounge as the one served on board, with the meal served at their table in a dedicated private area. During the flight, business (C)-class seats transform into a life-flat bed.

News Item A-6: French air traffic controllers (ATCs) will strike again on April 28, the 44th strike day in France since 2009. Hundreds of flights will be canceled, creating disruption and extensive delays across the continent, Airlines for Europe (A4E) said.

Just 2 weeks after the last walkout in Belgium, French (ATC)s will strike for the 3rd time in a month. “During 2016 (ATC) strikes in Greece, Italy, Belgium, and now again in France have already accumulated up to a full week of disruption. In March and April, the strikes caused over >2,000 cancellations among (A4E) members and will now hit the 1 million minutes delay mark (more than >16,000 hours) across all airlines operating in European airspace,” (A4E) Managing Director, Thomas Reynaert said.

Ahead of this strike, the French Civil Aviation Authority (DGAC) has requested airlines to adapt their flight schedule to and from certain French airports, especially Paris-Orly.

For April 28, Air France (AFA) expects to operate all long-haul flights, all flights to and from Paris Charles de Gaulle, as well as 80% of domestic flights to and from Paris Orly.

Last year, more than >10,000 flights operated by (A4E) members were affected by 28 days of (ATC) strikes in Europe, causing disruptions to millions of passengers.

The negative impact of (ATC) strikes on European aviation is a key issue for (A4E) members, which include Air France (AFA) - (KLM), easyJet (EZY), Finnair (FIN), the International Airlines Group (IAG), Jet2.com (JT2), the Lufthansa Group, Norwegian (NWG), and Ryanair (RYR).

“We will not stop calling on the European Commission (EC) and governments to act immediately to defend consumers,” the (A4E) said. The organization’s key aims are delivering reliable and efficient airspace by reducing the cost of (ATC) provision through completion of the "Single European Sky" and better economic regulation at European Union (EU) level; using new technology to make efficiency savings; and using "Single European Sky" (ATM) Research program (SESAR), funding to drive compliance with the "Single Sky" framework.

(A4E) members transport 500 million passengers each year, operating more than >2,300 aircraft.

May 2016: News Item A-1: Boeing (TBC) delivered the 70th 777 to Air France (AFA).

News Item A-2: Component specialist Avtrade has expanded its inventory consignment contract with (AFI) (KLM) (E&M). Under the terms of the agreement, Avtrade will store and trade more than >7,500 (AFI) (KLM) (E&M)-owned serviceable components and consumables at its UK headquarters for part provisioning, sale, exchange and lease for the Airbus A320 family, A340s, Boeing 737s, 747s, 777s, Bombardier (BMB) CRJs and Embraer (EMB) aircraft.

News Item A-3: See video - "AFA-777 PREMIER - CDG-TYO.jpg"

June 2016: News Item A-1: "French Air Traffic Control Walkout Averted" by (ATW) Victoria Moores, June 2, 2016.

Unions representing France’s air traffic controllers have agreed to cancel three days of strikes planned for June 3 - 6.

European airline lobby group Airlines for Europe (A4E) had previously warned that the June 3 - 6 strike would be the worst of 2016 to date, causing up to 3,000 cancellations or more.

However, a brief note on Eurocontol’s website said: “All the (DGAC) unions have now canceled their notice of strike from Friday June 3 to Monday June 6.”

Europe has been dogged with air traffic control (ATC) strikes through the early months of 2016, causing around one million minutes of delays in total.

News Item A-2: "Europe Divided" by Victoria Moores in "Need I say Moores" blog, June 23, 2016.

Looking around Europe right now, it’s hard to see anything other than fragmentation, with daily aviation strikes and the UK on the brink of deciding on whether to leave the European Union (EU).

This month, I have written nine European aviation strike stories, covering France, Italy, Portugal, and Scandinavia, against the backdrop of the referendum playing out in my UK home market.

There is fragmentation between European companies and their employees; just look at Air France (AFA) and Scandinavian Airlines (SAS). There is fragmentation in our skies which is being fiercely defended by repeated (ATC) strikes. And there is fragmentation between countries, with the UK looking to take back its independence.

Meanwhile, we repeatedly hear about the need for further European aviation consolidation to create economies of scale and spread costs, so we can match the performance of our USA cousins. Two markets, both mature, both have been through tough times, but one is less divided, more stable and more profitable.

But if Europe can’t get internal company politics to work, what hope is there for the market as a whole? Does cultural diversity and national pride mean that fragmentation is unavoidable? If so, how do you make that work in a business sense?

On its mini stage, the aviation industry has shown that carefully managed partnerships can increase scale, cut costs and lead to profit. But that does require giving up a bit of identity. And that requires trust.

News Item A-3: Air France (AFA) pilots (FC) will strike from Saturday, June 11, to Tuesday, June 14, affecting flights operated by (AFA) aircraft.

(AFA) said 25% of its pilots (FC) are expected to strike June 11, but expects to operate more than >90% of long-haul flights, 90% of domestic and around 75% of medium-haul flights to and from Paris-Charles de Gaulle (CDG) that day. However, there may be last-minute cancellations and delays.

The walkout by two unions, (SNPL) and (SPAF), will begin the day after the start of the Euro 2016 soccer tournament in Paris (June 10 - July 10), hosted in France, and which is expected to see tens of thousands of extra passengers flying in from around the continent to watch matches.

The unions are protesting what they call deteriorating working conditions.

As of Friday morning, June 10, (AFA) canceled for Saturday (June 11) three long-haul flights from Paris (CDG) to Osaka Kansai, Hong Kong and one of its two flights to Tokyo.

For the following days, (AFA) will adapt a flight schedule depending on the estimated number of pilots (FC) taking strike action, and publish it the day before. Customers will be informed accordingly.

(AFA) said flights operating aircraft from another airline, including its regional subsidiary HOP!, (KLM) Royal Dutch Airlines, and Delta Air Lines (DAL), are not affected.

(AFA) is offering customers booked on flights between June 11 - 14 the option of changing their trip whether the flight is canceled or not. (AFA) will fully refund flights that are canceled.

Later, Air France (AFA) pilot (FC) unions (SNPL), (SPAF) and (ALTER) announced late on June 17 they would strike again from June 24 - 27. They said the decision to go ahead with a new bout of action was made after a meeting with (AFA) management failed to reach any agreements.

The unions said they had put forward new compromise proposals, but (AFA) refused to make any decisions before the arrival of (AFA)- (KLM)’s new Chairman & (CEO) Jean-Marc Janaillac. However, they added, the company wanted to press ahead with outstanding actions from its "Transform 2015" turnaround plan immediately.

Janaillac is scheduled to take up the new position, when existing Chairman & (CEO), Alexandre de Juniac departs for his new role as (IATA)’s (DG) & (CEO) later this summer.

(AFA) said it regretted the notice of new strike action. The last four-day round of walkouts, which affected around 20% of (AFA)’s flights, ended June 14 and (AFA) said the disruption cost it more than -€40 million/-$45 million.

It added the pilots (FC) had again demanded immediate decisions on the future size of (AFA)’s fleet and investment plan. Moreover, the pilots (FC) were continuing to ask for salary increases and a say in management decisions, an arrangement “found nowhere in the world, and incompatible with responsible business management,” (AFA) said.

July 2016: News Item A-1: Air France (AFA) begins 3x-weekly Paris (CDG) - Oran Airbus A320 service on July 27.

News Item A-2: Air France (AFA) Cabin Crew (CA), Represented by the (SNPNC-FO) and (UNSA-PNC), Plan to Go on Strike July 27 to August 2.

The dispute is over a new collective agreement for the period November 2016 to March 2018. Talks continued late into the night July 21 and, on the morning of July 22, (AFA) management presented a draft agreement with “several advances” toward meeting union demands.

(AFA) (CEO) Frédéric Gagey said the company had “gone as far as it could” in proposing compromises to release the deadlock, but the deadline for the cabin crew (CA) to sign the agreement (which had already been extended to midnight on July 22) passed without resolution.

He added that the call for strike action, at the height of the summer holidays, was “irresponsible” and came at the “worst possible time.”

(AFA) plans to maintain the majority of its long-haul network during the action, although there may be more disruption to short- and medium-haul services.

(AFA) is expected to release details of the estimated impact on July 25, although the revised flight schedule for July 27 is unlikely to be released before July 26.

Flights operated by regional airline HOP!, Dutch sister carrier (KLM) and leisure subsidiary Transavia (TAV)/(TVF) will not be affected.

August 2016: A320-211 (285, F-GFKY) sold to AvTrade for parting out. A340-313X (237, F-GLZM), ferried to Lourdes for storage.

September 2016: News Item A-1: Air France (AFA) is preparing its entry into the long-haul low-cost carrier (LCC) market, following a similar move made by Lufthansa (DLH) earlier this year.

In an interview with "Bloomberg TV", (AFA) - (KLM) (CEO) Jean-Marc Janaillac said (AFA) has been working on such plans for about a year. “The issue is we have new competitors, so how do we address this situation?” he asked. Given the lead times typical for setting up new operations like this, (AFA) likely would not be able to launch the new flights until well into 2017 at the earliest, even if it were to make a quick decision in coming weeks.

Janaillac, who joined (AFA) after Alexandre de Juniac departed to take his new job as (CEO) & Director General at (IATA), plans to present his corporate strategy for the whole group on November 3. Janaillac would likely face a battle within (AFA), if (AFA) tries to set up a (LCC) division, considering that de Juniac was met with resistance from pilot (FC) unions when he established Transavia (TAV)/(TVF) as a Pan-European (LCC).

The creation of Eurowings (EWG) is also central in a longstanding dispute between Lufthansa (DLH) and its pilots (FC). This (LCC) division of (DLH) operates 4 Airbus A330-200s on long-haul leisure routes not served by the parent company. The aircraft, which Eurowings (EWG) operates under a wet-lease arrangement with Sun Express (SNS), are configured with a two-class layout featuring premium economy (PY) and economy (Y) seating.

More and more (LCC)s are entering the long-haul market, including in France. French Blue, owned by Air Caraibes parent Groupe Dubreuil, started Airbus A330 services earlier this month to Punta Cana, Dominican Republic, and La Reunion, France. Norwegian Air Shuttle (NWG) is rapidly growing its transatlantic network, and plans to grow in Asia once it has received USA permits for Norwegian Air International (NAI). Air Asia X (ASX) is preparing a return to Europe as it grows its Boeing 787 fleet. In the USA, JetBlue (JBL) is considering the A321LR for long-haul flying.

Separately, (AFA) said it will operate its first scheduled Boeing 787 flight from Paris to Cairo on January 9. (AFA) - (KLM) has 19 787-9s and six 787-10s on order. The (AFA) 787-9s will be equipped with 30C seats in business class, 21PY in premium economy and 225Y in economy. (AFA) is rolling out a new premium economy (PY) seat as the 787 fleet enters service. The new seat will also be retrofitted to the 777 and A330 fleets. (AFA) - (KLM) is considering upgrades to its A380 cabins, which would be available starting in 2019.

Jens Flottau, jens.flottau@aviationweek.com.

News Item A-2: "Air France (AFA) Navigates a Maze of Labor Tensions, as (KLM) is Quietly Improving" by Airline Weekly (INDEPENDENT WORLDWIDE COVERAGE).

Poor financial results. Heavy indebtedness. And of course, labor unrest. All three come quickly to mind when thinking about Air France (AFA)/(KLM) in its current troubled state. But it’s the French airline, much more so than the Dutch one, where most of these problems fester.

(AFA) 62%, (KLM) 38% (that was the breakdown of each carrier’s revenue contribution to the group in 2015, not counting their Transavia (TAV) subsidiaries and other non-airline business units like cargo, maintenance and catering. (KLM), however, punched above its weight in producing not 38% but 45% of their combined operating profits.

In margin terms, (AFA) earned a 3% result last year, while (KLM)’s result was 4%. Not terribly impressed by the difference? Well, that’s not quite the whole story. Last year was particularly difficult for (KLM) given its outsized exposure to troubled markets in East Africa and the (ASEAN) region, the latter ever more exposed to Gulf carrier encroachment. In fact, (KLM) even underperformed (AFA) in 2015’s first and fourth quarters. But that’s not usually the case. In 2014, (KLM) earned a +$230 million operating profit that helped soothe the pain of a -$413 million loss on the French side. The margin differential then was +2% versus -2%. Operationally too, (KLM) proved critical in keeping people and funds flowing during a two-week (AFA) pilot (FC) strike that fall.

So far this year, (KLM) is again doing the lion’s share of the company’s heavy lifting. In the first six months of 2016, it contributed 38% of revenues. But this time, it contributed 93% of operating profits. (AFA) barely broke even, while (KLM)’s operating margin was 5%. If it were an independent airline, (KLM)’s performance wouldn’t be quite as good as that of British Airways (BAB). But it would be similar to Lufthansa (DLH)’s. Or maybe not. (KLM), of course, is not an independent airline, and its current profits are greatly assisted by the benefits it enjoys from being attached to (AFA) (the amplified schedule utility and greater traffic feed, for example, and the lower prices it pays for airplane and other assets thanks to the group’s muscular purchasing power. Also critical are the revenue synergies it derives from powerful overseas ventures, most importantly one with (AFA), Alitalia (ALI) and Delta (DAL). Indeed, (KLM) knows its fortunes are more secure with (AFA) than without it. And it recognized the perils of loneliness many years ago (1993, in fact, when it pioneered the concept of overseas joint venturing with Northwest (NWA), leading to a USA - Netherlands "open skies pact," the first of its kind). (KLM) then nearly merged with Alitalia (ALI). Shortly thereafter, came a near-merger with (BAB). Finally, in 2004, it combined with (AFA).

The marriage has mostly been a happy one, underpinned by solid if unspectacular profits, growth and labor peace during much of the first decade. But make no mistake: Tensions have simmered in the past few years as (AFA)’s higher cost base and edgier unions exposed shortcomings in the group’s ability to prosper, leading to a string of worryingly poor financial results and that gap between the carrier’s relative profit contributions. Some (KLM) workers, supported by some Dutch politicians, began expressing frustration. This spring, when these tensions were attracting media attention, (IAG) (CEO) Willie Walsh even told "Bloomberg News" that he wished (BAB) and (KLM) had merged after all, adding hints that the (IAG) would still be interested if ever a divorce with (AFA) took place.

Given their deep level of integration, any such break up is highly unlikely. But just its mere mention underscores the growing divergence of their financial results and operational reliability. (KLM), in fact, is doing better financially than (AFA) partly because of (AFA)’s strike-induced operational unreliability. Combine that with all of (DLH)’s strikes, and it’s no wonder that many European business (C) travelers are choosing to fly with (KLM). And given the choice of connecting through Paris or Amsterdam, some loyal to the (AFA)/(KLM) group as a whole, opt for the latter.

That’s only one way in which (KLM) is reaping benefits from its relative success. Executives of the larger (AFA)/(KLM) group are, sure enough, rewarding it and its workers with capacity growth at a time when (AFA) is shrinking. It’s not a lot of growth ((KLM)’s (ASK)s rose just +2% (y/y) last quarter. But it’s better than (AFA)'s -1% contraction.

It’s likewise important to recognize (KLM)’s (y/y) financial improvement, compared to (AFA)’s (y/y) financial stagnation. That was certainly true last quarter, when (KLM) saw revenues drop -3% but operating costs fell -8%. (AFA) experienced a deeper decline in revenues (-6%) and a less impressive fall in operating costs (also 6%). This reflects a number of helpful developments unique to the Dutch side, including the recovery of markets like Kenya and Indonesia, the strength of markets like Sweden (Amsterdam is a leading hub for Scandinavia), the introduction of new planes like 787-9s and E175s and the resilience of Amsterdam’s tourist market (France’s tourism market, by contrast, is struggling due to security fears).

Amsterdam, moreover, has lower costs, more runways and fewer labor and security-related disruptions than at other top hubs like Paris Charles de Gaulle, Frankfurt, London Heathrow and Istanbul. (KLM), meanwhile, has less shorthaul exposure than (AFA) (the French airline’s large shorthaul losses are a big factor in the group’s overall profit weakness. Recently, the (KLM) side of the business got a boost from partnering with India’s Jet Airways (JPL) for connecting itineraries through Amsterdam. And last month, (KLM) began participating in the joint venture (JV) already established between (AFA) and China Eastern (CEA), in conjunction with the Chinese carrier’s new flights to Amsterdam.

Critically, (KLM) has lower costs than (AFA), with the differential widening as (KLM) implements labor reforms. Some minor unrest among ground workers notwithstanding, the group’s Amsterdam operations have been largely strike free, despite management demands for labor concessions. As (AFA) battled with unions, (KLM)'s truck deals with its three major work groups (pilots (FC), flight attendants (CA) and ground workers (MT). The pilot (FC) agreement, most importantly, runs through the end of 2017 and includes productivity improvements, profit sharing and a provision to change pension eligibility from age 56 to 58. Other deals are of shorter duration but likewise include cost concessions and pay freezes.

This should put (KLM) in an even better position to compete at a time when (AFA)’s earning power is in some ways deteriorating, most notably due to the falloff in French tourism. To further improve its network, (KLM) will join its French counterpart in the Tehran market this fall, benefiting from Iran’s small steps toward integration into the global economy, while also adding the Namibian capital, Windhoek. Miami, Dublin, and Colombo are among other adds this winter.

This follows the launch of routes to places like Salt Lake City, a hub for (DAL), and Astana (AKZ) in Kazakhstan. (KLM) has also added some secondary UK cities with poor access to London Heathrow (LHR), ie, Southampton and Inverness, while withdrawing from money-losing routes like Dallas-Fort Worth and Fukuoka.

Nevertheless, (KLM) does have some thorny challenges in areas like pension reform, which is causing some tension with pilots (FC), and growing shorthaul competition from low-cost carriers (LCC) in Amsterdam. Amsterdam happens to be one of Europe’s fastest-growing airports this year, with traffic through June, up nearly +10% from 2015 levels. But that’s less a reflection of (KLM)’s own traffic growth than it is growth from carriers like easyJet (EZY), Amsterdam’s second busiest airline. (IAG)’s Vueling (VUZ) is another (LCC) with a growing base at Amsterdam’s Schiphol airport.

Ryanair (RYR), meanwhile, entered Schiphol for the first time just last year. A large buildup in Scandinavian longhaul capacity, from the likes of (SAS), Norwegian (NWG)/(NAI), Icelandair (ICE), (WOW) Air and Finnair (FIN), certainly does (KLM) no favors, given Amsterdam’s traditional role as a gateway to Scandinavia. Less than <3 hours away by car, meanwhile, is the German city of Cologne, where (DLH) is undertaking a major long haul and short haul buildup of Eurowings (EWG). Air Berlin (BER) is expanding long haul options from nearby Düsseldorf too.

Even within (AFA)/KLM, (TAV)’s growth from Amsterdam puts pressure on (KLM)’s shorthaul yields, especially as (TAV) tries to convert from a more charter/tour operator-oriented model to one more reminiscent of an (EZY) or Vueling (VUZ).

These won’t be easy challenges to meet. Still, they pale in comparison to those faced at (AFA). Then again, (AFA)’s problems are very much (KLM)’s problems too (in the end, what matters is how the group as a whole is performing. And right now, no matter how well (KLM) is doing, the group is not performing well).

News Item A-3: "Air France Announces 787 Introduction Plans" by
(ATW) Alan Dron alandron@adepteditorial.com, September 20, 2016.

Air France (AFA) will begin operations with new Boeing 787-9s on January 9, 2017, with a service from Paris Charles De Gaulle (CDG) to the Egyptian capital of Cairo.

The 787-9 will operate in a three-class configuration, with 30C business, 21PY premium economy and 225Y economy seats. They will have the new standard (AFA) cabins, notably with wider premium economy seats (2.5 cm/1 inch), wider armrests, additional legroom (5 cm/2 inch), and a seat recline of up to 130 degrees.

To introduce the new type to passengers, (AFA), the French flag carrier will operate four, 150-minute round-trip flights from Paris (CDG) on the two days preceding its formal service entry.

For the past two years, (AFA) has been seeking to differentiate itself among competitors by offering upgrades in cabin furnishings and on board service.

This winter, 26 (AFA) Boeing 777s flying long-haul routes will be equipped with the new cabins; by August 2017, that number will rise to 44. New cabins for its Airbus A330 fleet are scheduled to be rolled out from winter 2017. By the end of October, 24 Airbus A320s flying medium-haul routes will be modified; in November, improvements to its 11 Airbus A321s are scheduled to begin. Since May 2016, Air France has been offering table service in its business cabin on selected flights from Paris (CDG) to Singapore and New York (JFK). It will extend this service to Tokyo Haneda services by the end of 2016. The aim is to reproduce service standards in French restaurants, with cabin crew taking individual orders from passengers and tables set for individual service, rather than being presented on trays.

News Item A-4: Air France (AFA) - (KLM) has signed an agreement with connectivity provider Gogo, covering Wi-Fi installation across 124 long-haul airplanes.

Announcing the deal on September 29, Air France (AFA) - (KLM) said Gogo will equip 83 (AFA) airplanes (15 Airbus A330s and 68 Boeing 777s) and 41 from (KLM)’s long-haul fleet (12 A330s and 29 777s).

The installations, which come alongside (AFA) - KLM’s Wi-Fi-equipped 787s, will start at the end of 2017. (AFA) - (KLM) said the airplanes will be equipped with Wi-Fi as well as a free portal that will be accessible via passenger devices, giving access to flight information, travel details and in-flight entertainment (IFE).

“The 2Ku product from Gogo offers a future-proof platform based on the latest antenna technology, bringing flexibility to adapt to growing demands from our customers,” (AFA) - (KLM) said.

(KLM) is already operating 8 Wi-Fi-equipped 787s and Air France (AFA) will receive its 1st 787 on January 9 next year. “The group’s Boeing 787s, which offer Wi-Fi on board, are equipped by Panasonic Avionics, and offer the same portal and products as planned on the rest of the long-haul fleet,” (AFA) - (KLM) said.

SkyTeam (STM) Alliance members (AFA) and (KLM) operate a fleet of 534 airplanes across its 4 brands (AFA), (KLM), Transavia (TVA)/(TVF) and HOP! spanning a network of 320 destinations. In 2015, the Group handled 89.8 million passengers.

October 2016: News Item A-1: Air France (AFA) (CEO) Frederic Gagey is expected to move to become (AFA) - (KLM) Group (CFO), as the Franco-Dutch firm prepares to announce its new strategy.

Gagey has been (AFA) (CEO) since 2013. Sources close to the situation said that Gagey will succeed (CFO) Pierre-Francois Riolacci, who has already announced plans to step down.

The change is thought to be linked with the fragile labor situation at Air France (AFA), which triggered pilots (FC) and cabin crew (CA) strikes over the summer.

Newly appointed Air France (AFA) - (KLM) (CEO), Jean-Marc Janaillac is expected to lead Air France (AFA) on an interim basis until a permanent successor is found.

French newspaper "La Tribune" has tipped a number of potential successors, including Lionel Guerin (Head of (AFA)’s Hop! regional arm), Franck Terner ((Air France Industries (AFA) - (KLM) Engineering & Maintenance President), Nathalie Stubler (Head of low cost carrier (LCC) arm Transavia France), and Alain-Herve Bernard (Air France Head of Medium-haul Business).

An Air France spokeswoman confirmed that (AFA) - (KLM)’s new "Trust Together" strategy will be detailed at the November 3 release of the group’s 3rd-quarter results.

Air France Industries (AFI) (KLM) (E&M) named Vincent Metz as Director Strategy, Robert Pruim as VP Procurement, and Rodolphe Parisot as VP Digital & Innovation.

November 2016: News Item A-1: The Air France (AFA) - (KLM) Group posted +€544 million/+$610.5 million in net income for the 2016 3rd quarter, up +13.1% from €481 million in the year-ago period. Revenue for the quarter was €6.9 billion, down -5% from €7.3 billion in (3Q) 2015.

The Group’s total operating costs were €6.2 billion, down -3.5% from €6.4 billion a year ago; the operating result for the quarter was €737 million, down -16.3% from €880 million in (3Q) 2015.

(AFA) - (KLM) said the operating result was “notably impacted by the 7 day cabin crew (CA) strike in July and August 2016, which had a negative impact of an estimated -€90 million.”

The Group saw passenger numbers for the quarter rise +2.5% year-over-year (YOY) to 26.6 million compared to 25.9 million in (3Q) 2015. Capacity increased +1% (YOY) to 94.1 billion (ASK)s.

For the Group’s passenger network business ((AFA), (KLM) and HOP!), total revenue for the quarter was €5.5 billion, down -7.2% from €5.9 billion in (3Q) 2015. The operating result for the passenger network was €664 million, down -16.8%.

Low-cost subsidiary Transavia (TAV) posted 3rd-quarter passenger revenue of €490 million, up +10.9% from €442 million in the year-ago period. (TAV)’s 3rd-quarter operating result was €92 million, up +19.5% (YOY).

The Group’s cargo business revenue for the quarter was down -16.6% to €487 million compared to €584 million in (3Q) 2015. The division showed an operating loss for the quarter of -€100 million, deepened from a -€81 million loss in the year-ago quarter.

The Group said it “continued to restructure its cargo activity to address the weak global trade and structural air cargo industry overcapacity full-freighter capacity was thus reduces by -22%, leading to a decrease in total cargo capacity of -3.1%.”

In its outlook for the year, the company said its “global context remains highly uncertain regarding the geopolitical and economic environment in which we operate,” citing unit revenue pressure brought on by fuel price volatility, overcapacity on several markets, and “a special concern about France as a destination.”

News Item A-2: Air France (AFA) - (KLM) has appointed Franck Terner, who has been the Air France (AFA) - KLM Executive VP Engineering & Maintenance since (2013-08), as the next (CEO) of Air France.

In a statement dated November 3, but released to the group’s website on November 2, the Franco-Dutch airline group confirmed the anticipated leadership change.

Terner will succeed Frédéric Gagey, who will in turn become Air France (AFA) - (KLM) (CFO), replacing Pierre-François Riolacci whose departure was announced in July.

“The Air France (AFA) - (KLM) and Air France (AFA) boards of directors met on November 2 and decided to change the group's governance, to support the implementation of the "Trust Together" project and to enhance the decision-making process. The functions of Chairman and (CEO) of Air France are now separate, and Jean-Marc Janaillac, Chairman of (AFA) - (KLM) Group has also been appointed Chairman of Air France (AFA).

Terner joined (AFA) in 1988 as a Concorde SST Production Engineer. He then worked his way through a series of Maintenance roles, becoming Head of Aircraft Maintenance at (AFA) subsidiary, Regional in 2002. He later became Executive VP Operations & Support at Regional and, in 2008, he became (COO) of Regional. In 2010, Terner was appointed Air France Industries (AFI) VP and, since July 1, 2013, he has been (AFA) - (KLM) Executive VP Engineering & Maintenance.

“I have complete faith in the qualities of Franck Terner to accelerate the transformation and growth of (AFA), and mobilize all the company's energy around the success of the "Trust Together" project. Franck Terner has spent his entire career in the Group, which he knows perfectly. He will be an excellent leader for (AFA) staff. He has a results-oriented culture and wide experience of social dialogue, which gives him everything he needs to succeed in his mission to serve the growth of (AFA) and the restoration of trust,” Janaillac said.

News Item A-3: Air France (AFA) launched new 2x-weekly, Paris Charles de Gaulle - San José Boeing 777-300 service on November 2.

News Item A-4: "Air France Plans 'Lower Cost' Long-haul Airline to Fight Gulf Carriers" by Victoria Moores moores@penton.com (ATW) Plus, November 3, 2016.

Air France (AFA) is planning a lower cost long-haul airline which will operate 10 airplanes by 2020 in a 2-class layout, under its new "Trust Together" strategy.

Revealing the 1st details of Trust Together on November 3, (AFA) - (KLM) Chairman & (CEO) Jean-Marc Janaillac said one of the group’s 9 strategic priorities was to “regain the offensive in long haul.”

This will be achieved partly by the creation of a new Paris Charles de Gaulle-based long-haul airline. The project, named "Boost," will have a lower cost base than (AFA)’s existing long-haul operation, but Janaillac was quick to stress that the new airline will not be positioned as a "low cost carrier (LCC)."

There will be no 1st (F)-class, but there will be business (C) and economy (Y) cabins, with standards comparable to (AFA)’s current product. The new airline will be a “laboratory” for digital and product innovations. The offering will be “simple, modern and innovative,” with a “100% connected” fleet.

Janaillac said that 35% of (AFA)’s long-haul routes (and 15% of (KLM)’s) are loss-making. (AFA) is being hit hardest on long-haul routes where it is in direct competition with Gulf carriers.

"Boost" is therefore (AFA)’s response to the “attack” of Gulf carriers, which Janaillac said have been aggressively gaining market share under “questionable” and “unacceptable” conditions. “If air travel were part of the World Trade Organization (WTO), we would have filed a complaint. It is an unacceptable situation, period. We are determined to get fairer market conditions,” he said.

The new airline will take over the 10% of (AFA)’s long-haul routes that are posting a “significant deficit.” Under Boost, (AFA) will reopen destinations which have previously been cut and save others that are threatened with closure. Around 30% of the start-up’s operations will be focused on newly-created routes.

Some were expecting Air France (AFA) to launch a long-haul low-cost operation, but Janaillac said this was not the answer, because the worst loss-making routes were to SE Asia that attract a mix of business (C) and leisure (Y) passengers. “If we were to create a long-haul version of a leisure airline like Transavia (TAV), it would be useless in dealing with the competition. Therefore, we are creating an airline with service comparable to (AFA). There will be no first (F) class, but we will have a business (C) class which will be the same as (AFA), with high quality service, but different cost structures to deal with the competition.

“Regarding business (C) class for the new airline, we will have lie-flat beds, but they will not have direct [aisle] access if you have a window seat. This is quite similar to what you find with USA airlines. Compared with the Gulf airlines, this is a different positioning, but we are confident that this will be premium enough to keep our customers,” Janaillac said.

Boost is just a working name; the airline itself will ultimately be branded as Air France (AFA) followed by a “something to be determined.” The start-up will have a “younger, more innovative and trendy image,” and will serve destinations in SE Asia, among others.

The aircraft for Boost will be sourced from (AFA)’s existing long-haul fleet. “The objective is to use new A350s which will be joining the fleet as early as 2019, but that is a bit late. We want to set up the new airline as quickly as possible. Ten airplanes by 2020 is a minimum to allow us to reduce losses on loss-making routes. Afterwards we can increase it, but it won’t be many more than 10 airplanes,” he said.

By stemming those losses, (AFA) hopes to invest the money in growth elsewhere.

Boost will be crewed by (AFA) staff and operate under (AFA) codes. Pilots (FC) will be asked to volunteer to transfer to the new operation. Janaillac said pilots (FC) were previously asked to voluntarily transfer to leisure operation Transavia (TAV) and the group had no problem securing the numbers it needed. Cabin crew (CA) for the Boost project will be employed through a dedicated subsidiary.

Like Transavia (TAV), Boost will have different labor agreements to the mainline operation. Negotiations with staff representatives will begin over the coming weeks, but Janaillac said he was not anticipating any tension and the plan had been reasonably well received by (AFA)’s works council. “They didn’t reject this project. They wanted more information. I would say [the response] was ‘not negative,’ rather than ‘positive.’ These are French unions; it would be a bit worrying if their response was positive. We have a project and we have to work together on it. I would say [their response] was as good as it possibly could be.”

When asked whether there would be a cap placed on the Boost project’s fleet size, Janaillac replied that this would form part of the discussions.

(AFA) - (KLM) wants to grow long-haul by +2% to +3% annually through 2020.

News Item A-5: "Air France - (KLM) Details New Strategy for Group Growth" by Victoria Moores, (ATW) Plus, November 3, 2016.

Air France (AFA) - (KLM) has released a new strategy, which will see the group grow to €28 billion/$31 billion in revenue, 100 million passengers and a mainline fleet of 435 airplanes by 2020. Between 2017 and 2020, the group aims to cut unit costs by >1.5% per annum, which will help support €1.7 - 2.2 billion worth of investments in 2017 and 2018. Digital innovations will also play a key role.

News Item A-6: "Does Air France’s Strategy Go Far Enough?" by Victoria Moores victoria.moores@penton.com in "Need I say Moores," November 4, 2016.

Air France (AFA) - (KLM) has released its new strategy, the latest in a 3-part series, but will this episode deliver the results that are needed? The trilogy of branded strategy plans are beginning to feel like just that (a branding exercise) rather than a solid strategy for change. This latest plan has 9 (yes 9) priorities. (AFA) will launch a new long-haul airline with 10 aircraft to stem losses on routes where Gulf carriers are taking market share. Then, in response to low-cost carrier (LCC) competition, leisure arm Transavia (TAV) will retrench back to its French and Dutch home markets, rather than expanding to new bases across Europe.

The response from analysts during a Novembwer 3 results call was telling. They quizzed (AFA) - (KLM) Chairman & (CEO) Jean-Marc Janaillac on whether the unit-cost saving target (-1.5% per year to 2020) was ambitious enough and if a comparatively small 10-aircraft operation could really make a difference. Janaillac replied that (AFA) would be “very pleased” to hit -3% cost savings over the next few years, but this would be “hard to achieve.” In the best years of the previous strategies, the group hit -2% just once. He said the plan was “ambitious, but realistic” and that 10 aircraft would be enough to curb losses on (AFA)’s worst performing long-haul routes; those where it competes with the Gulf carriers.

Most worryingly, Janaillac said that (AFA) and (KLM) don’t need to operate at the same costs as UK (LCC) easyJet, or the Gulf carriers. This, he said, was thanks to the (AFA) and (KLM)’s positioning, hubs, market share, loyalty program, image and other legacy advantages. “What counts is revenue,” Janaillac remarked.

Really?

(AFA) - (KLM)'s rivals are growing revenue faster, have lower costs and are aggressively pushing to achieve more; it’s hard to see how this plan will miraculously put (AFA) - (KLM) back in the lead. In today’s business environment, cost is king, because price matters most to the passenger, whether traveling for business or leisure.

When it comes to product, (AFA)'s strategy also seems strange. The new long-haul airline will have a business (C) cabin in line with those offered by USA majors, not the Gulf carriers it is being created to take on. “Regarding business (C) class for the new airline, we will have lie-flat beds, but they will not have direct [aisle] access if you have a window seat. This is quite similar to what you find with USA airlines. Compared with the Gulf airlines, this is a different positioning, but we are confident that this will be premium enough to keep our customers,” Janaillac said.

"Premium enough"? Higher costs and a lower-quality product don't seem like a recipe for success. Of course, in all of its strategy-plan creations, (AFA) remains hamstrung by the same problem that has prevented the company from delivering far more ambitious goals; and that’s its unions. Hopefully (AFA)’s new (CEO) Franck Terner, who has worked his way up through the airline can pour oil on those troubled waters!

For as long as (AFA)’s labor issues and costs are not fully addressed, all the strategy plans in the world will merely lead to ‘plus ça change, plus c'est la même chose’ = The more it changes, the more it stays the same.

News Item A-7: Boeing (TBC) has celebrated the delivery of the 1st 787-9 for Air France (AFA) on November 30, marking the 500th 787 delivery, leased through Netherlands-based AerCap (DEA). It will be used on (AFA)’s Paris - Cairo route from January 2017.

The (AFA) - (KLM) Group has ordered 18 787-9s and 7 787-10s, with an additional 12 787-9s leased through AerCap (DEA).

The arrival of (AFA)’s 1st 787-9 is part of (AFA)’s continued renewal of its long-haul fleet. (AFA) - (KLM) (CEO) Jean-Marc Janaillac said the Dreamliner “marks a new stage in the modernization of our fleet. It will offer customers the best of (AFA)'s products and services.”

The 787 is the 50th Dreamliner for AerCap (DEA) and Boeing’s 500th 787.

December 2016: News Item A-1: Air France (AFA) has announced a shakeup of its senior management in the wake of the recent appointment of Franck Terner as (CEO).

(AFA) said December 2 the new organizational set-up would be clearer, “better reflect its priorities,” clarify responsibilities and simplify operating methods. “(AFA)’s current organization has enabled us to make progress, particularly in terms of improving customer relations and the quality of our products and services, and this must be continued,” Terner said. “However, it also has widely recognized limits and complexities. I have therefore decided to initiate a project to change the organization of (AFA), enabling us to drive our Trust Together ambition.”

Terner thanked Executive VP Long-haul Business Bruno Delile, who has decided to leave the Air France (AFA) group, describing him as “a driving force of the successful move upmarket in the long-haul sector.” He also expressed gratitude for the efforts of Lionel Guérin, who is leaving his position as Executive VP of regional subsidiary HOP! “who has ensured the recovery of our point-to-point operations” and those of (COO) & Accountable Manager Eric Schramm, “who has been appointed to another position, for his decisive contribution to the safety of (AFA) flights.”

Terner said it was necessary to move quickly, “in order to return to profitable growth.” Among a batch of priorities he included improving (AFA)’s operational performance and simplifying internal processes. A round-up of senior management moves, which will be effective immediately:

* Alain-Hervé Bernard becomes (COO) & Accountable Manager, replacing Eric Schramm in the latter responsibility from January 1, 2017. Eric will remain in charge of the Medium-haul Business Unit

* Alain Malka becomes Executive VP of HOP! (AFA), replacing Lionel Guérin.

* Anne Rigail is appointed Executive VP C
ustomer from January 1, 2017.

* Gilles Gateau is confirmed in his position of Executive VP Human Resources (HR).

* Jérôme Nanty becomes Executive VP Corporate Secretary & Transformation, handling legal, public affairs, sustainable development and transformation.

* Marc Verspyck remains Executive VP Finance and will be responsible for improving competitiveness.

* Pierre-Olivier Bandet is appointed Executive VP Fleet & Scheduling. Within a month, he has to produce a plan re-casting the scheduling and management of the Air France group fleet. He will also be in charge of preparing implementation of the "Boost" project, which aims to create a long-haul, lower cost carrier. The person ultimately in charge of "Boost" will be appointed soon.

* Gilles Laurent remains Executive VP Flight Operations.

* Eric Caron becomes Executive VP In-flight Services, replacing Anne Rigail from January 1, 2017.

* Elisabeth Hérelier becomes Executive VP Cargo activity, replacing Alain Malka.

* Anne Brachet joins the Air France (AFA) - (KLM) group as Executive VP Engineering & Maintenance, replacing Franck Terner.

* Jean-Charles Tréhan remains Senior VP Communication.

Air France Industries (AFI) (KLM) (E&M) inaugurated a new Materials & Logistics Service Center in Kuala Lumpur.

News Item A-2: Air France Industries (AFI) (KLM) (E&M) has an AirAsia (ASW) contract for component support for up to 304 Airbus A320neos.

January 2017: News Item A-1: INCDT: Air France (AFA) has confirmed that its Boeing 777-200 was struck at the end of its left wing while parked at Toronto Pearson International Airport on January 3 by a Pakistan International Airlines (PIA) aircraft maneuvering to reach its parking stand. The (PIA) aircraft type was not identified.

“Only the (AFA) crew, who was preparing for the flight to Paris, was on board the 777. None of them were injured," (AFA) said. "The passengers were taken care of by (AFA) ground staff in Toronto. A maintenance team will be dispatched to Toronto as soon as possible to repair the 777 in accordance with Boeing (TBC).”

A Greater Toronto Airports Authority spokeswoman, who also confirmed the incident, said the incident occurred at the airport’s Terminal 3 at around 6 pm local time on January 3.

According to media reports, the (PIA) aircraft, operating as flight PK7889, had arrived from Lahore, Pakistan.

News Item A-2: Air France (AFA) - (KLM) has sold 100% of its London Heathrow (LHR) Ground Handling Subsidiary, Cobalt Ground Solutions, to French company Groupe (CRIT).

Cobalt Ground Solutions was founded from the merger of 2 (AFA) and (KLM)’s ground handling subsidiaries ((AFSL) and the (KGS)) in 2009.

The company performs check-in, ticketing, baggage and ramp handling at LHR’s terminals 3 and 4, as 1 of 8 ground handlers at the airport. Its customers include Aeromexico (AMX),(AFA) - (KLM), China Southern (GUN), Delta Air Lines (DAL), Etihad Airways (EHD), Japan Airlines (JAL)/(JAS), Jet Airways (JPL), Kenya Airways (KEN), (KLM) Cityhopper, Korean Airlines (KAL) and Virgin Atlantic (VAA).

On January 6, (KLM) (CFO) Erik Swelheim confirmed the sale to Groupe (CRIT)’s Group Europe Handling subsidiary has been completed, following the signing of a memorandum of understanding (MOU) in November 2016.

Groupe (CRIT) said the acquisition will rank as the 3rd largest ground handler at (LHR). The French firm has >130 airlines customers and employs 3,000 staff. It provides services at Nice, Paris Charles de Gaulle and Paris Orly through Group Europe Handling, as well as at London City, Dublin and Shannon through a company called Sky Handling Partner. The group is also active in Congo, the Dominican Republic, Gabon and Sierra Leone.

“The integration of Cobalt Ground Solutions, to be effective on January 1, 2017, would bring to the airport division of the group additional sales >€40 million/$42.2 million,” Groupe (CRIT) said, when it announced the (MoU) in November.

(AFA) - (KLM) has already completed 2 other recent disposals, selling stakes in catering firm Servair and industry Information Technology (IT) provider Amadeus.

News Item A-3: Lobby group "Airlines for Europe" (A4E) has completed its 1st year of operations, bringing both successes and some ongoing frustrations. (A4E) was started by Europe’s 5 major airline players: Air France (AFA) - (KLM), UK-based easyJet (ESY), the International Airlines Group (IAG), Lufthansa (DLH), and Irish low-cost carrier (LCC) Ryanair (RYR) in January 2016 to focus on key policy areas, including airport charges, air traffic control (ATC) strikes and taxation.

News Item A-4: Air France (AFA) cancelled 2 orders A380s and ordered 3 A350-900s.

News Item A-5: See video:

March 2017: News Item A-1: "European Commission (EC) Re-imposes Cargo Cartel Penalties" by Alan Dron alandron@adepteditorial.com, March 17, 2017.

The European Commission (EC) has reinstated fines totaling €776 million/$834 million on 11 airlines for operating a price-fixing cartel on air freight from 1999 to 2006. More legal hearings are likely, as at least 1 of the carriers immediately said it would appeal the decision.

The (EC) originally imposed the penalties in November 2010, but these were annulled by a decision of the European Union’s (EU) General Court in December 2015 on procedural grounds, which ruled there was a technical discrepancy in the prosecution. In a March 17 announcement, the (EC) said it had resolved the discrepancy and was re-imposing the financial penalties on 11 air cargo carriers: Air Canada (ACN), Air France (AFA)/(KLM), British Airways (BAB), Luxembourg-based Cargolux (CLX), Hong Kong flag carrier Cathay Pacific Airways (CAT), Japan Airlines (JAL)/(JSA), (LAN) Chile, Dutch cargo carrier Martinair (MTH), Australia's Qantas (QAN), (SAS) Scandinavian Airlines and Singapore Airlines (SIA).

The (EC) said that a 12th member of the cartel, Lufthansa (DLH) and its subsidiary Swiss International Air Lines (CSR), was spared from the financial penalties after it applied for immunity in 2005 and revealed details of the alleged arrangements between the airlines.

These were said to consist of collusion between the airlines at both bilateral and multilateral levels to fix the level of fuel and security surcharges on cargo. After the initial verdict, all the airlines except Qantas (QAN) appealed. The financial penalty thus became final for QAN). Millions of businesses depend on air cargo services, which carry >20% of all (EU) imports and nearly 30% of (EU) exports,” (EC) Commissioner Competition Policy Margrethe Vestager said. “Working together in a cartel rather than competing to offer better services to customers does not fly with the (EC). Today’s decision ensures that companies that were part of the air cargo cartel are sanctioned for their behavior.”

The (EU) can fine companies participating in cartels up to 10% of their revenue in the year preceding the adoption of a verdict. (SAS) immediately said it would appeal. “We strongly question the European Commission’s move to re-impose a decision that has already been annulled once by the [General Court],” (SAS) General Counsel Marie Wohlfahrt said. “Throughout the entire process, (SAS) has cooperated with the (EC) and, for >11 years, has argued against the (EC)’s perception that (SAS) Cargo had participated in a global cartel.”

Nevertheless, the fine would be recognized as a nonrecurring expense by (SAS) in its earnings for (2Q) 2016/2017. Air France (AFA) - (KLM), which will be fined €325 million if the penalties become final, said it would analyze the new decision and whether to appeal it again at the General Court. It added that the fines had been covered in its financial accounts since 2010.

News Item A-2: Air France (AFA) expects few disruptions to its flights on March 18, despite a strike of almost 30% of its cabin crew (CA) members. (AFA) the national carrier said March 17 that all its long-haul services would operate as normal, together with 98% of its short- and medium-haul flights. The industrial action continued until March 20.

However, Air France warned there could be last-minute cancellations and delays as an estimated 29% of cabin crew from several unions took industrial action. “Difficulties with crew compositions may also limit the number of passengers per flight,” it added. Flight schedules for March 19 - 20 were published the day beforehand and customers were informed of any disruptions to their planned flights.
Air France (AFA) flights operated by aircraft from another airline, including its regional subsidiary HOP!, and were not affected by the strike action.

A major cabin crew (CA) strike at (AFA) in summer 2016 cost the airline >$100 million.

News Item A-3: Air France (AFA) has launched direct flights from its Paris CDG (CDG) hub to Accra (ACC) in Ghana, increasing (AFA)’s presence in the Europe - Africa market. (AFA) is starting the route 3x-weekly initially operated by its 208-seat A330-200s, but later this month it will switch the airplane type to its larger 312-seat 777-200s. The Air France (AFA) - (KLM) Group now offers 10 flights between Europe and Ghana, with (KLM) operating daily from its Amsterdam hub. The 4,830 km sector started on February 28 and faces no direct competition.

News Item A-4: Air France (AFA) - (KLM) named Stéphane Ormand to the executive position of VP & General Manager Air France (AFA) - (KLM) USA.

April 2017: News Item A-1: Air France (AFA) - (KLM), Singapore Airlines (SIA) and the latter’s regional subsidiary SilkAir (SLK) have signed a memorandum of understanding (MOU) to code share on each other’s flights. The agreement is scheduled to become effective April 27, subject to regulatory approvals.

(AFA) will add its AF code to Singapore Airlines (SIA)-operated flights beyond Singapore to Melbourne and Sydney in Australia, as well as on SilkAir (SLK)-operated flights to Kuala Lumpur and Penang (Malaysia) and to Phuket (Thailand).

In return, (SIA) will add its SQ designator to (AFA)-operated flights beyond Paris Charles de Gaulle airport to 10 European destinations: Bordeaux, Lyon, Marseille, Nice, and Toulouse in France; Aberdeen, Edinburgh and Newcastle in the UK; Lisbon (Portugal) and Madrid (Spain). The agreement is intended to provide customers more options and seamless connectivity when traveling between Europe, SE Asia and Australia.

The development is the latest in a series of moves by (SIA) to enlarge or extend its portfolio of code share agreements with major carriers, including the Lufthansa Group, (SAS) Scandinavian Airlines and Russia’s (S7) (SBR) Airlines.

(AFA) and (SIA) also intend to explore the possibility of expanding the code share to other airlines within their respective groups. Also under consideration is the possibility of members of (AFA) - (KLM)'s "Flying Blue" and (SIA)’s "KrisFlyer" frequent flyer schemes earning points on the new code share sectors.

(AFA) - (KLM) Senior VP Alliances Patrick Roux said the agreement will “significantly improve the connections for (AFA) customers from Singapore to Australia. This kind of partnership is part of our aim to expand our market position and increase our range of destinations for our customers all around the world.”

Welcoming the “significant benefits” to passengers as a result of the new code share agreement, (SIA) Senior VP Marketing & Planning Tan Kai Ping said the agreement “provides a strong foundation for future commercial cooperation opportunities between our 2 airline groups.”

News Item A-2: Air France (AFA) has taken delivery of its 2nd Boeing 787-9, which is scheduled to enter revenue service May 1 to Montreal.

The 787-9 was handed over to (AFA), the French national carrier at Boeing's Charleston, South Carolina plant and ferried to its hub at Paris Charles de Gaulle April 20.

(AFA)'s 1st 787-9 was delivered in December 2016; +3 more are scheduled to join the fleet by the end of 2017.

(AFA)'s initial 787-9 is used on routes to London Heathrow and Cairo; its next destination is scheduled to be the busy domestic route of Lyon at the end of May.

As the 787 fleet grows, so will (AFA)'s route network, with the winter 2017 timetable including services to several West African cities, as well as its 2nd North American destination of Boston.

Early 2018 will see the 787-9 launching services to São Paulo, Brazil.

(AFA) operates the 787-9 in a 3-class configuration (30C business-class, 21PY premium-economy and 225Y economy seats.

The new airplane features on board Wi-Fi, although this will be a chargeable extra, with prices varying from EUR5 and EUR30/US$5.35 to US$32.10, depending on the level of service required by passengers.

News Item A-3: "Investigators Examine Air France A340’s Abnormal Takeoffs" by Thierry Dubois, (ATW) Plus, April 25, 2017.

INCDT: Over a 4-week period, an Air France (AFA)-operated Airbus A340-300 had 2 abnormal takeoffs from Bogota’s El Dorado International Airport. The length of runway the aircraft used was well above standards. The French Bureau of Enquiry and Analysis for Civil Aviation Safety (BEA) has classified the events as “serious incidents.” The (BEA) is investigating the incidents, and has asked Air France (AFA) and Airbus (EDS) to participate.

May 2017: Air France (AFA) has given more details of its "Boost" project, revealing plans to launch the new airline with 5 Airbus A320s in winter 2017. The Boost project was unveiled as part of an (AFA) strategic plan in November 2016 in a bid to regain the offensive in the face of strong Gulf carrier competition and to stem losses on (AFA)’s weakest long-haul routes.

(AFA) is still waiting on agreement from its pilots (FC), but Chairman Jean-Marc Janaillac gave more information on the plans during a recent investor day and separate shareholders’ meeting. Under the current plan, Boost’s real name will be revealed in summer 2017, paving the way for an operational launch in winter 2017. Boost will start with a fleet of 5 A320s or A321s, serving 3 to 5 routes and feeding the group’s European hubs. Destinations such as Turkey, Spain, Italy and Germany are being considered.

This will be followed by a long-haul launch in summer 2018, most likely with 3 wet-leased Air France A340s as an interim measure before (AFA)’s order for 21 A350s begins to deliver in August 2019. The A340s will be freed up as (AFA) transitions to its new Boeing 787s.

At the same time, Boost’s mid-haul fleet will be stepped up to 10 aircraft. By 2020, Janaillac said the new airline will operate 28 aircraft, 10 long-haul and 18 medium-haul, representing about 8% of (AFA)’s 350-aircraft fleet and 10% of the group’s flying. All of Boost’s aircraft will be equipped with Wi-Fi.

Boost will be a lower-cost (but not low-cost) achieving ex-fuel unit cost savings of -15% on medium-haul and -18% on long-haul, compared with (AFA). The airline will be “agile” and “innovative,” aimed at winning back market share from Gulf and long-haul, low-cost rivals (particularly from younger-generation millennials travelers. Mid-haul flights will be operated in a single class with paid catering, while long-haul flights will be dual class).

(AFA) said the Boost product “must be perceived as more accessible, different but not downgraded.” The new airline will be “completely different” to its mainline operation, despite acting as a feeder, and “not a similar product” to short-haul leisure carrier Transavia (TAV).

“It will focus on ultra-competitive routes, with a mix of Asian routes in competition with the Gulf carriers and the opening of new routes,” (AFA) said.

The operation will serve a mix of business and leisure markets, while avoiding “real business destinations” like New York or “real holiday destinations” like Mauritius. Instead, Boost will be used to reopen routes which have been closed because of poor profitability, with 70% of the long-haul network being made up of current loss-making routes and the remaining 30% being new destinations.

The airline will target destinations such as Bangkok and Kuala Lumpur in SE Asia, where the mainline carrier is facing Gulf competition, or where the routes “do not work as they should.” “The Air France Group must react, as 35% of its long-haul routes and 80% of its medium-haul routes are not profitable. 10% of its long-haul network and 20% of its medium-haul network generate €300 million in losses every year.”

Boost will protect hub feed, the airline added, and enable the (AFA) Group to expand long-haul 10% by 2020. (AFA) plans to achieve the necessary cost savings by agreeing €40 million in annual cost savings with its pilots, falling to €30 million ($33 million) by 2020. Cabin crew (CA) will be sourced from outside the company, with recruitment starting in summer 2017, securing a -20% saving on salaries and a -20% saving through improved productivity. Ground handling will be simplified and largely outsourced.

August 2017: News Item A-1: "Air France (AFA) - (KLM) & Virgin Atlantic (VAA): Culture Clash?" by Victoria Moores victoria.moores@penton.com, July 28, 2017.

Air France (AFA) - (KLM) pulled a surprise move, announcing plans to acquire 31% of UK long-haul carrier Virgin Atlantic (VAA), but how will the partnership play out in terms of culture and strategy?

From a strategic standpoint, the acquisition joins up a few SkyTeam (STM) alliance dots. (AFA) - (KLM) has a strong relationship with USA major Delta Air Lines (DAL), which in turn has a maximum 49% stake in Virgin Atlantic (VAA). Meanwhile, SkyTeam (STM) alliance members (DAL) and China Eastern (CEA) are each buying 10% of Air France (AFA) - (KLM).

There are definite gains to be had on both sides of the Channel. (VAA) will finally get the short-haul feed it has been craving for years, since its failed attempts to buy UK short-haul carrier bmi. Meanwhile, Air France (AFA) gets a solid London foothold to add to its Paris and Amsterdam hubs.

But do equity partnerships truly work? The "Qualiflyer Group" tried this strategy. It failed. Air Afrique (AFR) also tried it and failed.

Another equity investment story is playing out at the Etihad (EHD) Group, which has just offloaded its stake in Swiss regional Darwin Airline (flying as Etihad Regional). Meanwhile, 2 other investments: Alitalia (ALI) and airberlin (BER) continue to bleed cash, contributing to Etihad (EHD)’s -$1.87 billion net loss for 2016.

The Lufthansa (DLH) Group and the International Airlines Group (IAG)’s portfolio of airline brands seem to be better examples of industry consolidation, but these are typically full-control ventures.

How much strategic benefit do smaller (but significant) equity stakes truly bring, compared with non-equity joint ventures?

Also, how will this fit with the UK’s plans to exit the European Union (EU) (Brexit), if UK carrier Virgin Atlantic (VAA) has 79% foreign ownership (49% Delta (DAL) and 30% (AFA) - (KLM))?

Then there’s the problem of cultural fit. (AFA) - (KLM) and (VAA)’s cultures are very different. (AFA) trades on its lengthy history, exuding a certain elegance and grace. (KLM) is more in line with (VAA), with an edgy, modern and slightly rebellious personality.

But here’s the rub. Air France (AFA) and (KLM) joined forces in 2004 and (despite 13 years together) the 2 companies are still batting a serious cultural divide. How well will (AFA) mesh with (VAA)?

News Item A-2: Air France (AFA) has begun testing an immersive in-flight entertainment (IFE) system with virtual reality headsets on Airbus A340 business-class (C) service between Paris Charles de Gaulle and St Martin.

The new (IFE) system, which is a partnership between (AFA), the French flag carrier and startup company SkyLights, allows customers to enjoy 3D and 2D films or series in their own private movie theatre in isolation from the rest of the cabin. 4 headsets are offered on board with a selection of nearly 40 films and series.

Air France (AFA) said the trial run “will be a valuable learning experience for the company, and confirms the importance of improving the customer experience with original and innovative solutions.”

Following the test period, this new (IFE) system could be rolled out on other flights in the months ahead.

October 2017: News Item A-1: "China Eastern (CEA) and Delta (DAL) Complete Air France - KLM Buy-in" by (ATW) Victoria Moores victoria.moores@penton.com, October 5, 2017.

SkyTeam (STM) Alliance members Air France (AFA) - (KLM), Delta Air Lines (DAL) and China Eastern Airlines (CEA) have completed a series of share transactions aimed at strengthening their strategic partnership.

Under the agreement, which was originally announced July 27, (CEA) and (DAL) are each taking a 10% stake in (AFA) - (KLM), which will in turn acquire 31% of UK-based long-haul carrier Virgin Atlantic (VAA). “Each of (CEA) and (DAL) now holds 10% of (AFA) - (KLM)’s share capital and has consequently 1 director representing it at (AFA) - (KLM)’s board of directors,” (AFA) said.

>75 million new (AFA) - (KLM) shares have been admitted to the Euronext Paris and Amsterdam stock exchanges, injecting €751 million/($893 million) into (AFA) - (KLM). “This operation is an integral part of the "Trust Together" project, allowing (AFA) - (KLM) to regain the offensive, to reinforce its commercial integration with its principal partners and to continue improving its financial structure,” (AFA) - (KLM) said.

News Item A-2: "Air France Continues Long-haul Drive with Vietnam Airlines Joint Venture" by Reuters, October 10, 2017.

Air France (AFA) signed a new joint venture (JV) deal with Vietnam Airlines (VIE) and said it was in advanced talks with India's Jet Airways (JPL) over a partnership as part of efforts to boost its long-haul network.

The (JV) with (VIE), due to start from November depending on approval from authorities, builds on code shares that have been in place since 2010 and will see the 2 airlines coordinating their flight schedules to offer customers better connecting flights.

(AFA) is also looking at working more closely with Indian carrier Jet Airways (JPL), with which it has had a code share since 2016. "We are in advanced talks with (JPL) to see how we can strengthen our co-operation," (AFA) (CEO) Franck Terner told "Reuters."

Parent company (AFA) - (KLM) is currently seeking ways to boost its position on long-haul markets and compete against Gulf carriers.

It is launching a new budget brand, "Joon," to fly short and long-haul routes and in July rejigged its North Atlantic alliance in a 3 way deal with Delta (DAL) and Virgin Atlantic (VAA).

As part of that shake-up, (DAL) and China Eastern (CEA) have each taken a 10% stake apiece in the Franco-Dutch airline. "There is still pressure on prices on routes heading east," Terner said. "The joint venture with Vietnam Airlines (VIE) will help us to strengthen our position and better mitigate this pressure on prices."

Terner said a similar stake deal to that signed with (DAL) and (CEA) was not planned with (VIE) or (JPL).

(VIE) said it hoped the (AFA) (JV) would lead to similar partnerships with other airlines in the Skyteam (STM) Alliance and with Japan's (ANA) (9202.T), which bought an 8.8% stake in the carrier last year.

"This is a model that when established will help (VIE) soon have similar contracts in the Asia region, hopefully including the USA as well," (VIE)'s (CEO) Duong Tri Thanh told reporters.

(AFA) and (VIE) did not provide further details on the revenue sharing arrangements.

News Item A-3: Air France (AFR) began services from Montpellier (MPL) to Algiers (ALG) on October 30. The 769 km sector will be served 2x-weekly (Mondays and Saturdays) using (AFA)’s A319s and A320s. (AFR) faces direct competition on this sector in the form of Air Algérie (ALG), which also operates 2x-weekly.

News Item A-4: (AFI) (KLM) (E&M) has a (LOT) Polish Airlines’ contract to provide Boeing 737NG and 737 MAX component support.

November 2017: News Item A-1: Stronger performances in Asia and Latin America were 2 of the main factors behind the Air France (AFA) - (KLM) group of airlines posting net profits of +€552 million/+$643 million for (3Q) 2017, up +1.5% on the year-ago period. While passenger unit revenue improved +3.7% overall compared to a year previously, the stand-out figures were in long-haul, where premium class unit revenues rose by +8.3%, compared to a +3.1% rise in economy class.

News Item A-2: (AFI) (KLM) (E&M) has a Sichuan Airlines (SIC) contract to provide Airbus A350 component support and component support contract from IndiGo (IGO) for 30 ATR 72-600s.

Fleet:
(definitions)

Click below for photos:
AFA-747 DATA
AFA-747-400ERF
AFA-767-300
AFA-777-200
AFA-777-200F-SEP08
AFA-777-300ER
AFA-777-300ER - 2016-09.jpg
AFA-777-328ER-APR09
AFA-777-APR09
AFA-787-9 - 1st 2016-11.jpg
AFA-A318
AFA-A318-1
AFA-A318-111
AFA-A319 - 2013-10
AFA-A320-2011-09
AFA-A320-214 - 80 YRS - 2013-10
AFA-A321 - 2015-12.jpg
AFA-A330-200-2011-05
AFA-A330-301
AFA-A340
AFA-A340 - MAHO BEACH ST MAARTEN
AFA-A340-300
AFA-A350 - 2013-12
AFA-A350-900-2011-09
AFA-A380 TO JFK 2009-12
AFA-A380-861-1ST
AFA-A380-JUL09
AFA-CONCORDE 1
AFA-CONCORDE-SST-A
AFA-CONCORDE-SST-B
AFA-CONCORDE-SST-C
AFA-CONCORDE-SST-D
AFA-E190 - HOP OPS 2013-11
AFA-SST-SUNSET-A

November 2017:

1 727-222 (JT8D) (1665-22085, /80 LX-IRD) WET-LST (IAF).

0 727-228 (JT8D) (1638-22084, /80 F-GCDD), GROUNDED. RETIRED.

0 737-2K5 (JT8D) (773-22597, /81; 792-22598, /81), EX-(HAP), ST (TIA), LST (ALA).

0 737-228 (JT8D) (930-23000, /82), (22597, 22598, 22301, 22303, 22309, 22311, 22503, 22792, 22793, (TIA) LSD), (937-23002; 943-23005; 971-23011; 1135-23349; 1267-23504; RTND (TIA) 2000-02), 23009 RTND TASFUND 2000-09) (23003; 23503 RTND (FSB) 2000-11). 23010 RTND (TIA) 2001-03, 23011; 2001-04.

1 737-33A (CFM56-3B1) (1436-23635, /88 F-GFUA; 1597-24027, /88 F-GFUD; 2065-25118, /91 F-GFUJ; 1595-24026, /88 F-GHVM; 2153-25138, /91 F-GHVN; 1556-24025, /88 F-GHVO), (AWW) LSD. SOLD 25138 2001-04. 24026 RTND 2004-02. 24025 RTND 2004-05. 24027 RTND 2004-06 LST (APZ). 25118 RTND 2004-11. 130Y.

1 737-36N (CFM56-3C1) (2976-28672, /98 F-GRFA; 2995-28673, /98 F-GRFB; 2996-28569, /98 F-GRFC), (GEF) LSD 1998-02. 28672; 28673; RTND (GEF) 2003-01. 130Y.

6 737-5H6 (CFM56-3C1) (2327-26445, /92 F-GJNQ; 2358-26446, /92 F-GJNR), EX-(MAS), 1999-04. (2511-26454, /93 F-GJNX), (GEH) 6 YR LSD 1999-11. (2527-26456, /93 F-GJMY) (2484-26448, /93 F-GJNL, 2000-08), (2654-27356, /94 F-GJNP), (GEF) 5 YR LSD 2000-09. 2503-26450, /93 F-GJNZ, 2001-04. 26456 RTND, LST (VAR). 112Y.

14 737-528 (CFM56-3C1) (2099-25206, /91 F-GJNA). 25234 RTND (GEF) 2004-11, LST (ARG). 25235 RTND (GEF) 2005-01, LST (ARG). 25206; 25227; LST AVIAPRAD 2007-07. 112Y.

1 737-53S (CFM56-3C1) (3083-29073, /98 F-GJNS; 3086-29074, /98 F-GJNT; 3101-29075, /99 F-GJNU), (PEB) LSD. 29074 RTND LST (ENA) 2004-02. 29075 RTND 2004-03, LST (BAU). 112Y.

0 737-548 (CFM56-3B1) (2427-26287, /93 F-GJNV), EX-(ARL), (TIA) LSD 1999-03 (2463-25165, /93 F-GJUA), 2001-04, EX-(BRT), (ILF) 5 YR LSD). 26287 RTND 2004-04. 25165 RTND, LST (LZB) 2005-04. 112Y.

7/7 ORDERS 737-700 (CFM56-7B), (KLM) OPS.

0 747-128 (200-20541, /73), 1 LST (FOI), 252-20954, F-BPVP PARTED OUT 1999-05, 20798 PARTED OUT 2000-02, F-BPVJ TO LE BOURGET AIR MUSEUM 2000-04.

0 747-2B3 (CF6-50E2) (518-22514, /81 F-BTDG; 521-22515, /81 F-BTDH; 337-21515, /78 F-GPAN; 388-21835, /79 F-GBOX), EX-(UTA). ALL 4 RETIRED BY 2002-04. 21385 RTND (ARK). FREIGHTER.

0 747-228BC (CF6-50E2) (303-21326, /77) (22794). 22678 RTND (TCI) 2003-02, LST (SOF). 21537 SCRAPPED 2003-08. 21731 BROKEN UP 2003-09. 21745 WFU AT VATRY 2004-10. 21982 WFU 2004-11. 25082 RETIRED FOR SPARES 2005-01. 22272 TO (PLL) 2005-03. 23676 TO (PLL) 2005-04. 21787; ST (SOF) 2006-01. 8F, 41C, 336Y.

0 747-267B (493-22429, TF-ABP), (AID) WET-LSD 2001-06. RTND.

0 747-3B3BC (CF6-50E2) (632-23413, /86 F-GETA "BIG BOSS;" 641-23480, /86 F-GETB), 22C, 485Y.

0 747-4B3B (CF6-80C2B1F) (741-24154, /89 F-GEXA), ALL TO BE RETIRED BY 2016-01. 13F, 58C, 322Y.

0 747-4B3BC (CF6-80C2B1F) (864-24155, /91 F-GEXB). ALL 6 ST DEUCALION AVIATION 2008-02 FOR CONV BY (IAI) TO F FOR "AEROLOGIC" OPS. 13F, 58C, 319Y.

0 747-406ERF (1382-35233, F-GIUF), EX-(KLM), (GUG) LSD. FREIGHTER.

0 747-428BCF (CF6-80C2B1F) (25238, F-GISA), FERRIED VATRY - PARIS (CDG) 2010-06. ALL WHITE COLORS. FREIGHTER.

0 747-428 (CF6-80C2B1F) (1325-32868, /03 F-GITH; 1327-32869, /03 F-GITI; 32871, F-GITJ, 2004-04), (ILF) 6 YR LSD. ALL 3 RETIRED IN 2016-01. 13F, 58C, 321Y.

0 747-428ERF (CF6-80C2B5F) (1315-32866, /02 F-GIUA; 1317-33096, /02 F-GIUB; 1318-32867, /02 F-GIUC), (ILF) 6 YR LSD. 33096; LST (ABC) AS (VQ-BFX) 2009-11. FREIGHTER.

0 747-428ERF (CF6-80C2B5F) (32870, /04 F-GIUD; 1361-33097, F-GIUE, 2005-06), (ILF) 6 YR LSD. FREIGHTER.

1 767-3Q8ER (PW4060) (355-24745, /91 F-GHGF; 378-24746, /91 F-GHGG), EX-(UTA). (ILF) LSD. 24746 RTND (BBB) 2003-04. 26C, 184Y.

0 767-328 (CF6-80C2B6F) (493-27135, /93 F-GHGI; 497-27136, /93 F-GHGJ). 27135 WFU 2003-06. 27136 RTND, LST (HOL) 2002-05; LST (ZOM) 2004-01. 26C, 185Y.

0 767-37EER (PW4060-1) (385-25077, /91 F-GHGH), EX-(AEZ)/(UTA), (PSS) LSD. FOR SALE OR LEASE (twiley@skyleasing.com). 26C, 184Y.

1 767-383ER (263-24358, TF-ATT), (AID) WET-LSD 2003-02.

0 767-300ER, (CBD) WET-LSD 2000-09, RTND.

20 +/1 OPTION 777-228 IGW (GE90-92B) (129-29002, /98 F-GSPA; 133-29003, /98 F-GSPB; 138-29004, /98 F-GSPC; 187-29005, /98 F-GSPD; 189-29006, /99 F-GSPE), 2 (ILF) 5 YR LSD. 12F, 56C, 202Y.

5 +10 ORDERS 777-228ER (GE90-94B) (331-28682, /01 F-GSPQ; 367-28683, /01 F-GSPR), (ILF) 5 YR LSD. 12F, 56C, 202Y.

3 +4/3 ORDERS 777-228F (GE90-110B1L) (718-32967, F-GUOA, 2009-11; 732-32965, F-GUOB, 2009-02 - - SEE PHOTO - - "AFA-777-200F-2008-09;" 752-32966, F-GUOC, 2009-02), 32969; ST (FED) 2010-03. FREIGHTER.

44 +9/7 ORDERS 777-328ER (GE90-115B) (28683, F-GSPR, 4/04; 32306, F-FSPS; 32711, 2005-02; 466-32723, F-GSQA, 2004-04; 478-32724, F-GSQB, 2004-05; 32727, F-GSQC, 2004-06; 32725, F-GSQI, 2005-03; 490-32726, F-GSQD, 2004-09; 492-32851, F-GSQE, 2004-10; 494-32849, F-GSQF 2004-11; 32850, F-GSQG, 2005-01; 32852, F-GSQJ, 2005-04; 530-32845, F-GSQK, 2005-11; 545-32853, F-GSQL, 2005-12; 558-32848, F-GSQM, 2006-03; 565-32960, F-GSQN, 2006-05; 570-32961, F-GSQO, 2006-06; 573-34972, F-GSQP, 2006-05; 579-35677, F-GSQR, 2006-08; 608-32962, F-GSQS, 2007-01; 616-32846, F-GSQT, 2007-02; 624-32847, F-GSQU, 2007-04; 636-32854, F-GSQV, 2007-05; 645-32963, F-GSQX, 2007-07; 647-35678, F-GSQY, 2007-07; 715-32964, F-GZNB, 2008-04; 795-32968, F-GZNG, 2009-06; 671-35297, F-GZNA, 2007-07; 723-35542, F-GZNC "GILLE DEHOVE" 2008-05; 777-35543, F-GZND, 2009-04 - - "SEE PHOTO - - "AFA-777-2009-04;" 790-37432, F-GZNE, 2009-06; 792-37433, F-GZNF, 2009-06; 905-35544, F-GZNH, 2010-12; 40064, F-GZNQ, 2015-05), (ILF) 6 YR LSD. 8F, 67C, 235Y.

2 +23 ORDERS 787-9 (1ST DELIVERY AERCAP (DEA) LSD 2016-11, 2ND 2017-04).

0 DC-10-30F (CF6-50C2), (GMN) LSD 1998-03. RTND.

1 A300B4F, (HVL) WET-LSD 1999-11 FOR (AFA) CARGO.

1 A300C4F-605R (755), (ISF) WET-LSD 2002-11.

0 A300-600F, (CBD) WET-LSD 2000-09, 1 RTND.

0 A310-222 (CF6-80A3) (316; 326; 335; 355; 369; 454) 6 ST (FED) 2002-04.

0 A310-300, ALL 4 RETIRED 2002-01. 504 RTND (ILF) 2002-08.

42 ORDERS A318/A319/A320/A321:

17 +2/7 ORDERS A318-111 (CFM56-5B) (2035, /03 F-GUGA; 2109, F-GUGF, 2004-04; 2317, F-GUGG 2004-10; 2344, F-GUGH, 2004-12; 2350, F-GUGI, 2004-12; 2582, F-GUGJ, 2005-10; 2601, F-GUGK, 2005-11; 2686, F-GUGL, 2006-02; 2750, F-GUGM, 2006-04; 2918, F-GUGN, 2006-10; 2951, F-GUGO, 2006-11; 2967, F-GUGP, 2006-12; 2972, F-GUGQ, 2007-01), 107 PAX, 2 CLASS.

17 OPTION A319/A321 (CFM56):

18 A319-111 (CFM56-5B5/P) (938, /99 F-GRHA; 985, 998, 1000, 1020, 1025; 2938, F-GRXL, 2006-11), (ILF) 6 YR LSD (F-GHRA - F) (1151, F-GRHH; 1176, 1190, 1201), (1169, F-GRHI, (ILF) LSD 2000-02. (1616; 1622; 1640; 1645). 1733. (1938, F-GRXF). 142Y.

1 A319-112 (2961, F-GRXM, 2006-12), 142Y.

5 A319-115LR (CFM56-5B7/P) (2213, F-GRXG, 2004-06; 2228, F-GRXH, 2004-06; 2456, F-GRXJ; 2457, 2005-03; 2716, F-GRXK, 2006-03), (ILF) 6 YR LSD. FOR DEDICATE PROGRAM OPS. 28F, 54C. CORPORATE.

2 A319-115LR (CFM56-5B7/P) (2279, F-GRXI, 2004-09; 3065, F-GRXN, 2007-04), (ILF) 6 YR LSD.

9 A319-113 (CFM56-5A4) (598, /96 F-GPMA), 142Y.

2 ORDERS A319ACJ, EXEC JET.

6 A320-111 (CFM56-5A1) (005, /88 F-GFKA "VILLE DE PARIS;" 007, /88 F-GFKB; 014, /88 F-GFKD "VILLE DE LODRES;" 019, /88 F-GFKE "VILLE DE BONN;" 020, /89 F-GFKF "VILLE DE MADRID;" 021, /89 F-GFKG "VILLE D'AMSTERDAM"), 159Y.

2 ORDERS (2010-11) A320-200, (ILF) 6 YR LSD.

32 A320-211 (CFM56-5A1), 4 EX-(ACI) 1998-11. 204 RTND (GEF) 2004-03. 211 RTND (DEA) 2004-04. 244 RTND (DEA) LST (AZU) 2006-02. 129; SOLD IN USA 2009-09. 285; PAINTED IN SKYTEAM COLORS 2012-07. 285; SOLD TO AVTRADE FOR PARTING OUT 2016-08. 159Y OR 172Y.

1 A320-212 (CFM56-5A3) (235, /91 F-GKXB, 2001-02) (131, /90 F-GLGN, 2001-04, 132 RTND (GAX) 2001-05, LST (ATW). 235; RTND (DEA) LST DONBASSAERO (UDC) 2011-01. 159Y.

0 A320 (V2500) (414, 430), EX-(KHZ), (TSD) WET-LSD TIL 2000-11.

10 A320-214 (CFM56-5B4/P) (1502, /01 F-GKXC; 1873, /02 F-GKXD; 1885, /02 F-GKXF; 1879, /02 F-GKXE; 1894, /02 F-GKXG; 3008, F-GKXN, 2007-01; 3420, F-GKXO, 2008-03; 3470, F-GKXP, 2008-04; 4137, F-GKXZ, 2009-12; 4139, F-HEPA, 2009-12), (GEF) LSD. 1502 LST (CSA) 2005-04. 159Y.

1 A320-214 (CFM56-5B4/P) (1900, /02 F-GKXJ), (DEA) LSD 2003-02. 159Y.

7 A320-214 (CFM56-5B4/P) (1924, /02 F-GKXH; 1949, /03 F-GKXI; 2140, /03 F-GKXK; 2213 /04 F-GKXL; 4295, F-HEPD, 2010-05; 4298, F-HEPE, 2010-05; 4335, F-HBNA, 2010-06), (ILF) LSD. 159Y.

3 A320-214 (CFM56-5B4/P) (2705, F-GKXL, 2006-03; 2721, F-GKXM, 2006-03; 3777, F-GKXQ, 2009-01). 159Y.

1 A320-214 (CFM56-5B4/P) (3795, F-GKXR), AERDRAGON LSD 2009-02. 159Y.

4 A320-214 (CFM56-5B4/P) (3825, F-GKXS, 2009-03; 3859, F-GKXT, 2009-05; 4251, F-HEPB, 2010-03; 4267, F-HEPC, 2010-04), AERVENTURE LSD. 159Y.

1 A320-214 (CFM56-5B4/P) (4063, F-GKXU), (CGP) LSD 2009-10. 159Y.

1 A320-214 (CFM56-5B4/P) (4402, F-HBNB, 2010-09; 5802*, F-HEPG SEE PHOTO - - "AFA-A320-214 - 80 YRS - 2013-10"), *WITH SHARKLETS. 159Y.

5 A321-111 (CFM56-5B1) (498, /94 F-GMZA; 509, /94 F-GMZB; 521, /95 F-GMZC; 529, /95 F-GMZD; 544, /95 F-GMZE), 206Y.

1 ORDER (2010-06) A321-200, (ILF) 6 YR LSD.

2 A321-211 (CFM56-5B3/P) (761, /98 F-GTAF; 777, /98 F-GTAD; 796, /97 F-GTAE), (674; 675; 684; 761; RTND, LST (ACN) 2002-08), (GAX) 5 YR LSD. 188Y.

0 A321-211 (CFM56-5B3/P) (956, /99 F-GYAG), (GEH) LSD 1999-03. 956 RTND 2004-03. 188Y.

6 A321-211 (CFM56-5B3/P) (1133, /99 F-GTAH; 1299, /00 F-GTAI; 1476, /01 F-GTAJ; 1658, /01 F-GTAK; 1691, /02 F-GTAL; 1859, /02 F-GTAM). 188Y.

9 A321-211 (CFM56-5B3/P) (3051, F-GTAN, 2007-03; 3098, F-GTAO, 2007-04; 3372, F-GTSP, 2008-01; 3399, F-FTAQ, 2008-02; 3401, F-GTAR, 2008-02; 3419, F-GTAS, 2008-03; 3441, F-GTAT, 2008-03; 3884, F-GTAV, 2009-05), (ILF) 6 YR LSD. 188Y.

3 A321-211 (CFM56-5B3/P) (3814, C-GTAU, 2009-02; 3930, F-GTAX, 2009-06; 4251, F-HEPB, 2010-03), 188Y.

15 A330-203 (CF6-80E1A3) (422, /01 F-GZCA; 443, /01 F-GZCB; 448, /02 F-GZCC; 458, /02 F-GZCD; 465, /02 F-GZCE; 481*, /02 F-GZCF; 498, /02 F-GZCG - - SEE INCDT IN ATTACHED - - "AFA-2013-09 - A330-203;" 500, /02 F-GZCH; 502, /02 F-GZCI; 503, /02 F-GZCJ; 516, /03 F-GZCK - - SEE INCDT IN 2009-12; 519, /03 F-GZCL; 567, /04 F-GZCM; 584, /04 F-GZCN; 657, /05 F-GZCO; 660, /05 F-GZCP - - DESTROYED IN CRASH W/O SEE ACCDT IN JUNE 2009), *READ 481 INCDT IN 2005-07. 40C, 179Y.

10 ORDERS A330-301 (CF6-80E1A2) (448; 465).

3 A340-211 (CFM56-5C2) (031, 038, 043), 031 TO (TAH), FOR SALE.

13 A340-313X (CFM56-5C4) (168, /97 F-GNIF; 174, /97 F-GNIG; 186, /97 F-GLZJ; 207, /97 F-GLZK; 210, /98 F-GLZL; 237, /98 F-GLZZM; 245, /98 F-GLZN; 246, /98 F-GLZO; 260, /99 F-GLZP; 289, /99 F-GLZQ; 307, /99 F-GLZR; 310, /99 F-GLZS; 319, /00 F-GLZT; 373, /OO F-GNIH; 377, /OO F-GLZU; 399, /01 F-GNII; 422), (ILF) 4 YR LSD. 289 W/O 2005-08. 174; RTND; LST (FIN) 2011-01. 210 LST (MAD) 2012-04. TO BE RETIRED EARLY BECAUSE OF POOR FUEL ECONOMY. 237; STORED AT LOURDES 2016-08. 36C, 236Y.

16 +6/3 ORDERS A340-313E HGW, (ILF) LSD, TO BE RETURNED. 6F, 42C, 204Y.

46 ORDERS (2018-02) A350-900XWB (TRENT XWB):

10 A380-861 (ENGINE ALLIANCE GP7270, 76,500 LBS THRUST) (33, /09 F-HPJA - - SEE PHOTO - - "AFA-A380-2009-07" 2009-10; 040, F-HPJB, 2010-02; 043, F-HPJC, 2010-04; 049, F-HPJD, 2010-08; 104; F-HPJI, "80 YEARS" 2013-10; 117, /14 F-HPJJ 2014-06), "THE GERMAN LEASING COMPANY" LSD, TOTAL 538 PAX: UPPER DECK: 80C; 106Y; LOWER DECK: 9F; 343Y.

0 CONCORDE, (203, /75 DESTROYED - - SEE ACCDT REPORT IN JULY 2000), ALL 5 RETIRED 2003-05.

1 EMBRAER E170-100LR (036, F-HBXP; 0307, F-HBXH), FOR HOP! OPS, 0307 RETURNED FROM AIR COTE D'IVOIRE LEASE. 036 RETURNED TO CELESTIAL AVIATION TRADING (GECAS) AFTER LEASE 2016-08.

? EMBRAER E190, FOR HOP! OPS (SEE ATTACHED - - "AFA-E190 HOP OPS - 2013-11").

5 F 100.

Management:
(definitions)

Click below for photos:
AFA-1-Franck Terner - 2016-11.jpg
AFA-1ex-ALEXANDRE DE JUNIAC - 2011-11
AFA-1exy-JEAN CYRIL SPINETTA
AFA-1exy-JEAN CYRIL SPINETTA - 2013-02
AFA-1exy-JEAN CYRIL SPINETTA-2004-07-A
AFA-1exy-K-2004-07-B
AFA-1exy-K-2004-07-C
AFA-1exy-K-2004-07-D
AFA-1exy-K-2004-07-E
AFA-1exy-L-JEAN CYRIL SPINETTA-2007-12
AFA-1exy-LEO VAN WIJK
AFA-2-Frederic Gagey - 2016-10.jpg
AFA-2ex KLM MANAGEMENT - 2015-02
AFA-6-JOSE MARIE LOUIS - 2013-08

JEAN-MARC JANAILLAC, CHAIRMAN & CHIEF EXECUTIVE OFFICER (CEO) (AFA) - (KLM) GROUP & CHAIRMAN AIR FRANCE (AFA) (2016-11).

ALEXANDRE DE JUNIAC, FORMER CHAIRMAN & (CEO) (AFA)-(KLM) GROUP, EX-(THL) (2011-11) (2013-07) RETIRED (2016-07).
Alexandre retired from his position at Air France (AFA) in July 2016 to take over his new assignment as Director General & (CEO) of the INTERNATIONAL AIR TRANSPORT ASSOCIATION (IATA) (ITA) from Tony Tyler.

PETER HARTMAN, DEPUTY (CEO), VICE CHAIRMAN (AFA) - (KLM) GROUP (2013-07).

FRANCK TERNER, (CEO) AIR FRANCE (2016-11).
Franck joined (AFA) in 1988 as a Concorde SST Production Engineer. He then worked his way through a series of Maintenance roles, becoming Head of Aircraft Maintenance at (AFA) subsidiary, Regional in 2002. He later became Executive VP Operations & Support at Regional and, in 2008, he became (COO) of Regional. In 2010, Terner was appointed Air France Industries (AFI) VP and, since July 1, 2013, he has been (AFA) - (KLM) Executive VP Engineering & Maintenance. Frank was later President (AFI) - (KLM) Engineering & Maintenance (E&M) from 2013-08.

CAMIEL EURLING, (CEO) & PRESIDENT (KLM) (2013-07).

LIONEL GUERIN, CHAIRMAN & (CEO) HOP! EX-(TVF)/AIRLINAIR (CEO) (2013-01) LEAVES AIR FRANCE (2017-01).

MATTIJS TEN BRINK, CHAIRMAN & MANAGING DIRECTOR, TRANSAVIA AIRLINES (TAV) (2013-08).
A veteran of the (AFA) - (KLM) group, Mattijs most recently served as Transavia (TAV)'s Senior VP Cargo Sales & Distribution. He replaced Bram Gräber, who has become AirFrance (AFA)-(KLM)'s Executive VP Passenger Strategy.

MS NATHALIE STUBLER, (CEO) TRANSAVIA FRANCE (TVF) (2014-02).

ANTOINE PUSSEIAU, (CEO) TRANSAVIA FRANCE (TVF) (2013-01) REPLACED BY NATHALIE STUBLER (2014-02).
Antoine, who has been AirFrance General Manager Europe & North Africa since 2010. He has been with AirFrance (AFA) since 1981. He has held a number of positions, as AirFrance (AFA)’s Boeing (TBC) representative in Seattle, head of technical and a number of overseas country manager’s positions.

VINCENT D'ANDREA, (CEO) ENGINE PART REPAIR SUBSIDIARY (CRMA) AIRFRANCE INDUSTRIES (AFI)/(KLM) (E&M) (2012-12).

JEAN-YVES GROSSE, (CEO) REGIONAL.

MARC LAMIDEY, (CEO) BRIT AIR.

ALAIN-HERVE BERNARD, AIR FRANCE (AFA) CHIEF OPERATING OFFICER (COO) & ACCOUNTABLE MANAGER (2017-01).
Alain-Herve who was (CEO) of the Medium Haul Business unit replaces Eric Schramm who has been appointed to another position for his decisive contribution to the safety of (AFA) flights.

FREDERIC GAGEY AIR FRANCE (AFA) - (KLM) GROUP CHIEF FINANCIAL OFFICER (CFO) (2016-11).
Frederic has been (AFA) (CEO) since 2013.

MARC VERSPYCK, EXECUTIVE VP FINANCE.
Marc is responsible for improving competitiveness.

PIERRE-FRANCOIS RIOLACCI, AIR FRANCE (AFA) - (KLM) GROUP CHIEF FINANCIAL OFFICER (CFO), RESIGNED (2016-11).

MS ANNE BRACHET, EXECUTIVE VP ENGINEERING & MAINTENANCE (AFA) - (KLM) Group (2017-01).
Anne was previously President AirFrance Industries (AFI) from 2013-08.

ALAIN MALKA, EXECUTIVE VP HOP! (2017-01)
Alain was Executive VP Cargo and now replaces Lionel Guerin.

PHILIPPE CALAVIA, EXECUTIVE VP, HEAD OF INFORMATION TECHNOLOGY (IT) + DEPUTY (CEO) (AFA) (2010-01).

GILBERT ROVETTO, ADVISOR TO (CEO) (2010-01).

JEAN-FRANCOIS COLIN, ADVISOR TO (CEO) (2010-01).

ERIC SCHRAMM, EXECUTIVE VP OPERATIONS (2015-12) to (2017-01).
Eric oversees Flight Operations, Ground Operations, and the Maintenance division. Eric was later replaced by Alain-Herve Bernard, but remains in charge of the Medium-haul Business Unit until the implementation of the change of organization and creation of a blueprint for a new organizational structure within a month. He will still be responsible for Flight Operations, In-flight Service and the Cargo Division.

GILLES LAURENT, EXECUTIVE VP FLIGHT OPERATIONS (2017-01).
Gilles succeeds Eric Schramm.

JEROME NANTY, EXECUTIVE VP CORPORATE SECRETARY & TRANSFORMATION (2017-01).
Jerome handles legal, public affairs, sustainable development and transformation.

MS ELIZABETH HERELIER, EXECUTIVE VP CARGO (2017-01).
Elizabeth replaces Alain Malka. She was earlier Ground Support Division Manager from 1999-07.

PIERRE-OLIVER BANDET, EXECUTIVE VP FLEET & SCHEDULING (2017-01).
Within a month he has to produce a plan re-casting the scheduling and management of the Air France group fleet. He will also be in charge of preparing implementation of the "Boost" project, which aims to create a long-haul, lower cost carrier. The person ultimately in charge of "Boost" will be appointed soon.

ERIC CARON, EXECUTIVE VP IN-FLIGHT SERVICES (2017-01).
Eric replaces Anne Rigail.

BRAM GRABER, EXECUTIVE VP PASSENGER STRATEGY, EX-(TAV) MANAGING DIRECTOR (2013-08).

MS ADELINE CHALLON-KEMOUN, EXECUTIVE VP MARKETING, DIGITAL & COMMUNICATION (2015-07).

PASCAL DE IZAGUIRRE, EXECUTIVE VP GROUND OPERATIONS.

MS ANNE RIGAIL, EXECUTIVE VP CUSTOMER (2017-01).
Anne was formerly Executive VP In-flight Services.

PATRICK ALEXANDRE, EXECUTIVE VP COMMERCIAL PASSENGER BUSINESS.

CHRISTIAN BOIREAU, EXECUTIVE VP COMMERCIAL FRANCE.

AUGUSTE GAYTE, EXECUTIVE VP GENERAL CO-ORDINATION.

JACQUES PICHOT, SECRETARY GENERAL.

PASCAL DE IZAGUIRRE, EXECUTIVE VP GROUND OPERATIONS.

GILLES GATEAU, EXECUTIVE VP HUMAN RESOURCES (HR) & LABOR RELATIONS.

EDOUARD ODIER, CHIEF INFORMATION OFFICER (CIO).

J BAPTISTE RIGAULDIAS, DEPUTY INSPECTOR GENERAL FLIGHT SAFETY (HDQDTAF) (jbrigaudias@airfrance.fr).

LAURENT BARTHELEMY, SENIOR VP OPERATIONS & TECHNICAL DEVELOPMENT.

JEAN-PAUL HAMON, SENIOR VP INFORMATION & TELECOMMUNICATIONS.

JOSE-MARIE LOUIS, SENIOR VP ENGINE OVERHAUL, AIRFRANCE INDUSTRIES (AFI) (2012-12).

MS NINA JONSSON, SENIOR VP FLEET MANAGEMENT, EX-(UAL) (AMW)/(USA) (2015-07).
Nina previously held positions of United Airlines (UAL) Director Fleet Planning and US Airways (AMW)/(USA) Director Fleet Management.

BRUNO DELILLE, GROUP VP NEW AIRCRAFT & FLEET PLANNING (2010-08), LEAVES AIR FRANCE GROUP AS EXECUTIVE VP LONG-HAUL BUSINESS (2017-01).
Bruno was replaced by Nina Jonsson. Bruno moved to another position in the group (2015-07). He has now left the Air France Group.

PATRICK ROUX, SENIOR VP ALLIANCES (AFA) - (KLM) (2015-12).
Patrick was previously Senior VP Asia Pacific.

ANTOINE PUSSEIAU, SENIOR VP ASIA PACIFIC (2016-02).
Antoine, hasd been AirFrance General Manager Europe & North Africa since 2010. He has been with AirFrance (AFA) since 1981. He has held a number of positions, as AirFrance (AFA)’s Boeing (TBC) representative in Seattle, head of technical and a number of overseas country manager’s positions.

PIERRE DESCAZEAUX, SENIOR VP AFRICA & MIDDLE EAST.

ALAIN MARKA, SENIOR VP CARIBBEAN & INDIAN OCEAN.

ROBERT ANTON, SENIOR VP COMPONENT SERVICES AIR FRANCE INDUSTRIES.

JEAN-CHARLES TREHAN, SENIOR VP COMMUNICATIONS.

CHRISTIAN HERZONG, SENIOR VP MARKETING.

ROBERT IVERSEN, VP/(COO) AMERICAS (EX-PRESIDENT (LAK) (1997-03).

STEPHANE ORMAND, VP & GENERAL MANAGER AIR FRANCE (AFA) - (KLM) USA (2017-03).

PHILIPPE WALLET, VP ENGINEERING & MAINTENANCE, (CDGMEAF) (phwallet@airfrance.fr).

PIERRE REVILLE, VP ENGINEERING MARKETING & SALES (1999-07).

JOSE-MARIE LOUIS, VP ENGINE SERVICES AIRFRANCE INDUSTRIES.

JEAN JACQUES MICHEL, VP ENGINE OVERHAUL.

KAREN BERG, VP SALES, USA & CANADA (2008-11).

JONATHAN SOESMAN, VP SALES SOUTHERN EUROPE (2008-11).

HERVE ALEXANDRE, VP TECHNICAL PROCUREMENT AIR FRANCE INDUSTRIES (AFI).

ROBERT PRUIM, VP PROCUREMENT (AFI) (KLM) (E&M) (2016-10).

RODOLPHE PARISOT, VP DIGITAL & INNOVATION (AFI) (KLM) (E&M) (2016-10).

JEAN GIRAUD, DEPUTY VP QUALITY ASSURANCE (QA).

BERNARD ALEXANDRE, FLIGHT OPERATIONS DIRECTOR (HDQNTAF) (bealexandre@airfrance.fr).

FRANCOIS COUQUE, DIRECTOR (AFM)/(AFI) LOGISTICS.

PHILIPPE MHUN, DIRECTOR LONG HAUL FLEET ENGINEERING & MAINTENANCE (phmhun@airfrance.fr) (1999-07).

JAMES KORNBERG, DIRECTOR ENGINEERING & MAINTENANCE INNOVATION (2015-09).

FABRICE DEFRANCE, DIRECTOR MEDIUM RANGE FLEETS ENGINEERING & MAINTENANCE.

FLORENCE PARLY, DIRECTOR STRATEGY & INVESTMENTS.

VINCENT METZ, DIRECTOR STRATEGY (AFI) (KLM) (E&M) (2016-10).

NICOLAS HENIN, COMMERCIAL DIRECTOR, UK & IRELAND (2013-09).

GIJS VAN POPTA, HEAD OF SALES (2013-09).

RON DE BOS, HEAD OF SALES, NORTH AMERICA (2012-04).

WARNER ROOTLIEP, GENERAL MANAGER UK & IRELAND.

CAPTAIN BERTRAND DE COURVILLE, CORPORATE SAFETY MANAGER (ALSO CO-CHAIRMAN, EUROPEAN COMMERCIAL AVIATION SAFETY TEAM (ECAST)).
MAX VALLEJO, NETWORK PLANNING MANAGER NORTH AMERICA.

ELIZABETH HERELIER, GROUND SUPPORT DIVISION MANAGER (1999-07).

CLAIRE CAMIN, 747/767 ENGINEERING & MAINTENANCE CONTROL MANAGER
(clcamin@airfrance.fr).

RAYMOND TOPIN, 777 MAINTENANCE & ENGINEERING MANAGER (1999-07).

MICHEL PELABERE, MANAGER 737 MAINTENANCE & ENGINEERING.

MICHEL BENEZETH, 747/767 ENGINEERING MANAGER.

JACKY BLONDEAU, 737 ENGINEERING MANAGER (2002-11).

PHILIPPE CAREJE, ENGINEERING COORDINATION/METHODS MANAGER,
(phcareje@airfrance.fr) (1999-07).

JOSEPH SAHSIK, ENGINEERING MANAGER (1997-04).

FRANCOIS BETHENCOURT, AIRCRAFT EVALUATION MANAGER.

FRANCK BECKER, AVIONICS MANAGER.

 
Top of Page

 

Since you are not logged in, we can show you only live Airtran Airways data. This page will demonstrate the depth of data we have for every airline. Close and View Airtran Airways ›