Air France-KLM starts process for major medium-haul jet purchase

Business

Air France-KLM (AIRF.PA) has launched a tender to “renew and extend” the medium-haul fleets of Dutch unit KLM and the French and Dutch arms of low-cost subsidiary Transavia, a spokesperson for the Franco-Dutch airlines group said on Monday.

The company confirmed the tender after Chief Executive Officer Ben Smith was quoted as saying Air France-KLM had approached Airbus (AIR.PA) and Boeing (BA.N) about 160 jets.

“We’ve done a little bit in this area, it’s been on the agenda since 2004, but it’s never been put in place as it is now. I am very pleased to be able to put together this order, the largest in the group’s history,” he told the daily Het Financieele Dagblad in an interview.

A competition for medium-haul jets would typically pit the Airbus A321neo family against the Boeing 737 MAX, although Air France has also ordered the smaller Canadian-designed A220 jet for its French operation.

Smith said in the interview that the Air France-KLM combination had slipped behind competitors Lufthansa (LHAG.DE) of Germany and Anglo-Spanish IAG (ICAG.L), which owns British Airways, Iberia and Aer Lingus.

Air France-KLM should strengthen cooperation to be able to respond more quickly to market developments, he said, without specifying which business segments.

“In 2004, Air France-KLM was the largest group in Europe, now we are number three. They have worked more effectively. Obviously we can do that too, but we need to move forward a little faster.”