By Jason Ng
KUALA LUMPUR--Air France-KLM (AF.FR)'s incoming chief executive
Tuesday said the Franco-Dutch airline is seeking a new partner to
give its business in southeast Asia and Australia some extra
thrust, just as growth in China is slowing.
The company is in talks with "several" potential partners to fly
into Australia via southeast Asia, said Alexandre de Juniac,
currently chief executive of the carrier's Air France unit.
The airline wants to tap the region's fast growth, but its hand
has also been forced since Australia's Qantas Airways Ltd. (QAN.AU)
formed an alliance with Dubai-based Emirates in September. Air
France ended its commercial tie-up with Qantas after that happened
and has since teamed up with Etihad Airways, one of Emirates's main
Middle East rivals.
Mr. De Juniac's comments come as Europe's biggest airlines are
reassessing their long-haul alliances, particularly in Asia as a
growing number of emerging-market carriers are fighting hard to
take a bigger share of Europe-Asia traffic.
Air France's new route to Kuala Lumpur follows Malaysia
Airlines' investment in new routes to France, on which it is flying
A380 super jumbos made by Airbus, a unit of European Aeronautic
Space & Defence Co. (EAD.FR). Malaysia Airlines has also joined
the One World alliance, which includes European carriers British
Airways and Finnair Oyj (FIAIS.HE). Air France-KLM is one of the
founder members of the rival SkyTeam alliance.
"We have in mind at least two new routes in Asia... We see a
dynamic flow of businessmen and tourists between Europe and Asia,"
Mr. de Juniac said in an interview, as Air France marked the
launching of its Kuala Lumpur-Paris route.
Air France is also after new sources of growth in Asia as the
economic outlook for China isn't as bright as it once was. The
airline has no plans to expand on the nine destinations it flies to
in China for now, but forward bookings remain "strong," Mr. De
Juniac said.
"When the Chinese economy recovers to a normal growth rate, we
will increase frequency, or open new routes," he added.
Part of Air France-KLM's caution stems from the pressure it is
under at home, with a wide-ranging cost-cutting program underway to
restore its domestic operations to profitability in the face of
high fuel prices and stiff competition from budget airlines amid
Europe's prolonged economic slowdown. Delaying aircraft orders is
part of the plan.
Mr. De Juniac said Air France-KLM will delay delivery of one
A380, having already canceled one unit after initially taking
delivery of eight of the super jumbos. The company will take the
remaining two units this year and 2014, respectively.
Mr. De Juniac is replacing Chief Executive and Chairman
Jean-Cyril Spinetta, who is due to step down from the company's
helm July 1. Mr. de Juniac has led the French unit for a year,
having been brought in to turn the carrier around after four
straight years of losses. Frederic Gagey, Air France's chief
financial officer, is due to succeed Mr. de Juniac as the French
carrier's CEO. Mr. Spinetta plans to step down from the position of
chairman early next year.
Write to Jason Ng at Jason.ng@dowjones.com
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