China Southern Seeks Cooperation With Air France

According to the website of the French journal Les Echos, Air France and China Southern Airlines intend to set up a joint venture company to operate air routes from Paris to Guangzhou and it expected that the new company will be formally launched in October 2010.

However an official of China Southern told local Chinese media that the details of the cooperation and the date the JV will be launched are still under negotiation. The official also revealed that the two sides will not set up an independent legal entity but will use the same model as the cooperation between Air France-KLM and Delta Airlines on north Atlantic routes, i.e. setting up a joint venture to share both costs and revenue.

This cooperative mode is much more tightly structured than a codeshare. Two sides will adopt the same prices on the routes, and allocate income according to the number of seats and types of aircrafts operated by each airline.

The official from China Southern also said that the airline has been operating Paris to Guangzhou route for several years but the income of this route is not very satisfactory because of the high cost and fierce competition.

Pierre-Henri Gourgeon, the CEO of Air France, stated that if everything goes well, the cooperation between Air France and China Southern may expand to transporting cargo. China Southern and Air France are both members of SkyTeam and have already launched codeshare on many of their routes to improve passenger load factors

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