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Sun, Nov 19, 2006

Air France May Launch Budget Carrier

Low-Cost Airlines Become More Attractive

A report in Euronews yesterday confirms Air France is considering starting its own low-cost airline to be based in Paris.

The proposed carrier, tentatively dubbed Air France Soleil, would grow as an expansion from KLM-owned Transavia. Transavia offers scheduled and charter service mainly out of the Netherlands.

Soleil would face stiff competition out of the gate from established low-cost rivals easyJet, Ryanair and Air Berlin. That triad has already knocked several upstarts out of the segment.

Ryanair, perhaps the most successful of Europe's budget carriers, boasted 39 million passengers the first three quarters of this year. With those kind of numbers it's easy to see why Air France is eager to get its foot in the door.

Ryanair made a recent bid to purchase Aer Lingus and break into the long-haul segment of the industry. So far, that bid has met with a great deal of resistance from Aer Lingus, the Irish government and opponents within the EU.

Some question Air France's decision to offer a low-cost service domestically since it would compete directly with the country's high-speed train system -- the TVG. That system already allows travelers to get from Paris to Marseilles on the south coast in around three hours. The train network serves 250,000 customers daily in France, Belgium, Germany and the Netherlands.

The Euronews report says the Air France-KLM board meets next week to discuss the proposal.

FMI: www.airfrance.com

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