Air France-KLM and Etihad Airways are reportedly working on a JV, to be launched in autumn 2012, according to Le Figaro). The partnership will reportedly extend beyond the commercial cooperation previously announced. As previously reported in recent months, the two companies have been in talks about some form of commercial partnership that would fall short of a capital investment. The latest reports indicate Air France-KLM and Etihad would aim to create a link between Europe and the Middle East in a JV similar to the trans-Atlantic alliance between Air France and Delta Air Lines. The JV may later include Air Berlin, 39% owned by Etihad, and Alitalia, in which Air France-KLM owns 25%, and is part of efforts to better compete with Emirates and Lufthansa.
Air France-KLM and Etihad Airways working on JV: report
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Air France-KLM's 2016 operating margin was its highest since before the global financial crisis, but remained below its pre crisis peaks and well below the rest of the world airline industry in what was almost certainly a new record year for global margins. Within the group, KLM's margin improved and was again higher than that of Air France, whose margin fell.
The planned new lower cost airline to be based at Paris CDG as a subsidiary of Air France, announced in outline in 2016 under the project name 'Boost', will now include medium haul in addition to long haul routes. This will be vital to setting it back on a path to sustainable profitability – if agreement can be reached with pilot unions to launch it. Even then, its scope and low cost ambitions will be limited.
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