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Air France-KLM sees decision soon on major jet order - Financial Markets Worldwide

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ReutersStock Markets12 minutes ago (Sep 29, 2021 04:21AM ET)

© Reuters. FILE PHOTO: The first Air France Airbus A350 prepares to take off after a ceremony at the aircraft builder’s headquarters in Colomiers near Toulouse, France, September 27, 2019. REUTERS/Regis Duvignau/File Photo

By Tim Hepher

PARIS (Reuters) -Air France-KLM aims to decide in the coming months on an order of at least 80 medium-haul jets for its Dutch network and Transavia budget subsidiaries in what would be its biggest fleet transaction ever, its chief executive said.

The Franco-Dutch airline launched a tender earlier this year to renew and expand the medium-haul Boeing (NYSE:) 737 fleets at KLM and the French and Dutch operations of Transavia.

Chief Executive Ben Smith said the deal could involve a firm purchase of 80 aircraft with options for another 60 to 80.

Analysts have said the competition is Boeing’s to lose after a long association with KLM, but Smith stressed the group was in talks with both the U.S. planemaker and European rival Airbus. He said it was in parallel talks with engine makers CFM and Pratt & Whitney.

Smith was speaking at a ceremony to mark the arrival of the first Airbus A220 regional jet as part of a multi-stage effort to simplify fleets and reduce unit costs at the group.

Next up will be separate competitions around 2023 to replace the A320/A321 medium-haul jets and the A330 long-haul model operating on the Air France network, Smith said.

For the A320 replacement, Air France would be interested in a possible longer version of the Canadian-designed A220, if Airbus decided to launch one, he said.

The first of 60 Airbus A220 jets with 148 seats will enter Air France-KLM’s French network from Oct. 31, starting with flights to cities such as Berlin and Madrid.

Air France is beginning to see some recovery in business travel on domestic routes but premium travel remains far below pre-crisis levels, the unit’s Chief Executive Anne Rigail said.

“We are seeing some signs in particular on domestic routes, with some conferences taking place especially in the south of France, but we are still very far from 2019 levels at this stage,” Rigail told reporters when asked about business traffic.

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