Air France-KLM unveiled on Friday its plans with Virgin Atlantic and Delta Air Lines to combine two overlapping transatlantic joint-ventures, supported by equity deals worth $1 billion, as airlines brace for more competition. Laura Frykberg reports.
Air France-KLM is taking off ... High demand for travel sending revenue soaring 1.5 percent in the second quarter, after falling 0.5 percent in the first. The figures follow an announcement by the Franco-Dutch carrier.. Of a joint venture with Delta Air Lines and Virgin Atlantic.. Plus deals for Delta and China Eastern to enter its share capital. (SOUNDBITE) (English) AIR-FRANCE KLM CEO JEAN-MARC JANAILLAC SAYING: "We are going to build on the largest and most profitable market. And with China Eastern we gain the possibility of securing our long-term growth on a very rapidly developing market." The move is designed to strengthen carriers on the lucrative North Atlantic. with a combined 27 percent of capacity, ahead of rivals. And that, say some analysts could create some headwind. Despite a recent lift in sentiment for the sector as a whole. (SOUNDBITE) (English) CHIEF ECONOMIC ADVISER, CEBR, VICKY PRYCE, SAYING: "Passenger traffic is going up, despite quite a lot of competition from low cost airlines, those big carriers have also managed to retain their position in the markets." Air France-KLM will also buy 31 percent of Virgin Atlantic, for around 220 million pounds. The new alliance still grounded though...It's waiting on regulatory approval.