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Bloomberg
Air France-KLM has begun negotiations with Boeing Co and Airbus SE on what could be the group’s biggest-ever aircraft order as it seeks to expand low-cost operations and renew part of its main Dutch fleet.
The 160 single-aisle planes would be destined for the Transavia discount division and European operations at KLM, a spokesman said. The brands currently operate only Boeing jets on short- and mid-range routes.
The contest will pit Boeing’s resurgent 737 Max against Airbus’s A320neo-series narrow-bodies. The fleet at Transavia, which has French and Dutch divisions, comprises mostly 737-800s, and the addition of aircraft from another manufacturer would go against the strategy of budget rivals like EasyJet Plc, which stick to a single type to keep down costs. KLM also operates 737s and has been standardising around Boeing models for long-haul flights. Boeing and Airbus didn’t immediately respond to requests for comment.
Air France-KLM Chief Executive Officer Ben Smith has made the expansion of low-cost operations a key element of plans to rebound from the coronavirus pandemic. He aims to as much as triple the number of Transavia jets based in France after the group lost market share there to low-cost competitors.
Boeing has had a string of sales wins with the Max, which was grounded for 18 months after fatal crashes in 2018 and 2019. United Airlines Holdings last month agreed to buy 200 of the planes, while handing Airbus an order for 70 of its larger A321neos. Southwest Airlines Co, which has an all-737 fleet, topped up its Max backlog by 100 planes in March, after considering the Airbus A220.
Any order at Air France-KLM would come after the company last year received loans and guarantees worth 10.4 billion euros ($12 billion) from France and the Netherlands, followed by a further 4 billion euros in debt conversion and fresh capital backed by Paris in April.
Air France is expecting deliveries in September from an order for 60 Airbus A220s to be used on its own short-haul routes, though the model would be too small for the KLM and Transavia requirements.