Air France and China Southern enter cargo joint venture

Air France-KLM and China Southern today announced the signing of a Framework Agreement for the development of a Sino-European Cargo Joint Venture between both companies.

The agreement was signed on June 2nd 2008 in Istanbul on behalf of China Southern by Mr. Liu Shao Yong, Chairman of the Board of China Southern Airlines Co Ltd and Mr. Leo van Wijk, Deputy Chairman of the Air France-KLM Group. Also present at the signing were Mr. Jean-Cyril Spinetta, Chairman of the Air France-KLM Group, Mr. Peter Hartman, President and CEO of KLM and a number of senior executives of both companies.

This ambitious project, which is still subject to required approvals and consultations, should be completed by year end.

Mr. Liu Shao Yong of China Southern commented: "The signing of the Framework Agreement marks an important milestone for China Southern in its efforts to strengthen its core competitiveness. This Framework Agreement is an important step towards a Sino-European Cargo Joint Venture that will clearly provide China Southern with a viable option to optimize the use of its network. This project represents an alignment of interests and objectives between the two companies and we are confident it will succeed."

Mr. Leo van Wijk of Air France-KLM, commented: “Air France-KLM is very pleased to enter into partnership with China Southern on the development of this future Sino-European Cargo Joint Venture. This project clearly combines the strengths of both companies in the cargo industry and represents the basis for delivering long-term value not only to Air France-KLM and China Southern but to our customers as well."

The business combination agreement concluded in September 2003 between Air France and KLM gave rise to Europe's number one air transport group in May 2004, based on a holding company and two airlines with their own brands and identity and three core businesses: passengers, cargo and MRO.

The combination of Air France and KLM creates a unique global network, based on the hubs at Paris-Charles de Gaulle and Amsterdam-Schiphol. The new Group represents 253 destinations worldwide and a fleet of 607 aircraft. By combining their strengths in the cargo sector, Air France Cargo and KLM Cargo have become a worldwide market leader (excluding integrators).

China Southern Airlines is the largest carrier in The People’s Republic of China in terms of fleet, routes and annual passenger traffic. China Southern operates more than 600 domestic and international routes with destinations to 152 cities throughout China and the world, forming an extensive network, with Guangzhou and Beijing as its hubs. For additional information, visit the China Southern web site: Cs-air.com.

Air France, KLM and China Southern are both members of the SkyTeam global alliance.