Air France KLM Plans to Launch Low-Cost Carrier

Air France KLM is looking to create a low cost carrier to benefit from the growing leisure market, the company said on Friday.

The group is examining the development of its subsidiary transavia.com, which offers a mix of scheduled and charter flights, for low-fare flights from France to popular destinations such as Morocco, Tunisia and Spain.

Spain is the world’s second-biggest tourist destination after France. Government figures in September showed Spain’s crowded no-frills airline market accounted for nearly a third of flights into the country during the peak travel month of August.

The new low-cost carrier’s rivals would include easyJet and Ryanair, which both also fly to Morocco, and Air Berlin.

If approved by the Air France board of directors on November 22, the new company will be 60 percent owned by Air France and 40 percent owned by KLM subsidiary transavia.com. Its launch is set for the spring of 2007.