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Air France-KLM to cash in as business travellers turn on BA – 22 Feb 2007

Air France A318 - the airline has increased its services from London City from two to 10Air France-KLM aims to take advantage of disaffection with British Airways among business travellers by launching a raft of routes from London City next month.

BA has been hit by a series of high-profile problems, including threatened strike action and disruption to baggage handling, since last August, culminating in an apology from chief executive Willie Walsh as profits suffered.

Last week the heads of more than 40 major corporations and travel management companies wrote to BA boss Willie Walsh threatening to switch to other airlines if BA withholds deals from global distribution services and passes on booking costs to clients.

The carrier sparked further anger with charges for second cabin bags, introduced “sympathetically” on February 13. FCm Travel Solutions managing director Alan Spence told Travel Weekly he expects BA to drop the charges after a backlash from business passengers.

Air France responded last week by announcing the expansion of services out of London City from two routes to 10 – adding Geneva, Zurich, Madrid, Milan (Linate), Nice, Edinburgh, Dundee and Belfast from March 26.

The routes will be operated by Air France franchise carrier CityJet, based in Dublin, which already flies six times a day between London City and Paris Orly and five times between London City and Dublin.

The services will be chiefly aboard 95-seat Avro RJ85 aircraft, although CityJet also operates an ageing fleet of BAe146s.

Air France senior vice-president for Europe Etienne Rachou said: “We are providing business clientele with access to a network straight from the heart of London, and strengthening our position as leader in this market.”

The carrier forecast “strong” operating profits for the year to March, reporting a 31% year-on-year increase for the first nine months to €1.23 billion. It attributed a near 9% rise in turnover so far this year – three years after the merger with KLM – to strong demand from business travellers.

The SkyTeam airline alliance, which includes Air France-KLM, Delta and Northwest Airlines, is to seek anti-trust immunity in the US which, if successful, could result in the merger of its members. BA sought similar immunity for its tie-up with American Airlines, but dropped the request when ordered to give up slots at Heathrow.

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