Air France KLM is looking to create a low cost carrier

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Source: La Tribune

PARIS, Nov 17 - French-Dutch 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 like 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 holiday month of August.

If approved by the Air France board of directors on Nov. 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.

"This latest initiative would fit in very well with the growth strategy of transavia.com, which has for some time been planning to operate from additional bases outside the Netherlands," the airline said in a statement.