China Southern, Air France enhance cooperation

China Southern Airlines enhanced its cooperation with Air France when it signed a memorandum on January 30th to sell 20 percent of its Nanlian Air Catering Co. share to Servair. Nanlian Air Catering Co., founded in 1989, has a registered capital of RMB120 million, the equivalent of USD16.7 million. The Chinese in-flight catering company was jointly owned by China Southern Airlines and Hong Kong Ruilian Investment with an arrangement of 75 and 25 percent shares respectively. Servair, a subsidiary of Air France and the French leading in-flight catering company, will invest a 20 percent share amounting to EUR7.3 million, the equivalent of USD10.8 million, to Nanlian Air Catering Co. Furthermore, Air France will buy another 5-percent share from Hong Kong Ruilian Investment that will increase the company’s stocks in Nanlian to 25 percent. “The deal is just a start in staking cooperation between China Southern and Air France,” said Xu Jiezhong, Vice Managing Director of the China Southern Airlines. Accordingly, the two companies were already code sharing and have begun linking certain ground handling operations, being partners in the airline alliance, SkyTeam. Furthermore, Xu disclosed that China Southern Airlines and Air France have also considered setting up another investment on a cargo joint venture. “The negotiations are underway and progressing very well, but it’s not yet the time to sign a formal agreement right now," Xu added.