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Signing of a joing venture agreement

Strengthened cooperation between Ait France and China Southern

Pierre-Henri Gourgeon, CEO of the AIR FRANCE KLM Group and Tan Wan Geng, President and Chief Executive Officer of China Southern, today signed a joint venture agreement at Paris-Charles de Gaulle which will come into effect on 1 November 2010 and which is based on sharing revenues on the Paris-Guangzhou route.

As a reminder, all Air France and China Southern flights between Paris and Guangzhou are operated on a code-share basis. Customers of both airlines therefore benefit from a wider choice of departure times and more frequencies. Several other connecting destinations beyond these two cities will gradually be introduced on a code-share basis within the framework of this joint venture.

“This joint venture agreement strengthens the links which already exist between Air France and China Southern, who are also partners within the SkyTeam alliance. It consolidates our position in one of the most buoyant regions of the world and enables us to offer our customers improved service whilst maintaining costs. In this way, the Air France-KLM group is confirming its rank as European airline leader to China”, declared Pierre-Henri Gourgeon.

Air France and China Southern will have joint governance of the joint venture. A management committee will be implemented, with five working groups in charge of implementing the joint venture agreements in the fields of network management, revenue management, sales, products and finance.

“By joining forces, China Southern – China’s leading airline and Air France – a European major – are entering a new phase of cooperation. The joint venture will enable both airlines to improve their competitiveness on a very buoyant market”, added Tan Wan Geng.

Since 2004, Air France and China Southern have been operating code-share flights between Paris and Guangzhou thanks to an agreement signed in 2003. On this route, China Southern today uses its CZ code on Air France’s three weekly flights and Air France uses its code on China Southern’s four weekly flights, thus offering 7 code-share flights by Boeing 777-200 and Airbus A340.

China Southern has also been operating a daily flight by Boeing 777-200, between Guangzhou and Amsterdam since 2001 on which KLM codeshares. KLM also operates a joint-venture with China Southern Airlines between Amsterdam and Beijing since June 2006.

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