Air France-KLM expects to make a decision on a large jet order

Air France-KLM is to embark on a purchase of at least 80 medium-haul jets for its Dutch network and Transavia budget operations in the coming months, in what would be the company’s largest fleet transaction ever, according to its CEO.KLM and Transavia’s French and Dutch businesses each issued a tender earlier this year to renew and expand their medium-haul Boeing (NYSE:BA) 737 fleets.

Ben Smith, the company’s CEO, said the agreement may include a firm purchase of 80 planes with options for another 60 to 80. Analysts have argued that after a lengthy relationship with KLM, the competition is Boeing’s to lose, but Smith highlighted that the group was in talks with both Boeing and European Rival Airbus. He added it was in talks with engine manufacturers CFM and Pratt & Whitney at the same time.

Smith was speaking at a ceremony to commemorate the arrival of the first Airbus A220 regional plane, which is part of a multi-stage effort at the company to streamline fleets and lower unit costs. Separate contests will be held in 2023 to replace the A320/A321 medium-haul jets and the A330 long-haul jets on the Air France network, according to Smith. If Airbus decides to offer a longer version of the Canadian-designed A220 as a substitute for the A320, he said, Air France would be interested.

From Oct. 31, the first of 60 Airbus A220 planes with 148 seats will enter Air France-French KLM’s network, with flights to Berlin and Madrid. According to Air France’s Chief Executive Anne Rigail,

corporate traffic on internal routes is beginning to recover, while premium travel remains considerably below pre-crisis levels. “We are seeing some signs in particular on domestic routes, with some conferences taking place especially in the south of France, but we are still very far from 2019 levels at this stage,” Rigail told reporters when asked about business traffic.