Air France plans Chinese maintenance sites - union source

Air France plans Chinese maintenance sites - union source
Aug 31 (Reuters) - Air France-KLM plans to extend its growing maintenance business to China to tap a booming Asian aviation market, a union source said on Friday.
http://www.reuters.com/article/2012/08/31/airfrance-china-idUSL6E8JV1JP2...
The French carrier told worker representatives on Thursday it would launch construction at two sites during the first quarter of 2013 with a view to opening for business in 2014, said the source, who attended the meeting.
The French company would own a plant located in Xi'an specialising in mechanical maintenance and half of a plant in Shanghai in a joint venture with a Chinese partner. The latter will provide maintenance for onboard electrical equipment.
"There was a concern over a shift of the workload to China, but Air France gave guarantees on the matter," the source said, adding most unions backed the plan at the meeting.
Air France-KLM, formed from a merger of Dutch and French carriers in 2004, declined to comment.
Its maintenance business had first-half revenue of 1.57 billion euros ($2.0 billion), of which 523 million was with external customers against 495 million in 2011 period.
The maintenance division, the group's third-largest by revenue, was the only one to post a profit in the first half. Its operating profit grew 14 percent to 56 million euros.
Under a three-year plan "Transform 2015", Air France-KLM wants to cut operating costs 2 billion euros to pay down debt.
Air France-KLM has plans to cut 5,000 jobs to turn around its short and medium-haul business, which lost roughly 500 million euros last year.
Its business is caught between low-cost rivals such as easyJet in Europe and Gulf carriers such as Emirates taking chunks of its long-haul premium business. ($1 = 0.8001 euro) (Reporting by Cyril Altmeyer and Dominique Vidalon)