Air France's Low-Cost Unit Mulls German Growth Beyond Munich

  • Transavia starts flights from Bavarian city this month
  • Discount arm opening first bases outside its home markets

Air France-KLM Group’s Transavia discount arm plans to open a second base beyond its home markets of France and the Netherlands in summer 2017 after the first in Munich starts flights this month.

Transavia has shortlisted a number of possible hubs, with more German locations under consideration, and will make its choice based on the availability of operating slots, as well as demand, Chief Commercial Officer Roy Scheerder said in an interview at the ITB travel fair in Berlin.

Munich flights will start with two 189-seat Boeing Co. 737-800 jets, followed by two more in May, serving 19 cities, including six in Italy, four in Spain and three in Portugal and business destinations such as Brussels and Copenhagen.

Scheerder said that while it’s already a base for Deutsche Lufthansa AG and Air Berlin Plc, the Bavarian city is under-served and carriers “won’t be taking market share away from one another.”

Transavia, founded as the charter arm of KLM, is taking its first steps outside its home nations -- where it has six bases -- as Air France-KLM seeks to stem the advance of Ryanair Holdings Plc and EasyJet Plc and compete with the discount arms of Lufthansa and British Airways parent IAG SA.

Transavia is still a relatively minor player on the European low-cost scene, ranking eighth by January passenger numbers, with unions opposing plans for the unit to take over a large number of unprofitable Air France routes.

While Air France-KLM as a whole will lift capacity 1.5 percent this summer, Transavia will added 15 percent more seats, spurred by the German operation, which aims to attract 1 million customers in its first year. It carried 10.8 million passengers in 2015.

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