Air France Said to Start Exclusive Talks on Unit Sale in Weeks

  • French airline won't sell all of Servair catering unit
  • Servair sale comes as Air France-KLM CEO prepares to move on

Air France-KLM Group will enter into talks with an exclusive buyer for its in-flight service unit Servair within the next few weeks, a person familiar with the plan said.

The company won’t sell the entire business, said the person, who declined to be identified because the discussions are private. Servair, the world’s third-largest in-flight caterer, was valued at about 300 million euros ($340 million) by analysts in 2012 when the carrier also looked into selling part of the business. A spokesman for Air France-KLM declined to comment.

Europe’s biggest airline is seeking to cut costs and raise cash as it seeks to compete with airlines such as Emirates in the international travel market and Ryanair Holdings Plc on shorter routes. The company needs to accelerate its turnaround, Chief Executive Officer Alexandre de Juniac said in an interview on Thursday after announcing his resignation earlier in the week.

Airlines are increasingly outsourcing non-core activities, with Delta Air Lines Inc. expanding its deal from caterer Gate Gourmet in 2014 while Deutsche Lufthansa AG buys in support of its ticket and reservations systems. Most of Servair’s revenue is derived from catering, with the rest from cleaning, airport restaurants and duty-free sales. It was founded in 1971 and operates in 40 airports globally, according to its website.

Before it's here, it's on the Bloomberg Terminal.