Air France had been holding talks with China Southern Airlines in an attempt to form a joint venture with China's largest carrier, the China Business News reported Monday, citing an Air France official. 

Mai Liancheng, an official from the public relations department of Air France, told the newspaper that the two carriers were expected to announce the results of the talks at the end of this month.

"Senior officials from both sides will meet in Guangzhou to discuss details (about the joint venture) and we will make further announcements," Mai told the newspaper, declining to say more about the talks.

But Su Liang, company secretary of Hong Kong and Shanghai-listed Southern Airlines, said there were no such talks for a joint venture between the two carriers.

French business newspaper La Tribune cited an anonymous source in China as saying that Air France and Southern Airlines were set to create a joint venture for flights between Paris and Guangzhou, Paris and Beijing.

An Air France spokeswoman told AFP on Wednesday that Southern Airlines had plans to combine some of their operations on routes between France and China.

"The collaboration is not yet in the form of a joint venture. It would be premature to define it as such. Discussions are on-going," the spokeswoman said.

Another French newspaper Le Figaro also reported on the joint-venture talks, with another meeting between the two companies planned for the end of July.

The tie-up would allow Air France to "cement our relationship and our routes (with China Southern Airlines)," an Air France source told Le Figaro.

The La Tribune called the proposed deal a "win-win agreement" as Air France "would benefit from lower operating costs of Southern Airlines while contributing higher revenues per unit."

An Air France-Souther Airlines joint venture would be the most significant alliance between a European and Asian airline, but also the most important long-haul tie-up for Air France with a Skyteam partner.

Air France and Southern Airlines signed a code-share agreement in November 2003, meaning they have already cooperated to share customers on some routes.

(Shenzhen Daily July 12, 2005)