Air France-KLM plans to increase capacity on its services by 1.5% this summer, driven by a 15% increase on flights operated by its Transavia budget carrier. The Franco-Dutch airline group said it would offer 0.1% more long-haul capacity on its network as it resumes services between Paris and Tehran, increases flights to the United States and China, and launches a new route between the French capital and Astana. KLM is suspending its summer service to Dallas because of lower demand in the gas and oil market, Air France-KLM said. The medium-haul network will offer 0.7% more capacity, with 13 new routes across Europe, while Transavia will add 36 new destinations. Air France-KLM is cutting staff costs and restructuring its network to better compete with deep-pocketed Gulf airlines and fast-growing European low-cost carriers.<br/>
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A childhood friend and judo sparring partner of Russian president Vladimir Putin is looking to buy half of the state’s controlling stake in airline monopoly Aeroflot, according to three people familiar with the issue.<br/>Putin is sympathetic to Arkady Rotenberg’s attempts to obtain a 25% stake in Aeroflot, which currently has a total market value of Rbs69bn ($970m), two of the people said. Another person close to Aeroflot said management was aware of Rotenberg’s ambitions. If carried through, such a move would raise concerns over the transparency of the government’s drive to privatise several big state-owned groups to plug a widening hole in Russia’s budget. Any deal that would give Rotenberg a significant say in running Aeroflot would make Putin vulnerable to criticism he is allowing the rise of a new oligarchy. Rotenberg denied the claims. “We are not planning to acquire any stake in Aeroflot,” said a spokesman for him. Aeroflot declined to comment. Rotenberg and his brother Boris amassed fortunes during Putin’s presidency by winning contracts for major state projects, often through opaque, no-bid tenders. Numerous formal hurdles remain to the privatisation process, and Rotenberg could still decide not to pursue a stake. But Putin approves of Mr Rotenberg’s attempt to increase his influence over the air sector, according to a source knowledgeable about his efforts. “It’s entirely logical,” the person said. “They own the terminal, they own the runway, so why shouldn’t they own the planes flying there?”<br/>
Kenya Airways is planning a 70 billion-shilling ($690m) restructuring program that includes reducing its fleet and cutting staff, CEO Mbuvi Ngunze said. The carrier, based in the capital, Nairobi, has been working on a turnaround plan after reporting the largest loss in Kenyan corporate history last year. The carrier plans to raise 40b shillings through debt and equity funding as part of its strategy, Ngunze said Wednesday. “Do we need to rationalize our staff? Do we look at opportunities to reduce costs? Yeah,” he said. “We will be totally sensitive with this as this is an emotive issue, but certainly there will be some hits.” The carrier has sold two Boeing 777-200 aircraft and will sell two more, and it’s searching for carriers to sub-lease four of its Boeing 777-300 planes for a period of four or five years. A reorganization plan developed by McKinsey & Co. seeks to return the company to profit and may result in the company’s 4,000-strong workforce being cut by at least 30%, according to Eric Musau of Standard Investment Bank. <br/>