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Air France eyes move to railways

Air France is holding talks on a joint venture that could lead to it offering high-speed rail travel.

The airline confirmed reports it was discussing a possible tie-up with Veolia, a French utility firm that also runs several rail services.

Commentators suggest such a deal would enable the airline to cut fuel costs by moving some services onto the railways.

Under the plans Veolia would run trains from Air France's hub airport in Paris to other European destinations.

"We are reviewing the feasibility and possibility of such a project, but it is too early to discuss its terms," an Air France spokesman told the Reuters news agency.

Competition plans

The joint venture is likely to remain focused on international travel as, under European Union plans, legislation is set to free up the international rail passenger market in 2010.

Veolia has previously run public rail franchises in several countries worldwide under the now-defunct Connex brand. It now runs continental Europe's largest private freight service and several rail connections.

With significant improvements being made to the network of high speed rail routes in Europe the potential of such services is improving.

As it confirmed reports of the talks, Air France added it had been looking at launching its own rail links over the past four years as it had been unhappy with the service provided when it had bought rail seats off existing train operators.