Air France announces Airbus, Boeing aircraft orders.

PARIS--(BUSINESS WIRE)--Nov. 20, 1996--The Air France board of directors met here today to approve the airline's expanded long-haul fleet program.

Due to its financial situation at the end of 1994, Air France was forced to freeze its existing aircraft orders, particularly a large contract with Boeing dating back to 1989, and, in the following months, to renegotiate interim agreements with its two suppliers, Airbus and Boeing.

Since then, the airline's policy has been to rationalize its existing fleet operations as much as possible, with the subsequent reorganization of its network, and to optimize aircraft utilization by increasing the average number of flight hours performed by each of its aircraft by 14% over two years.

Today Air France is reaping the benefits of its corporate plan:

-- The Paris Charles De Gaulle hub is now operational and draws

a great deal of traffic;

-- Operations have increased, while costs have been contained,

leading to profitability and reduced financial debt;

-- The main lines of an international policy of alliances have

now been decided.

To sustain this development and continue to rationalize its fleet, Air France announced these aircraft orders:

I - 10 Airbus A340-300E, to be delivered in the next few years.

Air France was the launch carrier for the A340. It currently operates 11 of these aircraft and has performed over 167,000 flight hours with them in remarkably reliable and efficient conditions.

Last June, Air France confirmed its order for five four-engined 271-ton A340-300E, powered by CFM 56-5C4 engines, to be delivered between autumn 1997 and the end of 1998.

Air France has now decided to raise the total number of firm orders for the A340-300E to ten, confirming its confidence in Airbus and its satisfaction with the four-engined aircraft. Thanks to its state-of-the-art technology, flexibility of use, long operating range and excellent cost-effective performance, this aircraft is an essential component of the Air France long-haul fleet.

The Air France A340-300 is configured for three classes, thereby carrying a total of 252 passengers in excellent comfort.

Also, the entire A340-300 fleet of 257-ton aircraft currently in service, powered by CFM 56-5C2 engines, will be converted to the 260-ton maximum take-off weight version with the new CFM 56-5C3 engines.

Air France has also taken out options on five more A340-300E, which, when converted into firm orders, would increase the airline's A340 fleet to over 20 aircraft. These options may be changed for the A340-600, the large-capacity A340 with a very long operating range, in which case Air France would be the launch carrier.

II - 10 Boeing 777-200, replacing other Boeing orders

When Air France fundamentally reviewed its orders for Boeing aircraft in spring 1995, it agreed to take delivery of seven 767-300S and eight 737-500S by March 2001.

The success of the Charles De Gaulle Hub and resulting growth prospects for the group have led to a change in Air France's long-term requirements, now directed to larger-capacity long-haul aircraft. Air France and Boeing have therefore come to a new agreement, under which the previous 15 orders, now canceled, will be replaced by a firm order for ten twin-engine 777-200 aircraft and 10 options. All will be the Increased Gross Weight (IGW) version, with a maximum takeoff weight of 648,000 pounds, powered by GE-90 engines developed by General Electric in partnership with the French Company SNECMA.

This version of the 777-200 will enable Air France to fly to very distant points under optimum conditions, with a three class configuration for 288 seats, particularly well-adapted to routes with strong business traffic.

With these two orders, Air France confirms its determination to rejuvenate its long-haul fleet. By focusing on aircraft best adapted to its requirements, Air France continues to improve its operating margins and lays the foundation for its future expansion.

CONTACT: Air France

Bruce Haxthausen, 212/830-4482