September 8, 2008 / 4:40 PM / in 10 years

UPDATE 1-Air France, Veolia plan high-speed rail venture

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PARIS, Sept 8 (Reuters) - The world’s biggest airline by revenue, Air France-KLM, said on Monday it plans to move into high-speed passenger rail transport in a venture with French transport, waste and water firm Veolia (VIE.PA).

The Air France unit of the airline group said that it and Veolia were studying such a venture for when European rail passenger traffic is liberalised on Jan. 1, 2010.

However the company said in a statement it could not confirm a newspaper report that the deal could be signed on Sept. 15.

Air France-KLM said at the beginning of July that it was in discussions with Veolia about a partnership to create a new high-speed rail player in Europe.

Veolia’s shares closed up 2.80 percent at 33.5750 euros per share, while Air France KLM was up 2.25 percent at 17.0450 euros.

High speed rail travel is currently mainly in the hands of state-owned rail companies such as SNCF [SNCF.UL] or Deutsche Bahn [DBN.UL] or joint ventures between these operators such as Eurostar and Thalys. Private group NTV plans high-speed travel in Italy. (Reporting by Vanessa Walters; Editing by Quentin Bryar, Paul Bolding)

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