European carrier Air Austral has made a formal application to the US Department of Transportation (DOT) for a foreign air carrier permit to allow it to inaugurate flights in the United States market. The airline, based in the French territory of Réunion in the Indian Ocean, is understood to be considering the launch of low-cost charter services via the European mainland into at least three US destinations.

In its formal application the airline remains tight lipped over its plans, except highlighting that services will be operated using Boeing 777 and 787-8 equipment. The airline lists five 777s and two 787s in its fleet, which currently mainly used to serve routes linking Réunion and Mayotte with Paris, but also on flights across Africa and into Asia.

Air Austral has also recently announced the launch of a joint operation with Air Madagascar to introduce flights to Guangzhou in China. The twice weekly service will launch from February 12, 2017 and will be operated using an Air Madagascar Airbus A340-300 operating an Antananarivo – Réunion – Guangzhou routing.

The expansion into the US market has been on the cards for a number of years but Air Austral’s timing is thought to be a reaction to the recent merger of fellow French carriers La Compagnie and XL Airways France, which together will offer strong competition between France and the US across both business and leisure markets.

These two airlines are now sharing common ownership under the DreamJet Participations umbrella (La Compagnie’s current holding company) and retain their individual brands and business focus, but will share costs and offices to further reduce operating costs.

All-business-class carrier La Compagnie currently operates premium flights between Paris and New York using 757-200 equipment, while XL Airways France operates A330s from Paris to a wider network including the Caribbean, New York, Miami, San Francisco, Los Angeles, Israel and destinations in the Indian Ocean.

The joint business is being described by the partners as France’s “first long-haul, low-cost group” and there are suggestions that this business could form the basis for the new low-cost, long-haul operation being established by national carrier Air France.

Analysis of the Schedules Analyser tool from intelligence provider OAG shows that there are currently 23 transatlantic city pairs between France and the US connected by non-stop air services. These are dominated by the Paris – New York corridor with almost 1,700 departures this winter linking Charles de Gaulle and Orly airports in Paris with New York JFK International and Newark Liberty International airports. This is just under a third (32.5 per cent) of all available departures between the two countries during the schedule period.

Over 90 per cent (92.5 per cent) of all flights operate from or to Paris Charles de Gaulle, with national carrier Air France responsible for 46.9 per cent of the total available seat capacity, ahead of Delta Air Lines (23.6 per cent share) and American Airlines (12.5 per cent). The market is heavily dominated by the legacy airlines with XL Airways France holding just a 2.9 per cent share of seats and La Compagnie just 0.6 per cent.

Overall two-way capacity between France and the US grew for a fourth consecutive year in 2016, based on published schedules, with an annual growth of 3.7 per cent. This followed year-on-year rises of 3.8 per cent in 2013, 3.0 per cent in 2014 and 5.7 per cent in 2015. This decade's 13.4 per cent growth has been driven partly by new arrivals such as La Compagnie and OpenSkies and from this year Norwegian, however the majority of the increased capacity has been delivered by Delta Air Lines which has grown its offering by 77.2 per cent since 2010.