China Southern Airlines, the nation's biggest carrier by fleet size, said on January 24 that it is in talks with other foreign carriers besides Air France-KLM for an air cargo joint venture.

Xu Jiebo, China Southern's chief financial officer, said Air France was neither a preferred partner nor an exclusive foreign counterpart for its cargo venture, whose launch has already been delayed due to problems in talks with Air France.

Last September, Air France-KLM's chief executive, Jean-Cyril Spinetta, said the European carrier had started negotiations with China Southern for a cargo joint venture, though talks were at an initial stage at the time.

"We hope to launch the joint venture as soon as we can but so far the talks are not going very smoothly," Xu said when asked when the Chinese airline would partner with Air France for the venture.

"We are not in talks with Air France only, and we don't have any preference on the potential foreign partners we are in talks with at the current stage," said Xu.

"We all are making efforts and I hope we can launch the cargo venture within 2007," Xu said.

Air France-KLM was not immediately available for comment.

Xu declined to identify any other foreign firms in talks with China Southern but said the airline could only partner with foreign members of SkyTeam rather than rival network Star Alliance for such a joint venture.

SkyTeam is a global airline alliance headed by Air France-KLM and bankrupt Delta Air Lines while Star Alliance is led by Germany's Lufthansa.

China Southern signed a deal with SkyTeam last June in preparation to joining the network, Xu said.

"Originally, we hoped to launch our cargo joint venture at the end of 2006 but we failed to finalize talks with partners," said Xu.

China Southern plans to offer a 49 percent stake in the cargo venture so that it can still control the joint venture, he said adding the shareholding percentage does not present a problem with potential foreign partners. In early January, China Southern's major rival Air China said it planned to set up a cargo venture with partner Cathay Pacific Airways this year.