Air France-KLM Group and China Southern Airlines agreed to have exclusive discussion over the creation of a cargo joint venture in China, according to the source with Air France-KLM Group Sunday.

Air France-KLM Group and China Southern Airlines already have extensive cooperation in both passenger and cargo services.

Further details of the joint venture will be announced later after the discussions, according to the source.

China Southern Airlines is the largest carrier in China in terms of fleet, routes and annual passenger carrying capacity. It operates more than 600 domestic and international routes with destinations to 152 cities throughout China and the world.

In 2006, China Southern Airlines carried 49.21 million passengers and was the only airline on the Chinese mainland to rank the world's top ten passenger carrying airlines.