Transavia part 1. Pilots agree vital growth in France; Air France to rue end of pan-Euro LCC plan

Air France and unions representing its pilots and those of Transavia France have reached an agreement over the future development of the LCC subsidiary's French arm. This deal with SNPL Air France ALPA and SNPL Transavia needs ratification by the unions' membership, which Air France-KLM expects in mid-Nov-2014.

A key element of the deal is that Transavia France may increase its fleet beyond the current limit of 14 aircraft, which it has reached. Moreover, Transavia France pilots will continue to have Transavia France contracts. However, a crucial concession to the unions is the abandonment of plans to launch Transavia Europe, which was to have started up at bases outside the home markets of France and the Netherlands.

In this first report on the new draft deal to grow Transavia France, we consider the competitive environment and suggest Air France-KLM may one day rue the scrapping of its Transavia Europe plans. Part two will focus on how Transavia will develop alongside Air France's own medium-haul operations.