Europe low cost airlines: Transavia is now free to play catch up

Premium Analysis

In Nov-2019 an agreement between Air France and its pilots removed the previous 40 aircraft cap on the fleet of Transavia France. In a further step towards expanding Air France-KLM's low cost brand, Air France's main pilot union, SNPL, has agreed to Transavia France operations in domestic France.

The Transavia brand includes both a French and a Dutch arm (respectively subsidiaries of Air France and KLM), reporting as one segment in Air France-KLM's group results. It has a genuinely LCC level of unit cost, but has lacked scale as a result of the pilot agreements that previously constrained its growth.

Air France-KLM's narrowbody LCC fleet is 40 short of Lufthansa Group's and 70 fewer than IAG's. The narrowbody LCC fleets of all three are much smaller than Ryanair's and easyJet's, but closer in size to Wizz Air, Norwegian and Jet2.com.

As European aviation slowly emerges from the COVID-19 crisis, efficient short haul operations are likely to prove crucial. Air France-KLM has much ground to gain on rivals, but at least it no longer has to compete with one hand tied behind its back.

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