Transavia: too little, too late? Air France-KLM’s LCC enjoys a growth spurt

At the time of Air France-KLM's 2Q2013 results on 26-Jul-2013, Group chairman and CEO Alexandre de Juniac said that the turnaround of the medium-haul business was taking longer than expected. "Further measures" are to be adopted, including "industrial and commercial decisions" and more job losses.

Although he did not give details of these measures, it seems likely that they will include an acceleration of the growth of Transavia, the group's LCC, to become its principal short/medium-haul point-to-point operator. In this report, we analyse Transavia's network and market position and compare its unit costs both with its parent and with the other European LCCs that have been so damaging to Air France-KLM.

The Dutch arm of Transavia has been part of KLM for more than 20 years and the French operation started up in 2007, but the group has not fully exploited its potential. After a number of years of following a 'stop-start' approach to growth, Transavia has resumed double digit capacity growth in 2013. Is it a case of 'too little, too late'?