Air France will develop 'a new company' to regain advantage on long haul operations

Air France-KLM chairman and CEO Jean-Marc Janaillac stated (03-Nov-2016) one of the strategic priorities outlined in the Trust Together project is "regaining the offensive in long haul." Air France-KLM is targeting profitable growth for the long haul operations of between 2% and 3% per year through to 2020, based on several levers:

• At revenue level: Alliances and commercial integration with partners, together with investment in the existing tools;
• At cost level: Ongoing measures to improve the competitiveness of Air France and KLM. Concerning Air France, the development of an additional tool - a new company - adapted to ultra-competitive markets and positioned on structurally loss - making routes, or those that have been closed in the past few years. This new company will constitute the Group's response to the Gulf State airlines which are developing at low production costs on key markets where Air France-KLM is pursuing its growth ambition. This initiative to regain market share has been dubbed Boost. It will be focused on ultra-competitive markets and will enable the Group to go on the offensive by opening new routes, re-opening routes closed due to their lack of profitability and maintaining routes under threat. This new company will propose a simple, modern and innovative offer, whose positioning will not be low cost. It will offer its customers business and leisure destinations with standards comparable to those of Air France in terms of product quality and the professionalism of the crews. It will have 10 long haul aircraft by 2020 with some 30% of operations focused on newly-created routes. It will operate with Air France pilots on a volunteer basis at work conditions adapted to its competitive positioning. For cabin crews, an independent career path will be created to enable this new company to be operated at the level of market costs. The ground operations, handled by Air France, will also be optimised by benefitting to the maximum from digitalisation. The HR framework for this new company will be negotiated with the unions in the coming weeks. [more - original PR]