Europe

Air France plans low-cost flying unit for long-haul routes

Air France A340
Tis Meyer / PlanePics.org

Air France announced the creation of a new company alongside Air France, a more competitive and innovative version of itself, in hopes of better competing with Middle East carriers and low-cost rival airlines.

The new airline has no name yet, and it’s not clear which destinations it would serve.

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.

The new company will also serve as a laboratory for the Group’s innovative ability in terms of products, digital and technology, catering, cabin design, services and the customer experience, as well as for working methods.

It will number ten 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 optimized by benefiting to the maximum from digitalization. The HR framework for this new company will be negotiated with the unions in the coming weeks.

Jean-Marc Janaillac, Chairman and Chief Executive Officer of Air France-KLM, said:

“Air France-KLM regains the offensive with a project which is both ambitious and realistic. It will enable us to capture our share of air transport industry growth by improving the competitiveness of our businesses”.

“Our strength lies in the fact that we are challengers. The status quo is not an option. We must launch a new dynamic to return to a leadership position in our markets.” said Jean-Marc Janaillac.

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