Thursday, November 3, 2016

Air France: to Launch a new company, a good idea? –

the new CEO of The Air France-KLM group Jean-Marc Janaillac on the 27th July 2016 in Paris – ERIC PIERMONT AFP

AVIATION The CEO of Air-France wants to create a new company to take a position on the long-haul less-expensive…

We will know soon where to head to find tickets little expensive for a small weekend in Portugal. In 2017, a new entrant will come in to swell the ranks of low-cost airlines Easyjet, Ryanair, Eurowings, Wow Air, Norwegian… The CEO of Air France-KLM Jean-Marc Janaillac has presented on Thursday its project of creation of a new airline for flights medium and long haul less expensive. A good strategy for Air France ?

The low-cost calls over the long haul

This new company, which we do not yet know the name, will offer flights starting in the winter 2017 on the medium-haul and in the summer of 2018 on the long-haul, while Transavia, the current low-cost airline of the group will refocus ” on its domestic markets in france and the netherlands “.

” This is good news ! “says Philippe Berland, a specialist in the air at SIA Partners. Because the discount is gaining the far-away destinations. Eurowings, the low-cost airline of Lufthansa, calls since June its passengers to reach Boston from 144,90 euros one-way. And the company plans to inaugurate nine links long haul flights in 2017.

similarly, the Group Dubreuil (Air Caribbean) lancéFrench Blue this year. “This positioning of Air France-KLM is essential : the company is trapped between a side of the low-cost carriers such as Easyjet and asian companies and the Gulf who offer extremely low rates,” said Gerard Feldzer, a consultant in aviation and transportation.

The new company will be “the answer for the airlines of the Gulf that thrive at low costs on key markets in which Air France-KLM wants to continue to grow”, but where the lines are loss-making, says the group. According to Jean-Marc Janaillac, arrived at the head of the group Air France-KLM at the beginning of July and also appointed president of Air France Wednesday : “KLM has 10 to 15% of its long-haul who are not beneficiaries, of the Air France a lot more with 35 %, including 10 % of lines very heavily loss-making “. The future company will have to both save lines threatened, the reopening of closed lines and operate 30 % of the new lines. It will have to do this to 10 aircraft by 2020.

And now, the low-cost airline expands on long-haul flights

And it will be positioned on destinations, business and leisure, with standards comparable to those of Air France in terms of quality, adds Air France-KLM speaking of a ” laboratory for the innovation capacity of the group “. “The goal is to be able to offer prices that are competitive with a good price-quality ratio, compared to those practiced by our competitors,” according to Jean-Marc Janaillac.

Resume dialogue social

” If the plan seems to be to the height of the stakes in a global market particularly competitive, it will be necessary to see in detail its implementation “, swatch Philippe Berland. As the CEO, arrived in July, was in front of him and the trade unions very cut up. In launching a new company, and by naming this project ” Trust together “, it tries probably to turn the page on years of social unrest.

” Place this project under the sign of trust is a good method to reignite the dialogue with employees, ” says Philippe Berland. “The CEO has to play on the innovation, and offer hope to the staff, otherwise it will not be a greater plan,” stresses Gérard Feldzer. And it has an interest also to reassure its partners including KLM, tired of the social unrest to repetition. “

Reluctance on the side of the unions

But the negotiations, which will open as soon as the next few weeks promise to be difficult. After the presentation of the plan in detail this Thursday, the unions don’t seem all convinced. The new company “will build on pilots of Air France volunteers, with rules of use and of remuneration appropriate, and a cabin crew (PNC), recruited externally, in order to be” in the level of costs of the market, ” said Thursday the executive.

the ambition of The project seems to seduce the drivers. “With the prospect of a new company, the pilots of new career opportunities : co-pilots training to become faster commanders. As for aircrew, with many more, promotions are more rare, ” explains Gérard Feldzer, a former pilot of the French company.

On the other hand, hostesses and stewards have voiced their anger. “By creating a similar type of entity, operating within the same market segment, at a lower cost, our first competitor will be our new subsidiary,” writes the union, Unac. Who does not hesitate to speak of the “death foretold” of the company history Air France.

Air France-KLM: The management tightened up and it is the CEO of Air France, which in fact costs

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