Air France CEO Jean-Marc Janaillac has confirmed that the Air France – KLM Royal Dutch Airlines group is looking to set up a long-haul, low-cost venture as part of their plans to regain lost international market share.
“The issue is we have new competitors, so how do we address this situation?” he told Bloomberg TV in an interview. “We’re not going to discuss it publicly because we have many possibilities we’re studying, and we’ve not yet decided what options to put together in order to cope with the arrival of new, long-haul, low-cost carriers.”
Air France is currently fighting the arrival of new low-cost, long-haul carriers such as Norwegian and Groupe Dubreuil’s French Blue, alongside existing pressure from Emirates, Etihad Airways, Qatar Airways and Turkish Airlines.
The move to long haul budget operations is one of three options currently being considered by the Franco-Dutch group, as first mentioned during the tenure of Janaillac’s predecessor, Alexandre de Juniac.
It came after the carrier revealing that only 50% of long haul routes are currently profitable. At the time, the plan entailed operating a number of B787-9s under an undisclosed brand using a cost base similar to that of Lufthansa Group’s Eurowings long haul budget subsidiary.
Any project like this would depend on the carrier’s workforce approving new labour contracts, a feat that seems to have proven very difficult in the past.
It is worth mentioning that in late 2014, a two week-long pilot strike over plans to change Transavia France into a regional European LCC with foreign subsidiaries, cost Air France EUR500 million in lost revenue.
In an effort to placate combative unions, Janaillac is due to present a new, revised business plan in November, ‘Trust Together’, which the French press ay will try and engender a greater sense of trust between management and the workforce.