MIAMI – Air France’s pilots faced a deadline, on May 31, to respond to the carrier’s plans for a new, more competitive subsidiary hoping to stem losses on many of the airline’s mid and long-haul services.
While the flight crews’ official decision was still awaited, the SNPL union was reportedly split, with some wanting to reject the deal completely, while others preferring to re-open negotiations with the company to try to improve the pay and conditions offered.
Cabin Crews say no
The cabin crew’s union took a hostile stance to what the airline calls ‘Project Boost’. It accuses Air France CEO, Jean-Marc Janaillac, of bullying tactics by saying he will go ahead with the new subsidiary, no matter what. Air France admitted that cabin crew for Boost will be hired from outside the company “through a dedicated subsidiary.”
Whether Janaillac and his managerial colleagues will be able to carry this out, his promise remains to be seen. Their workforce, after all, is composed of staff, some of whose members literally ripped the jackets and shirts from the backs of senior managers and forcing them to flee when they tried to give details of planned redundancies in 2015.
Fighting the losses with lower costs
At stake is Air France’s chance to fight back against competitors, particularly the major Gulf carriers, which have steadily siphoned off Air France’s passengers in recent years.
According to Air France figures supplied to Airways, 35% of its long-haul routes and an astonishing 80% of medium-haul routes are loss-making. Just 10% of its long-haul network and 20% of its medium-haul routes generate €300 million ($335 million) of losses annually.
The carrier’s answer to this, first spelled out in November 2016, is Project Boost. A definitive name for the new airline is due to be announced over the summer, with European flights to mid-haul destinations due to start in the winter 2017 season.
It is intended to be a ‘lower cost’ (but not low-cost) operation with operating expenses significantly cut in comparison to the mainline Air France fleet. Services such as baggage-handling and passenger-handling will be outsourced, for example. “The objective is to have unit costs (excluding fuel) 15% lower than those of Air France on medium-haul and 18% lower on long-haul,” said a spokesman.
Cabin crew is up in arms over the plans, with their union website accusing the company of pursuing a policy of ‘divide and rule’ by allegedly agreeing to most of the pilots’ union SNPL’s demands while ignoring those of the flight attendants.
An Air France spokesman, answering questions from Airways, said Boost was intended to be “an agile company, with lower operating costs; an innovation laboratory, serving destinations that Gulf or low-cost airlines operate.” Ideas successfully tried out on Boost may be transferred to Air France main fleet, he added.
“Boost is an innovative airline, targeting a younger generation of travelers – the millennials. It will offer competitive fares [but] it will not be a low-cost airline and not a similar product to Transavia [the Air France/KLM Group’s short-haul low-cost carrier].
For the first time, Air France has given a detailed breakdown of the equipment that the new operation will employ: starting this winter season with six Airbus A321s, which by next summer will have been stepped up to 11 A321s and six A320s for medium-haul services, plus four A340s for long-haul.
Long live the A340s
Surprisingly, given their high fuel costs, the A340s will continue to be used at least until winter 2020-21 – the most distant date for which Air France has given statistics – when three of the four-engine jets will still be in operation.
From winter 2019-20, the modern and much more cost-efficient A350 will start to join the Boost fleet. By winter 2020-21, this will consist of 11 A321s, six A320s, three A340s and seven A350s.
The A350s will have an “optimized configuration” – industry-speak for getting the maximum possible number of seats in the cabin – through a reduction in the size of the aircraft’s galleys.
In a presentation to analysts in May, the airline said Boost “will allow the Group to compete in an ultra-competitive environment and pursue its growth ambitions.” It said that the new offering would be “separate” but “aligned” with Air France.
“The target is to return to destinations where Air France can no longer be competitive, where routes have closed and where routes are not profitable,” said a spokesman.
Some 70% of Boost’s activities will be devoted to Air France routes that are currently losing money, in order to prevent them being closed down completely. The other 30% of activity will be devoted to opening up new routes.
Unlike Air France main fleet, Boost aircraft will not have a first-class cabin. They will be in two-class configuration. Janaillac has said in the past that Boost Business Class will have lie-flat seats, but window seats will not have direct aisle access, similar to some U.S. airlines’ Business Class offerings. This has raised some eyebrows, as it will be an inferior layout to the Gulf carriers with which Boost is expected to compete.
The airline has not directly answered this problem, merely stating that “the product will be completely different” to the main Air France offering. One area in which this will be seen is the increased emphasis on ancillary revenue. Boost “will offer onboard many paid options” – presumably a reference to catering and other services. Wi-fi is also expected to be offered – again, presumably at a cost.
Will Project Boost revive Air France’s fortunes? Will the unions even allow it to get off the ground? The next stage in the gripping Air France soap opera is about to begin.