You might also like:
Air France KLM’s new long-haul operation, Boost, designed to compete with the Gulf airlines, will not be a low-cost model. In October, a spokesperson for Air France KLM said the group was considering entering the low-cost long-haul travel market.
Ten long-haul aircraft will be in operation by 2020 with 30% of operations focused on newly created routes.
The initiative will enable the group to reopen routes closed due to their lack of profitability and will assist in maintaining routes under threat.
Focus will be on 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 offering will be modern and simple, showcasing the group’s products, digital technology, catering, cabin design, services, customer experience, and working methods. The ground operations, handled by Air France, will also be optimised by digitalisation.
Kendy Phohleli, MD of XYZ Consulting, says to compete with the Gulf carriers, AF KLM will need to present an operation that offers more value at a lower price, because the Middle Eastern carriers have already taken the lead in both product and price.
He says a smart move for the group could be to focus on its premium customers as that is where the yield is. Phohleli says Lufthansa has already employed this strategy, by investing significantly in its premium product in an effort to position itself as the world’s first five-star airline.
He also says it is unclear how the group plans to leverage work conditions to compete more effectively, saying that with its unions, France has a highly regulated labour environment which makes it difficult for the company to be flexible in that regard.