Jul 04 2014
Monday handed the CEO of Air France 1 on what to implement to fight against low-cost airlines will he kindly stored at the bottom of a closet I need regular. Ordered by Frédéric Gagey2, the CEO of the company tricolor to imagine a sustainable future for the activity "point to point" – that is to say without match, so – short and medium letter of Air France group flights and reduce losses (200 million euros in 2013), this report contains the recommendations of an expert group. If the CEO of Air France is expected that the strategy currently being conducted, ie reducing the number of devices and stops where the losses are important and maintaining three brands is reinforced, this is not the case.
Shares of Air France erode market
The rapporteur this job is none other than Lionel Guérin, the current boss Hop! 3, the company that brings Airlinair Britair and Regional, three regional entities of the Air France4 who steal appliances from 48 to 100 seats. The expert group has tried to cope and rationalize, at least on paper, a business operated by three different companies within the Air France group: Transavia5, the low-cost intended for leisure flights, Hop, that regional conducts domestic flights to major European cities (Budapest, Vienna, Prague, Barcelona, Stuttgart …) and finally Air France whose market share erode. In some figures, these three companies together account 2 billion euros of turnover and employ 10,000 employees in this activity.
The facts are simple. Short and medium-haul to the hub at Roissy fueling long-haul flights Air France flights lose € 400 million per year but management tolerates some of these losses as it flows through the long-haul profitable. "We can accept losing to Air France 150 million euros per year to fill its planes at Roissy. These are costs that could virtually integrate long-haul, "says an analyst.
Beautiful margins low-cost
But no question of widening losses activity "point to point" that competitors such as EasyJet, Vueling or Volotea have captured while achieving beautiful margins. On flights between France and Europe, Air France lost 5 points of market share between 2010 and 2014. And the French domestic market, low-cost airlines increased from 15 to 27% market share between 2010 and 2014
. To stem losses the report proposes to set up in the autumn a new common organization Hop! and Air France for business functions such as optimization of sales by trade policy (revenue management), pricing … Each company would retain the operational management of its staff.
The report distinguishes between two market segments where business customers are involved and "VFR" visiting friends and relative, that is to say travelers who visit their friends and their families: a segment is predominantly leisure, whose customers are looking for low prices. Customers of the other, dominant business, favor the regularity and frequency while maintaining their wallet. Contain
Air France flights to match
Transavia meets unsurprisingly expectations first and should continue to grow from Orly, its current base, with ten additional Boeing 737 for its flights leisure. However, to meet the needs of the second category two opposing scenarios: either Hop, regional, fully recovered activity previously carried out by Air France at Orly especially with its mini price!. Air France is building on its reputation in housing activity in a "brand connected" to its name
. Clearly, the report's authors propose confine the short and medium-haul Air France connecting flights to Roissy and let companies "agile" take care of "point to point". On the social level, this scenario would obviously have serious repercussions. "The situation may be very tense in the coming months," says an official of the group aware that the courageous decisions remain to be taken. Frédéric
GAGEY has in hand a "hot potato" that he should say at half results on July 25 that it intends to do.Instant payday loan is a loan that is given without any mortgages or securities and you are to pay back the money on our next payday.