Speaking before the Senate Committee on Planning and Sustainable Development on January, Air France-KLM’s new boss, Benjamin Smith, has voiced his ambition for the airline while not obscuring the difficulties of the group.
According to Benjamin Smith, the Air France brand holds a “very strong potential”, especially among “premium” customers, those who have the means to afford better than the Economy class. This is the reason that pushed him to shut down low-cost subsidiary Joon.
“The multiplicity of brands has created complexity and has undoubtedly weakened the power of the Air France brand.” said Air France’s CEO Benjamin Smith.
To become the leading airline group in Europe, Air France-KLM will review its long-haul offers to bring them “more consistency and simplicity”. The maintenance will also be reviewed and improved.
Air France to favour Business Class, KLM doubles-down on Economy
Ben Smith wants to reduce the number of Economy Class seats in long-haul flights and install more Business Class seats. Conversely, Ben Smith wants to increase the number of seats of KLM aircraft cabins in Economy Class, and reduce the space given to “high-contribution” passengers, a new policy that is partly due to adapting to the near-saturation of Amsterdam-Schiphol airport, KLM’s hub.
In a nutshell, Air France flights should become more profitable with fewer passenger seats and a focus on its Business Class, while KLM, which is unable to increase the size of its fleet, would increase the number of passenger seats, focusing on leisure flights.
High level of social security contributions
Ben Smith praised the “quality” of the discussions between management and social partners, stark contrast with what the company experienced last spring. Air France-KLM boss was able to calm down the social climate by signing a wage agreement with all categories of staff.
Benjamin Smith did not hide the difficulties the airline was facing. There is “the level of social security contributions in France and its lack of cap,” the Chirac tax that weighs on the price of airline tickets.
He also warns that the privatization of Aéroports de Paris can not be done “to the detriment of competitiveness”.