With Covid. how fares and the offer brought customers back to Air France

In the winter of 2020, the ban imposed on almost all of Europe plunged air, rail and road carriers into an unprecedented crisis. After the surprise, everyone responded according to their abilities and the social rules of each country. Among the Anglo-Saxons, both airlines and airports witnessed waves of mass layoffs. On the continent, thanks to the intervention of the states, everything went more smoothly. In France especially. Thus, Air France was bailed out in the amount of 7 billion by direct shareholders and a loan guaranteed by the state. In turn, Lufthansa received 9 billion from the German government, and Iberia/Vueling received 1.1 billion from the Spanish state.

This uninterrupted support from the French state enabled Air France to keep part of its operations captive, unlike other major European companies. He managed to increase his takedowns from 5% to 41% when others remained close to zero. And this for many reasons. First of all, the national company was tasked by the state to repatriate citizens stuck in the four corners of the world. Then, operationally, Air France adapted to the daily evolution of full or partial border closures. From this great cruise, the company has gained two tremendous advantages as it returns to normal.

No longer available in the United States

By only partially curtailing his operations, he permitted the steady flight of his fleet. In addition, thanks to France’s fluctuating partial unemployment system, none of the flight crew lost their licenses. Pilots, for example, must complete at least 3 take-offs/landings within 90 days to maintain their endorsement. Because of this offer, which is superior to that of other European long-haul companies, Paris-Airport is thus committed, willy-nilly, to maintaining a substantial service. During recovery, this avoided the bottlenecks we saw in London, Amsterdam, Copenhagen or Hamburg when passengers returned. This policy also made it possible to attract and retain passengers who had not flown with Air France before. As a result, the national airline has gained market share across almost its entire network in the medium to long term.

For the United States destination, for example, it managed to go from a 60% offer in September 2021 (compared to 2019) to 90% two months later, reaching a high of 110% today. On these transatlantic routes, Norwegian’s bankruptcy will benefit it, as will the difficulty caused by the traditional American carriers’ lack of qualified personnel to strengthen their lines. It ranks third in Europe after Wizzair and Ryanair. Wizzair, which has a large presence in the East and often enjoys a monopoly on some of its routes, was not helped. As for Ireland’s Ryanair, it has accumulated hundreds of millions in unnecessary subsidies over the years and has been condemned by Brussels for doing so. Because it operates from secondary airports, it has not been affected by the labor-intensive recovery of major European hubs, which easyJet has suffered greatly.

The recovery for Air France is such that it currently has no planes or crew, even if China is partially closed. At the heart of the crisis is a hundred A320s and A320 Neos, the purchase of KLM and Transavia, which surprised everyone at the time, will not be enough to meet the needs. The company also continues to add 350 pilots to its flight crew this year. The strategy was certainly bold, but its two leaders, Ben Smith and above all Anne Rigale, took a risk with the help of the state. In the process of restoring long-haul traffic, which was primarily about entertainment and interaction, the national company has a structural advantage over its competitors; half of the business class seats are bought by passengers for… leisure. This is compounded by the decision to extend full ticketing flexibility in contrast to network-wide competitors, which have been medium-haul network boosters.

Still some trouble

However, Air France faces certain dilemmas. For example, he had to cut short his trip to Gran Canaria using an Airbus A320 for 10 hours, so that this aircraft could be assigned to shorter and more profitable routes such as Barcelona and Madrid. “All our planes are flying” explains Olivier Piet, project manager. “To reopen Hong Kong three times a week in January, we will have to take capacity elsewhere. he continues. In the summer of 2022.We were at the maximum capacity of the network both during the stopover and during the flight. »

Unit revenue has increased dramatically as passengers buy their tickets at the last minute, when they are most expensive, in addition to holiday departure periods. These revenues enabled the company to pay off the one billion euro loan guaranteed by the state. And to put themselves in good stead, possibly relaunching alongside Delta and Certares, ITA Airways, an Italian company.