Air France Flyers Told to Take Own Trash (Bloomberg)
July 8, 2011
Air France will ask passengers to clear their seats and take their trash with them when leaving the plane as the carrier seeks to cut costs and stem the advance of EasyJet Plc (EZJ) and Ryanair Holdings Plc (RYA) in its home market.
Paris-based Air France is working on the plan after cabin crew refused to assume cleaning duties at a low-cost operation it’s introducing in a push to claw back traffic at provincial airports, according to a union official involved in the talks.
Chief Executive Officer Pierre-Henri Gourgeon wants to eliminate ground-based cleaners to keep jets flying longer, emulating discount rivals and rendering hitherto-unprofitable regional hubs viable. Still, union wrangles have already forced one of four planned bases to be abandoned, even as EasyJet adds French routes and Spain’s Vueling Airlines SA (VLG) begins flights from Toulouse, one of the remaining locations.
Ryanair, the region’s No. 1 discount carrier, isn’t worried about Gourgeon’s plan and regards Air France’s strategy as “hopeless,” Chief Executive Officer Michael O’Leary said in an interview.
“No flag-carrier in the history of aviation has ever succeeded in rolling out a real low-fares airline,” O’Leary said.
Air France-KLM Group, Europe’s biggest airline, trails rivals in evolving a strategy to confront the no-frills threat.
BA Experiment
British Airways founded a low-cost subsidiary, Go Fly, in 1998 atLondon Stansted airport, Ryanair’s biggest base. Go was sold to 3i Group Plc in 2001 and then to EasyJet a year later, while BA pared its own unprofitable short-haul network to focus on providing feeder traffic to London Heathrow.
Deutsche Lufthansa AG (LHA) created GermanWings to defend its position on regional routes, and Iberia combined its no-frills operation with Vueling in 2009. The Spanish company has since merged with BA as International Consolidated Airlines Group SA.
“Air France is a little late making these adjustments and the market rolls on without waiting for them,” said Penny Butcher, an analyst at Morgan Stanley in London. “Most of their peer group recognized the low-cost threat and adapted their businesses years ago. The delay is 99 percent labor-related.”
Air France’s share of domestic and international traffic fell from 39 percent in 2002, when Luton, England-based EasyJet opened its first French base, to 34 percent in 2009, the most recent year for which a breakdown is available.
TGV Challenge
EasyJet more than quadrupled its French market share to 7.6 percent over the same period. It increased capacity on French routes by 35 percent in the first half and based a 22nd aircraft in the country to add summer flights from Paris Charles de Gaulle airport and winter services to Verona and Bologna, Italy. Spokeswoman Celine Prenez declined to comment on the Air France plan.
French short-haul air travel is also under pressure from state rail operator SNCF’s TGV high-speed trains as the network is extended and journey times fall.
Gourgeon’s strategy involves shifting part of Air France’s single-aisle Airbus SAS A320 fleet from Paris to Marseille, Nice and Toulouse, opening up dozens of new routes including services to north Africa, eastern Europe and Scandinavia.
Under the plan, staff will work longer hours and be stationed at the bases, paring costs and trimming the turnaround between flights to 25-30 minutes in order to lift time in the air to about 12 hours a day from the current eight or nine.
Bordeaux
Air France has dropped Bordeaux from the model, and may instead serve the city with smallerEmbraer SA (EMBR3) jets, while postponing the Marseille base’s opening from June to October to allow for extra union consultation, Gourgeon said in a June 16 interview, adding that the company wants its employees to endorse the plan.
“The delay is mainly because we want to do it in a win-win way with staff,” the CEO said. “We don’t force anybody, we don’t have to say ‘OK, you have to work more and make less money.’”
Members of Air France’s main SNPL pilots’ union accepted the strategy by a 54.5 percent majority in a ballot that ended this week, the labor group said on its website. Finding crews prepared to move to provincial cities may prove tougher.
The SNPNC cabin-crew union has rejected the plan, it said in an e-mailed statement yesterday. Fatiha Aggoune, the union’s president, said in a phone interview that talks broke down earlier in the week over issues including reduced rest periods and a lower hourly pay rate. Air France spokesman Jean-Charles Trehan declined to comment on the plans.