Air France (AF, Paris CDG) and KLM Royal Dutch Airlines (KL, Amsterdam Schiphol) board members held a meeting on Thursday, September 4, in which they reviewed the Group's current operational status ahead of the official unveiling of their new "Perform 2020" five-year growth plan later this week. Among the core decisions taken are the phasing out of the Group's loss-making freight subsidiary, Martinair (Netherlands) (MP, Amsterdam Schiphol), and the repositioning of Transavia France (TO, Paris Orly) and Transavia Airlines (HV, Amsterdam Schiphol) as regionally-based budget carriers.
Referencing the Group's freight activities, the Air France-KLM board said a slower than expected recovery in demand had led to the decision to reduce its Amsterdam Schiphol-based dedicated freighter fleet to just operational 3 aircraft by the end of 2016. Five Martinair MD-11(F)s will be phased out on an accelerated basis during 2015 and 2016.
Overall, come 2016, the Group will operate five full-freighter aircraft: two Air France Cargo B777-Fs based at Paris CDG and three KLM B747-400(F)s based in Amsterdam Schiphol, compared with a total of 14 in 2013. The resulting scaling down in operations effectively means Martinair will cease to exist.
"The Group will remain a major player in the cargo sector in Europe through its extensive belly network effectively supplemented by a limited number of full-freighter aircraft," it said.
Referencing its regional passenger service plans, the Group approved recently reported plans to reposition Transavia and its French sister, Transavia France, as a unified, regional budget carrier dubbed "Transavia Europe" capable of winning back market share lost to the likes of Ryanair (FR, Dublin International), Wizz Air (W6, Budapest), and easyJet (London Luton).
Beginning in 2015, Air France will transfer its entire European leisure market to Transavia Europe with initial foreign bases to reportedly include Porto, Lisbon and an unspecified German airport. According to France's La Tribune newspaper, 15 cities are currently under consideration with Madrid Barajas and Brussels National among them.
The move, however, is expected to come up against stiff union resistance given that a 2007 agreement with management establishing Transavia France specifically requires the airline's fleet not exceed 14 aircraft. Air France CEO Alexandre de Juniac has gone on record as stating that the only way for a repositioned Transavia to effectively compete with European LCCs would be with a dramatically expanded fleet of at least 100 aircraft.
Referencing Air France's plans to reorganize its Point-to-Point network, currently managed in tandem with HOP! (France) (A5, Paris CDG), the Group has appointed Lionel Guérin, HOP!'s current Chairman and CEO, project manager in charge of the new unit.
"This new organization should allow to clarify the scope of each of the brands, align the key functions in defining the offer and customer experience and facilitate the global economic management of the activity in order to continue to guarantee a competitive cost structure," the carrier said.
Air France plans to transfer most of its Paris Orly point-to-point domestic flights - except Nice, Marseilles and Toulouse Blagnac - to HOP!
A full disclosure of Perform 2020 is expected on September 11.
