The Air France-KLM Group will establish a new carrier to operate alongside Air France (AF, Paris CDG) as part of its new "Trust Together" business strategy unveiled this week.
Based out of Paris CDG, Boost will allow Air France to compete with the Gulf carriers in "ultra-competitive markets" and to regain marketshare in regions where it has been forced to withdraw.
"This new company will propose a simple, modern and innovative offering, whose positioning will not be low-cost," a statement said. "It will offer its customers business and leisure destinations with standards comparable to those of Air France in terms of product quality and the professionalism of the crews."
Operationally, the new carrier will operate ten widebody aircraft by 2020. French media have indicated a number of A340-300s could be transferred to the start-up initially before the first A350-900s arrive from 2019 onwards. The carrier will employ "volunteer" Air France flight- and cabin-crews all of whom will work under cost-effective employment conditions which are still to be negotiated.
Air France-KLM's overall objective is for its longhaul business to attain profitable annual growth of between 2% and 3% through to 2020.
Aside from longhaul, Air France-KLM plans to develop its point-to-point operations, i.e. short- and medium-haul flights that do not operate via any of the carrier group's hubs, by increasing Transavia's share of the French and Dutch home markets. In line with this objective, effective 2017, Air France will reduce the number of brands in the French point-to-point market to just HOP! (France) (A5, Paris CDG) and Transavia France (TO, Paris Orly).
For its part, Transavia will reinforce its position on some routes to compete with the TGV high-speed train service and other LCCs such as Ryanair (FR, Dublin International) and easyJet (London Luton), and will develop European routes which depart from Paris Orly and France's regional cities.
“With Trust Together, Air France-KLM regains the offensive with a project which is both ambitious and realistic," Jean-Marc Janaillac, Chairman and Chief Executive Officer of Air France-KLM, said. "It will enable us to capture our share of air transport industry growth by improving the competitiveness of our businesses. Our strength lies in the fact that we are challengers. The status quo is not an option. We must launch a new dynamic to return to a leadership position in our markets.”