Routes Reconnected: Air France – KLM CEO: “Transavia won’t operate from Paris CDG or use A220s”
One of many areas that Smith has tackled since arriving is Air France’s significantly loss-making domestic market. “Air France lost about €200 million a year domestically,” Benjamin Smith, CEO of Air France-KLM, told Routes Reconnected live on the first day.
This was both from high-speed rail and LCC penetration, both of which continue to grow.
Losing €200 million made no sense, especially given how slot-constrained Paris Orly is. “This shouldn’t happen,” Smith said, and he acknowledged that Hop!, Air France’s regional subsidiary, was necessarily “very costly.”
Transavia France is taking over almost all of Air France and Hop!’s domestic routes from Paris Orly, with the LCC having “similar costs as easyJet.”
In December, the carrier will operate 15 domestic routes, OAG data shows, including some for the Christmas period. Paris Orly to Brest is top, followed by Nantes to both Marseille and Nice.
Smith tackled two limitations inhibiting the development of Transavia France. “One of the big efforts we worked on pre-coronavirus was the number of aircraft that Transavia could use.” Before it was 40. Now it is unlimited.
“We also focused on the domestic scope clause, which meant it couldn’t fly within France. That has also been removed.”
Air France – KLM focusing more than ever on core
KLM’s feed-focused hub at Amsterdam is strong, but it’ll see more refinement to improve margins. CDG is somewhat different.
“We can be extremely well-positioned at CDG,” Smith stressed. It will strengthen its banks at CDG while growing frequencies. It also expects more P2P traffic and the higher yields that ordinarily comes with that.
Air France’s focus on its CDG core means that Transavia France won’t operate from the airport. Instead, it’ll focus only on Orly and regional France, with its current four bases across the country.
Transavia will grow from regional France, but it won’t use Air France’s coming A220-300s – of which it has 60 on order – to do it, Smith confirmed.