Thursday, November 3, 2016

Air France-KLM: quarterly earnings rise substantially, but high uncertainties for 2016 – The Parisian

Air France will develop a new airline to adapt to “situations of hyper competition” in the face of the companies of the Gulf, in the framework of the strategic project that must be presented on Thursday by the CEO of Air France-KLM Jean-Marc Janaillac, according to a press release from the group.
This new company, which is expected to start in the winter of 2017 on the medium-haul and in the summer of 2018 on the long-haul, aims to offer cheaper flights, but will not be a low-cost, assured the group, confirming information disclosed Wednesday by sources close to the matter.
This subsidiary will be positioned “on lines, structurally in deficit or closed in recent years,” according to the air group.
Jean-Marc Janaillac, who took the head of the group Air France-KLM at the beginning of July, and will take up the chairmanship of Air France, presents this Thursday morning, in a Committee of the central organization, and then in front of the press, the strategic plan, the “Trust Together” (the confidence set).
The new company, “will be the response of the Group companies in the Gulf that is developing low-cost on of the key markets in which Air France-KLM wants to continue to grow,” says the press release.
“This project of reconquest is called a Boost,” adds the group without revealing the name of the future company “will be focused on the markets hyper-competitive, and will enable the Group to be aggressive in opening new lines, reopening closed lines as non-profitable and keeping lines threatened”.
“It will offer its clients destinations for busines s and leisure, with standards comparable to those of?Air France in terms of quality of product and professionalism of the teams”, adds the communiqué, speaking of a “laboratory for the innovation capacity of the Group.”
The company will have 10 long-haul aircraft by 2020 and will operate for approximately 30% of lines newly created”.
It will work “with the pilots of Air France on a voluntary basis, with the rules of use appropriate to its competitive positioning,” and that”sector-specific” will be created “in respect of the commercial aircrew to enable the company to operate this new company in the level of costs in the market.”
The social framework of this new company will be negotiated with the social partners in the coming weeks, adds the group.
The implementation of the “Trust together”, which is structured around nine “strategic directions”, must reach in 2020 a turnover of abou t 28 billion euros, compared with 26 billion by 2015 for 100 million passengers carried, according to the release.
Air France-KLM had previously reported a rise of 13% in net income in the third quarter to 544 million euros, while stressing that the outlook for 2016 remained marked by the consequences of the attacks and the destination France is particularly affected.


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