Air France: Ben Smith’s challenges

As soon as he is settled in, the new Air France-KLM boss and temporary head of Air France will have to face various challenges.

Restore customer trust

One can say what one wants the customer does not like to live with a permanent threat of strike on the head. How many of them have carefully avoided the French carrier this summer so as not to find themselves in a rut and see their vacations ruined? A significant number in our opinion. Assuming that trust is like toothpaste: once it’s out of the tube, it’s hard to get it back in again, the task is going to be arduous and time-consuming.

Ironically, the restoration of customer confidence is one of the injunctions of the pilots’ unions, even though they are the ones primarily responsible for its degradation.

Putting the customer back at the center

The customer has always been the big loser in the never-ending psychodrama between management and unions. Even if the business has made efforts and listens more and more to its customers when it comes to designing new products or services, it has not yet gone far enough and too many people still imagine that the customer is captive and that the airline’s job is to fly planes and satisfy certain categories of personnel, not to satisfy passengers.

Align everyone and clean up

A good specialist in the field once told me “the problem with Air France is that it is a business where too many people have the power to say no”. It is clear that the business will not transform as long as all initiatives end up always finding someone to block them.

This business must finally be united in support of a project – whatever it may be – even if this inevitably means a bit of housekeeping. In any case, there will be no new ideas without new blood and it is rare that a business manages to get out of the rut thanks to those who put it there.

In addition, the long decision-making cycles and excessive go-to-market that have often plagued the airline are a scourge that will also have to be overcome one day.

In a word, we need people who think business and not politics, managers, not state clerks or administrators. People who are not afraid to displease and move the lines.

Clarify brands and their positioning

So maybe the marketing department has had a lot of fun lately, but one thing is clear: the Air France offer is nowadays unreadable.

There are Air France, Hop, Joon, Transavia with positioning that is not always clear and demarcation lines that are blurred to say the least. Between the real low-cost, the one that is not a low-cost but presents a degraded service, the Air-France flights operated by Hop, the Hop flights operated by Air France… the passenger does not understand anything anymore. Add to that the probable arrival of a long-haul low-cost airline and the picture is full.

Let’s be clear: Joon is a heresy that is gradually stripping the Air France network of its clothes at the cost of a degraded service for the passenger and at the speed things are going, what was supposed to be an exception may become the norm.

The rationalization of the brand portfolio and therefore of the positioning is therefore a necessity.

Modernizing the fleet

The 787s have almost all arrived, the A350s will arrive gradually and first at Joon, no announcement regarding the 777 fleet of which a significant part will soon be 20 years old, an A380 of which we do not know if it will remain in the fleet or not, an aging 340 … If we talk about growth and performance, there is a need for both more and younger aircrafts. Nothing in sight on this side except on the medium haul.

But you still need to have the necessary cash….

We can also question the rationale for dispatching 350s and 787s between Air France and KLM, rather than standardizing the fleets within each airline in the absence of global standardization.

Resuming the move upmarket

The move upmarket, or at least the start of it, will remain one of the strong points of Alexandre de Juniac’s presidency, after years of erring on the product and disastrous choices regarding the business class product that the company is still suffering from. The latest Flight Report study on the subject is eloquent: if the “Best” product still looks good, it is only the tree that hides the forest.

Today the main service markers have disappeared, the “best” cabin, which was a real leap forward when it came out, is starting to look outdated in the face of what the competition is starting to offer, especially in the front classes. As for the 380, the “retrofit” of its cabin, often mentioned and always postponed, makes its outdated cabin an excellent reason to avoid using it.

Getting rid of the state

The State is a shareholder who, in addition to being cumbersome, is incompetent and the side effects of its presence in the capital of Air France have cost the airline money and, worse still, time. Running a business with the State at your side is like driving with a blind companion who has had a few too many drinks. Suicidal.

Obviously Ben Smith has ideas on the subject and has already tested the field, even if it means being reprimanded by the Minister concerned, but this shows that he has understood the scope of the subject.

This goes back to what we said earlier: Air France has no use for a shareholder who appoints political commissioners to ensure that Air France continues to preserve a dying model without making any waves and bringing nothing in terms of business.

Air France has two priorities in its actions, speed and scalability, whatever the price, no matter if it explodes the soft consensus that leads nowhere but has always satisfied the politicians whose interest is not the economic performance of the business but a deceiving social peace.

Build an airline

Air France-KLM is one business, Air France and KLM two businesses and two airlines. Not only in terms of integration and synergies, we are still almost at zero since the merger of the two airlines took place, but worse, the relationship is not always smooth, far from it. We can of course recognize that without Air France KLM would have surely disappeared or would be today a satellite of Lufthansa or British Airways, but we cannot deny either that the permanent psychodrama at Air France legitimately makes people cringe in the Netherlands. When a business unit in a company drives the bottom line and the neighboring business unit quarrels in a navel-gazing way without taking into account the common interest, there is a reason.

Air France-KLM must become one business and not a business that hosts two others, each operating several brands. A single business, therefore, operating a streamlined brand portfolio (see above). A single business with maximum sharing of support functions. A business that puts everyone in the same boat.

Others have done it and it is paying off.

Between the 12 labors of Hercules and the cleaning of the stables of Augias, Ben Smith has certainly found challenges worthy of his ambitions. We will judge on the spot even if the first signs are positive.

Bertrand Duperrin
Bertrand Duperrinhttp://www.duperrin.com
Compulsive traveler, present in the French #avgeek community since the late 2000s and passionate about (long) travel since his youth, Bertrand Duperrin co-founded Travel Guys with Olivier Delestre in March 2015.
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