Air France: the chance of being a challenger!

Things are moving at Air France since the arrival of Ben Smith. The Joon experiment is over, fare structures are being brought back into line, and Air France’s positioning and ambitions are being clarified. Honestly, we didn’t expect him to check off the items on our checklist so quickly.

Ben Smith gives the impression of walking on water And when you see the almost permanent psychodrama that has agitated the French airline for almost 10 years, you might think that a miracle worker is not too much to do to restore Air France to its former glory and, above all, to make it as economically efficient as its competitors.

And several things lead us to believe that the bet is winnable.

Focus on the customer and the industry experience

Ben Smith was expected to be in the nomination field and he did not disappoint. Appointing Anne Rigail as head of the airline is a strong signal that she has passed the main part of her career thinking about the customer and will necessarily instill a new mindset in the upper echelons. Infinitely better than the financiers, flight-fillers, aircrafts-densifiers or technocrats of any kind who have occupied or pretended to occupy the place.

The recent appointment of Angus Clarke as Deputy CEO in charge of strategy and the choice to entrust salary negotiations to Oltion Carkaxhija seem to us to be going in the right direction. Emphasis on knowledge of the industry and experience rather than the technocratic dimension that has often plagued the airline. And it doesn’t matter what nationality the leaders are, as long as the results are there for the staff and the customers.

But what makes us confident is that Air France will finally be able to attack the market and transform itself in a totally uninhibited way, because something has changed: Air France is no longer a leader but a challenger.

The weight of history and leadership

About ten years ago, a well-placed person in the airline with whom I was talking about the innovations implemented by the competition, whether in terms of technology, product, service or customer relations, told me more or less this. “Oh, but given our history and our position in the market, we can’t afford to do just anything, to follow every trend…in short, we will never be pioneers. We will only go for proven things”.

So be it. A message that says two things. First of all, we have a history, we are quite conservative and we avoid anything that might be too disruptive. Then we are leaders, so not only is there no rush, but a leader often has more to lose than to gain from change.

So if we take the opposite logic, and we have many examples that prove it, in the airline industry or elsewhere, a challenger is uninhibited and daring. Well, the good news is that for those who still have blinders on, Air France is no longer a leader but a challenger.

Air France in a new challenger position

You could tell that the airline was slowly and inexorably slipping, but the numbers were stubborn: Air France-KLM remained the largest European airline group in terms of revenue per seat kilometer, the industry’s benchmark. Well, that’s over:in 2018 Lufthansa went ahead.

One might say that being the European leader when the competition is international and the real leaders are to be found in Asia or in the Gulf is a bit futile, but at least it was still good news to hold on to, even if it meant forgetting the rest. And then, before being a world leader, you have to start by being a leader at home.

As for the number of passengers carried, the Lufthansa Group and IAG have long been ahead.

Challenger in terms of performance but also challenger in terms of product. The move upmarket initiated by Alexandre de Juniac has taken a slight setback. On the long haul side, the Best and Beyond product has been deployed slowly and partially. Too many aircraft still offer a mediocre experience with outdated cabins and, in addition, we are seeing some very interesting products from competitors who are catching up or even getting ahead of the curve. As for the medium-haul service, although it is often neither worse nor better than the competition, it isn’t very attractive. The irregularity of the level of service and the perceptible deterioration of the catering do not help.

Air France: challenger in the market, challenger in its own business

But Air France is not only a challenger to its European and global competitors, it is also a challenger within Air France-KLM.

From a financial point of view,KLM and Transavia are driving the group’s growth and profitability.

It is time to open our eyes (and that goes for clients too) to recognize that KLM is no longer the frumpy little sister of Air France, but a first-class airline. In 2018 we often chose KLM and not by default: it was a voluntary choice because of the quality of the product, the service and the price. Typically, in long haul on KLM you are now sure to have a business full flat no matter the aircraft. At Air France, only 47% of the fleet has a product that meets current standards. Nor do we talk about the threats of strikes that have prompted us to “secure” certain trips.

Another ranking that is only as good as it gets but is not uninteresting. The Swiss bank UBS has set up a trend monitoring and verification laboratory which, as far as airlines are concerned, is still based on the analysis of 30,000 customer reviews. According to this ranking, the best airlines to fly in Europe are, in order, KLM, Swiss, Norwegian and Lufthansa. Air France ranks 13th.

In short, it’s time to stop patronizing KLM and start using it as a model.

Excellent news for Air France

Of course, no one can be happy about such a situation, but from our point of view it has a virtue: no one can hide or close their eyes anymore and they will have to act on this reality.

Another advantage: there is no better signal to motivate the troops, to dare to do things, to become innovative again. Air France has nothing left to lose and must, on the contrary, become a conqueror. If the number one position was a burden or even a hindrance to change, the number two position may well help to free up energy.

Photo : Air France A380 by NextNewMedia via Shutterstock