Air France has announced that it is leaving the Orly hub to concentrate its operations at Roissy. A decision that deserves some explanation and raises a few questions.
It had been talked about for weeks, leaked on specialized forums, and the Air France press release came out at the end of last week, confirming that the airline would be abandoning Orly in 2026.
Why is Air France leaving Orly?
The main reason for Air France’s move is traffic erosion, as the airline’s press release shows.
“The development of videoconferencing, the reduction in business travel on domestic routes and the shift to rail (under the combined effect of sobriety recommendations and business CSR policies) are leading to a structural fall in demand on Air France’s domestic point-to-point network. Between 2019 and 2023, traffic on domestic routes departing from Orly fell by 40%, and even by 60% for daytime round trips.”
And, of course, it’s a good opportunity to slip in a little ecologically correct message when it comes to the fact that Transavia is being considered to take over these routes.
“Transavia will continue its development trajectory, notably thanks to the ramp-up of its new fleet made up of Airbus A320neo family aircraft enabling a 15% reduction in fuel consumption and CO2 emissions, as well as a 50% reduction in noise footprint.”
Motives that, for us, hide a different reality, but we’ll talk about that below.
In the end, however, the airline promises that the offer will be virtually unchanged in terms of capacity.
Air France’s domestic offer in 2026
Today, Air France operates domestic flights from Orly to Nice, Toulouse and Marseille, Calvi, Pointe-à-Pitre, Fort-de-France and Saint-Denis de La Réunion.
In the new configuration services to Nice, Toulouse and Marseille, Pointe-à-Pitre, Fort-de-France and Saint-Denis de La Réunion will be reinforced on departure from Roissy and services to Corsica will be maintained in collaboration with Air Corsica under the current public service delegation, whose renewal will be sought.
In addition, services to Toulouse, Marseille and Nice from Orly will be transferred to Transavia in summer 2026.
The airline promises that “the Group’s capacity between Paris and Toulouse, Marseille and Nice will be kept at 90% of its current level, and at 100% for routes between Paris and the French overseas departments and territories“.
A drop in demand that should not hide the real problems
Let’s get the ecological argument out of the way right away: while Transavia’s A320neo aircraft will improve the Group’s environmental footprint, they would have done the same if painted differently.
As for the erosion of demand, it’s real, even if we prefer to talk in terms of a slow recovery to 2019 levels. But the figures put forward by Air France show that the airline is out of step with market trends.
In fact, for August 2023, the government has painted a picture of a worsening situation compared to 2019, but not to the extent suggested by Air France:
Domestic traffic stands at 88.8% of its August 2019 level (up +2.4 points on the previous month), with still a clear contrast between segments affecting Overseas France (104.3%) and domestic traffic within mainland France (83.7%). Year-to-date, the domestic traffic indicator stands at 83.8% for the first eight months of the year…
In August, overall traffic in France was back to 95.7% of its 2019 level.
These figures are certainly boosted by summer vacation traffic, but they tell a slightly different story from the one Air France is experiencing.
On the other hand, if we dig a little deeper, we realize that for domestic traffic in mainland France, while cross-country lines are at 92% of the 2019 level, radial lines are only at 77.7%.
However, from Orly, Air France by definition only operates radial routes. But here again, we can see that the airline is suffering more than the market or, depending on how you look at it, recovering more slowly than the market.
Especially as another figure puts this decline into perspective: Orly, along with Marseille and Beauvais, is the only French airport whose traffic is up compared with 2019 (110.8%). So of course these figures may be boosted by summer traffic, but all the same….
In addition, the French domestic market remains very solid. If we look at Eurocontrol’s figures for 2022, the French domestic market is the one with the highest number of movements in Europe.
There are more domestic flights in France than in any other country, and more than between any of the European countries.
The truth is that Air France is underperforming market trends, and there’s a fairly rational explanation for this: the market is mainly low-cost. In smaller proportions than countries like Spain, but it is. As proof of this, the airline that today serves the largest number of destinations in France is Volotea.
Finally, let’s not forget that in 2017 (and we don’t think things have changed since then), 50% of people flying in France were inactive or in lower socio-professional categories.
So Air France’s real problem is not just falling demand, but its difficulty in fully capturing existing demand. The fact that the airline starts by announcing a 40% drop in demand and ends by saying that 90% of capacity will be maintained, but with a more low-cost offer than before, says it all.
A major profitability problem
In such a context, one response might have been for Air France to strengthen its position on cross-country routes, but not only is this not its positioning, but regardless of whether we’re talking about radial or cross-country routes, the airline never managed to be profitable in its domestic market, whatever the means employed.
When we talk about domestic flights feeding the Roissy hub and the long-haul network, it’s an acceptable evil that can be seen as an investment because it enables us to sell more profitable long-haul flights, and prevents passengers from being tempted to take a Lufthansa, Swiss or Turkish Airlines flight to one of their hubs.
On the other hand, for point-to-point services, it’s an economic no-sense that the airline has been gradually putting an end to for several years, and this decision is in line with that trend.
But let’s just say that it makes more sense to link Air France’s decision to structural profitability concerns and the nature of the market than to a drop in demand.
Is leaving Orly the best possible decision?
From the customer’s point of view, it’s a decision that’s sure to cause some teeth grinding.
Firstly, Parisians and suburbanites on the left bank for whom Orly is much more accessible than Roissy, especially with the future extension of metro line 14.
Secondly, for users of the services concerned, as the offer on Orly, a more convenient airport for reaching Paris, will be reduced, and, whatever may be said, even if Air France service on these routes was rather minimalist, the Transavia product is still inferior.
Finally, it’s much less interesting in terms of loyalty programs. As Transaviane is not part of Skyteam, Elite passengers will not benefit from Skypriority benefits. Worse still, if Transavia’s lowest fare doesn’t earn XP or miles until March 31, after that date flights marketed and operated by partner airlines in the frequent flyer program but not Skyteam members will no longer earn XP. It would seem that for Transavia, the flight must have been sold by Air France or KLM and be operated under codeshare to continue earning XP and miles, which is not the case today for all Transavia flights. Similarly, passengers who are members of a Skyteam airline frequent flyer program (excluding Flying Blue) will earn nothing as Transavia is not a member of the alliance. Foreign tourists will love it!
For the airline, however, it’s undeniably the most rational choice possible. The offer has been maintained at 90% of its previous level, with part of it switched to low-cost, which corresponds both to market figures in terms of demand and to the nature of the demand.
Of course, others would have liked another solution, but from our point of view no other was possible, at least not with Air France’s cost structure, which is not as fortunate as some of its competitors.
Elsewhere, domestic flights are doing well
To check whether this was just a Franco-French problem, we looked at what was happening in some neighboring countries of roughly comparable size.
Germany to start with.
For Lufthansa’s Sales Manager, ” One-day trips within Germany have decreased, but the demand is still there”. Air France’s observation is therefore partly shared, but only partly.
But the German airline’s response to market trends and videoconferencing (another of Air France’s arguments) is radically different. As this article reports, “Lufthansa […] wants to increase the number of domestic flights in order to compete with rail transport and videoconferencing services“. The sales director even adds, “We want to make short-haul flights attractive again“.
A rather aggressive approach, perhaps explained by a more favorable cost structure and, perhaps, a market that’s a little more closed to low-cost competitors than the French market.
In the UK, the situation is even more surprising, since the government has decided to reduce the APD (Air Passenger Duty), an airport tax, in order to boost the domestic flight market.
Issues but also opportunities for Roissy and Orly
Air France’s decision will of course have an impact, and raises a number of questions.
The first is the future of Air France’s slots at Orly. In principle, they should go to Transavia, but who knows if the regulator will force it to give some of them back to the competition.
The second is the viability of terminal 2F at Roissy if it is to accommodate some of the flights previously operated from Orly. We don’t know at this stage how many flights will be transferred, but one thing is certain: 2F is already hard to live with for passengers, and it seems hard to imagine it being able to accommodate many more flights in conditions of acceptable comfort for passengers.
Especially as the day the commercial partnership with SAS becomes effective, it is highly likely that the Scandinavian airline’s flights will be transferred to 2F. OK, so that’s only about ten flights a day, maybe more if Air France decides to really pull out all the stops to feed its long-haul business from Scandinavia, but we’ll soon reach the limits of the 2F.
There’s the 2G, but that’s just a second-best solution that’s not convenient at all.
One day, the question of making the 2E-L hybrid Schengen-non-Schengen may have to be asked again. It was designed with this in mind, but this possibility was never exploited.
We also wonder whether some airlines might be tempted to take advantage of Air France’s slots at Orly. As we said, Orly is much easier to access than Roissy, and much more attractive for an airline that doesn’t need the hub effect of Roissy. That’s just about every non-Skyteam airline, whether medium- or long-haul. Of course, the limited number of flights and the curfew in force at Orly are a real handicap to its development, but an airline offering flights from an airport much easier to access than Roissy will certainly have a lot to gain.
Air France is rationalizing its domestic network and adapting to the new market situation by abandoning Orly in favor of Transavia and centralizing its operations at Roissy. The best of all possible decisions in its own context.
This decision ultimately raises the question of the saturation of 2F at Roissy, and potentially opens up opportunities for other airlines at Orly.