Air France-KLM is creating a new company to compete directly
with the Gulf carriers, planning to operate 10 long-haul aircraft by 2020.
The company, an initiative Air France-KLM calls Boost, will
focus on "ultracompetitive markets" on which Gulf carriers operate,
including current Air France-KLM routes, new routes and routes that Air
France-KLM previously discontinued due to lack of profitability. New routes
will form 30 percent of operations. While Air France-KLM plans a "simple,
modern and innovative" airline, it will not be a low-cost carrier and its
product and service levels will compare to Air France, according to the
carrier.
The company will use Air France pilots on a volunteer basis
and will create an independent career path for cabin crews. Air France also
will handle ground operations.
The new company is part of a plan announced by CEO Jean-Marc
Janaillac, who replaced Alexandre de Juniac in July. Competition with Gulf
carriers—which several legacy carriers say benefit
from government subsidies, an allegation the Gulf
carriers deny—figures directly into two of the plan's nine parts. Another
part centers on lobbying initiatives to "establish equitable
competition" with Gulf and low-cost carriers.
As yet another part of the plan, Air France-KLM wants to
improve coordination with its Transavia low-cost carrier and its Hop regional
brand. Beginning in 2017, Transavia and Hop will be the only brands operating short
flights that do not connect with an Air France-KLM hub.
In
all, Air France hopes to reach €28 billion in revenue by 2020, compared with the
€26.1 billion reported last year, and to fly 100 million passengers and 435 nonregional
aircraft.