AIR FRANCE-KLM: AN AMBITIOUS THREE YEAR PLAN TO RESTORE PROFITABILITY (http://corporate.airfrance.com/en/press/news/article/item/air-france-klm-un-plan-a-trois-ans-ambitieux-destine-a-restaurer-sa-rentabilite-1/)
Thursday 12 January 2012
At its meeting on 11 January 2012, the Board of Directors of Air France-KLM examined the transformation plan over three years (2012-2014) for the Group, and the implementation of the three priorities set out on 9th November last year: restoring competitiveness through cost-cutting, restructuring the short- and medium-haul operations and rapidly reducing debt.
Downward revision of capacity growth and investments
The Board of Directors first examined the Group’s growth prospects for the next three years. Given the uncertain economic environment and the ongoing imbalance between transport supply and demand, the Board deemed it necessary to opt for quasi stable capacity for the Air France-KLM Group in both passenger and cargo. Consequently, over the next three years (2012-2014), the Group will only increase capacity by a little over 5% on a cumulative basis.
This will lead to a shrinkage of the Group’s fleet with an attendant reduction in the investment program, with the exception of spending targeted at the ongoing improvement in operational safety and client service. The investment program will be reduced from over 6 billion euros over the period 2009-2011 to below 5 billion euros for the coming three years. This decision has led the Group to adjust its medium-term fleet plan combining, amongst others, the deferral of aircraft deliveries and the non-exercise of options.
Two billion euros debt reduction by end December 2014
The Board of Directors also considered as a key priority the reduction of the Group’s net debt by two billion euros to some 4.5 billion euros by end December 2014. Over the period 2012-2014, two billion euros in net cash flow will be generated through a combination of immediate actions and a transformation plan.
Immediate cost reduction measures
New cost cutting measures amounting to some one billion euros will be implemented immediately. They include a freeze on general pay rises in 2012 and 2013 at Air France and a policy of wage moderation at KLM. The hiring freeze introduced in September 2011 will also be pursued. Additional productivity measures, a further reduction in overhead costs and network adaptations will complete the measures.
These measures, the components of which have already been fully identified, will be implemented with immediate effect, in compliance with regulations concerning the information or consultation of the Group’s social partners.
Transformation plan
These improvements on their own, however, are not sufficient to guarantee the durable restoration of the Group’s competitive position and financial strength. The Board of Directors therefore decided to implement a transformation plan, encompassing all its businesses, with a target of generating an additional one billion euros in free cash flow over three years.
Improved productivity
The return to a satisfactory level of profitability will require a significant improvement in productivity in all parts of the Group, which will imply the renegotiation of the employment rules contained in the existing collective agreements. Negotiations with the organisations representing the various categories of employees concerned will begin rapidly.
Although the passenger business will be the primary focus with the restructuring of the short- and medium-haul operations, cargo and maintenance will also have to redefine their conditions for profitability.
Break-even of medium-haul within three years
The short and medium-haul network remains indispensable to the Group’s development, assuring not only its presence throughout Europe, but also feeding the long-haul operations of the two hubs, Paris-CDG and Amsterdam.
Since the financial crisis of 2008-2009, the structural decline in unit revenues has led, despite the NEO plan, to deepening losses in this business, estimated at some 700 million euros in 2011. As the financial results of recent quarters demonstrate, the long-haul operations, also subject to increasing competition, cannot alone offset these losses.
To restore the medium-haul business to breakeven, the Group is working on the following structural measures:
better utilization rate of aircraft and assets;
significantly improved productivity in all employee categories;
redefinition of certain activities, potentially leading to more extensive outsourcing in some areas.
******
The Board of Directors considers this progress report has enabled the definition of ambitious but realistic objectives for the three year transformation plan. The implementation of these measures will contribute to reinforcing the Group’s financial position and preserving the current level of liquidity. It will be the subject of regular updates in order to measure its progress.
carnarvon
Jan 12, 12, 11:01 am
[B](...)
To restore the medium-haul business to breakeven, the Group is working on the following structural measures:
better utilization rate of aircraft and assets;
significantly improved productivity in all employee categories;
redefinition of certain activities, potentially leading to more extensive outsourcing in some areas.
(...).
What about meeting with customer panels and ask them what they are expecting and what they would be ready to pay for?
Here are a few things which would sure go towards increasing revenue behind the curtain:
- offer seat reservation for a fee at time of booking
- offer seat reservation with extra leg room for a higher fee at time of reservation
- offer full meal for a fee for a fee at time of booking
NB : all three above are practised at AB and make the travelling experience more enjoyable.
- offer the choice for higher fares in return for higher FB miles earnings (right now, it is either ludicrously expensive full fare or lowest possible fare).
Of course, this would not spare them the efforts of offering better product/service at no extra costs in order to gain market share. :D
@:-) no?
blairvanhorn
Jan 12, 12, 11:53 am
From Le Monde (http://www.lemonde.fr/economie/article/2012/01/12/air-france-annonce-un-plan-d-economie-d-un-milliard-sur-3-ans_1629171_3234.html):
... Pour améliorer sa productivité, Air France va dénoncer les accords collectifs existants et organisant le travail des personnels navigants (pilotes, hôtesses et stewards) et au sol, ce qui aura des conséquences encore inconnues en matière d'emploi.
Mokshu
Jan 12, 12, 12:36 pm
CGT Regional was at AF headquarter with megaphones, flags and all the package, asking for interim people that have been terminated to be hired (CDI) by Air France.
That's a bit lol regarding AF situation.
brunos
Jan 12, 12, 2:51 pm
Nothing good for customers.
More cost-cutting, no investments in longhaul product. Quite different from recent quotes about raising AF to SQ quality.
And a lot of industrial actions in the near future.
San Gottardo
Jan 12, 12, 2:53 pm
From Le Monde (http://www.lemonde.fr/economie/article/2012/01/12/air-france-annonce-un-plan-d-economie-d-un-milliard-sur-3-ans_1629171_3234.html):
Yupee, get ready for some strikes.
San Gottardo
Jan 12, 12, 2:56 pm
CGT Regional was at AF headquarter with megaphones, flags and all the package, asking for interim people that have been terminated to be hired (CDI) by Air France.
That's a bit lol regarding AF situation.
If it was for CGT we`d still be in caves in the bronze age because one of their revendications would have been to stop the decline of the metal industry.
Indeed very LOL.
San Gottardo
Jan 12, 12, 11:05 pm
An interesting article, actually more like a blog (although only in French):
Very pilot-oriented imho.
Nothing about Air France pilots working 620 hours whereas the average is 800 for european majors for example.
brunos
Jan 13, 12, 3:11 am
Very pilot-oriented imho.
Nothing about Air France pilots working 620 hours whereas the average is 800 for european majors for example.
Indeed. the basic message of this blog is that the only way out is for the State to subsidize AF even more.
Mokshu
Jan 13, 12, 3:33 am
My comments (in french sorry) available here :
http://voyageforum.com/v.f?post=4770271#4770271
Airlib
Jan 13, 12, 7:56 am
Notwithstanding the crisitism brought up by former posters, the blogger makes an interesting argument:
When the hub concept was drawn up, its success would be based on the optimisation of transit time, which passengers seek to reduce. Nowadays passengers prefer a lower price than a lower travel time. Middle-Eastern carriers have understood this as their transfer times can reach 7 hours.
This argument is clearly valid for bargain-seekers Y travellers, but these customers do not contribute to the profit margin of the airline. So what about business travellers, have they changed their patterns, prefering price to travel time? Judging by posts of C-travellers on this forum I quite doubt it but it is a pertinent point.
brunos
Jan 13, 12, 9:25 am
My comments (in french sorry) available here :
http://voyageforum.com/v.f?post=4770271#4770271
I fully share your analysis.
tff
Jan 13, 12, 9:30 am
I fully share your analysis.
+1
brunos
Jan 13, 12, 9:50 am
Notwithstanding the crisitism brought up by former posters, the blogger makes an interesting argument:
This argument is clearly valid for bargain-seekers Y travellers, but these customers do not contribute to the profit margin of the airline. So what about business travellers, have they changed their patterns, prefering price to travel time? Judging by posts of C-travellers on this forum I quite doubt it but it is a pertinent point.
I think that the argument developed by the blogger is incoherent. Pax have two choices 1) nonstop at higher price, 2) hubbing somewhere at lower price. If anything, the hub concept has been growing in popularity. Well over 50% of AF Longhaul traffic is hubbing in CDG. Paris is a very small market, AF has no choice but attracting pax from other airports and that can only be done at lower price. All airlines compete on hubbing. IMO the argument that the hub concept is outdated is ridiculous. Indeed, some flights/airlines require a long connection time and gulf airlines are sometimes obliged to include such long connection times due to their geographic position. But if AF does not hub and mostly relies on Paris-point traffic, it might as well close immediately.
Regarding Airlib's interesting question about premium pax: I think that there is a third factor to be included and that is product's quality. When you have a 12+ hours flight to Asia, quality/reliability is a major factor. there is much more differentiation in premium products than in Y. Frankly, when I contemplate 12 hours in AF angled seat (meaning back problems), poor customer service/respect, inconsistent onboard service, potential strikes, mediocre FFP (very few benefits to frequent flyers), etc... I have no problem adding one shorthaul and 3 hours of travel time. That is even if price is equal. And if I can fly BA, CX or SQ at a lower price, then the choice is obvious. Some premium pax are constrained by the company's policy (who can negociate good fares from AF), but many others are not. AF has lost market share on premium traffic not only from pax flying to/from Paris, but also pax who hub somewhere anyhow and can choose another airline to do so (e.g. pax flying from MAN or NCE). Then BA, LX, LH or some US/Asian/Gulf airline prove more attractive in terms of quality/price.
AF faces a huge uphill fight in premium classes, but it is a hopeless fight if they do not have the money to invest in better quality. It is a hopeless fight if they compete on price alone as 1) they have higher cost structure and 2) premium pax are less sensitive to price and more sensitive to quality given the huge money spent anyway.
DHalltheway
Jan 14, 12, 7:11 am
I think that the argument developed by the blogger is incoherent. Pax have two choices 1) nonstop at higher price, 2) hubbing somewhere at lower price. If anything, the hub concept has been growing in popularity. Well over 50% of AF Longhaul traffic is hubbing in CDG. Paris is a very small market, AF has no choice but attracting pax from other airports and that can only be done at lower price. All airlines compete on hubbing. IMO the argument that the hub concept is outdated is ridiculous. Indeed, some flights/airlines require a long connection time and gulf airlines are sometimes obliged to include such long connection times due to their geographic position. But if AF does not hub and mostly relies on Paris-point traffic, it might as well close immediately.
Regarding Airlib's interesting question about premium pax: I think that there is a third factor to be included and that is product's quality. When you have a 12+ hours flight to Asia, quality/reliability is a major factor. there is much more differentiation in premium products than in Y. Frankly, when I contemplate 12 hours in AF angled seat (meaning back problems), poor customer service/respect, inconsistent onboard service, potential strikes, mediocre FFP (very few benefits to frequent flyers), etc... I have no problem adding one shorthaul and 3 hours of travel time. That is even if price is equal. And if I can fly BA, CX or SQ at a lower price, then the choice is obvious. Some premium pax are constrained by the company's policy (who can negociate good fares from AF), but many others are not. AF has lost market share on premium traffic not only from pax flying to/from Paris, but also pax who hub somewhere anyhow and can choose another airline to do so (e.g. pax flying from MAN or NCE). Then BA, LX, LH or some US/Asian/Gulf airline prove more attractive in terms of quality/price.
AF faces a huge uphill fight in premium classes, but it is a hopeless fight if they do not have the money to invest in better quality. It is a hopeless fight if they compete on price alone as 1) they have higher cost structure and 2) premium pax are less sensitive to price and more sensitive to quality given the huge money spent anyway.
+1
I agree fully.
This move also leads me to wonder if KLM's new WBC seat will be put on hold too.
brunos
Jan 14, 12, 12:17 pm
Clearly, the "ambitious plan" differs considerably between AF and KL where only "moderation" in wages is called for. Whether the new WBC will be postponed is another question. But AF has already invested in an "updated" seat, the light-weight NEV4 angled seat. KL has announced its choice for a new flat bed to be installed first on its aging 747s in 2013. AF & KM seem to be diverging on product quality, so it is conceivable that KL will stick with its flat bed plan. Unless the AFKL group runs out of cash....
tff
Jan 14, 12, 3:34 pm
Nothing good for customers.
More cost-cutting, no investments in longhaul product. Quite different from recent quotes about raising AF to SQ quality.
Although that was my first reaction too, I wouldn't be entirely sure that would be the case, as they say (emphasis added):
This will lead to a shrinkage of the Group’s fleet with an attendant reduction in the investment program, with the exception of spending targeted at the ongoing improvement in operational safety and client service.
Rus925
Jan 16, 12, 9:47 pm
AF faces a huge uphill fight in premium classes, but it is a hopeless fight if they do not have the money to invest in better quality. It is a hopeless fight if they compete on price alone as 1) they have higher cost structure and 2) premium pax are less sensitive to price and more sensitive to quality given the huge money spent anyway.
Eh, I'm insensitive to cost within ±15%, regardless of whether I'm flying a NYC-DCA shuttle in one of the lowest economy fare buckets or in paid international business class; within that range the decision falls to quality and schedule, and I'd say I value quality more than schedule. And I think the hard product is much more important than the soft product: AF must transition to flat-bed business class to remain competitive. It also needs to take a cue from it's US partner DL and update its continental fleet's interiors; they are embarrassing. Finally, AF needs to strengthen Flying Blue; it's not very rewarding at all. Most of my Delta flights only earn 25% of miles. And where are OUR SWUs? And how about US domestic lounge access, like Star Alliance has? Flying Blue used to have it with NW; I'm sure they could get it back if they tried.
blairvanhorn
Jan 17, 12, 3:33 am
From Les Echos (http://www.lesechos.fr/entreprises-secteurs/auto-transport/dossier/0201724815624/0201844217670-air-france-levee-de-boucliers-contre-la-remise-en-question-des-billets-a-tarif-reduit-275597.php):
... Parmi les nombreuses mesures du plan d'économies, la suppression d'une catégorie de billets à tarif réduit, le R1 high, est celle qui suscite le plus de réaction chez les personnels et les syndicats d'Air France.
Si le plan d'économies « Transform 2015 » d'Air France-KLM a suscité, dans l'ensemble, des réactions mesurées de la part des syndicats, il est une mesure qui semble cristalliser les oppositions : la suppression du tarif R1 high. A savoir un tarif réduit parmi d'autres, permettant aux personnels d'Air France d'obtenir des sièges réservés sur des vols très demandés, pour moins de 30 % du prix public pratiqué.
Annoncée parmi les mesures d'augmentation de la recette, la suppression du R1 high permettrait, selon la direction, de générer 30 millions d'euros de recettes supplémentaires, en libérant des places pour la clientèle. Peu de chose, en apparence, au regard de plus de 2 milliards d'euros d'économies à réaliser d'ici à 2014. Mais le sujet pourrait bien devenir le premier point d'affrontement entre syndicats et direction. « On ne parle que de ça », indiquait vendredi un responsable syndical, tandis que les premiers tracts appelant à « sauver le tarif R1 high » commençaient à fleurir.
brunos
Jan 17, 12, 8:22 am
30 millions per year is a huge figure and easy to achieve.
it is also a good bargaining tool to obtain other concessions from unions.
florin
Jan 17, 12, 9:51 am
Immediate cost reduction measures
New cost cutting measures amounting to some one billion euros will be implemented immediately. They include a freeze on general pay rises in 2012 and 2013 at Air France and a policy of wage moderation at KLM.
Aha. Screwing the employees. Ok then....
Transformation plan
The Board of Directors therefore decided to implement a transformation plan, encompassing all its businesses, with a target of generating an additional one billion euros in free cash flow over three years.
This sounds very vague. How is a "transformation" going to take place if no investments are made?
Break-even of medium-haul within three years
To restore the medium-haul business to breakeven, the Group is working on the following structural measures:
better utilization rate of aircraft and assets;
significantly improved productivity in all employee categories;
redefinition of certain activities, potentially leading to more extensive outsourcing in some areas.
More outsourcing?! Wow... I can only imagine. Even more clueless and less empowered outstations, capable of doing nothing but scanning BPs. Great for the customer... I can't wait!
IMO the argument that the hub concept is outdated is ridiculous.
I agree.
There are several considerations that I would like to add.
The hub concept is here to stay for a while. CDG needs to be a decent hub though. It majorly stinks. Buses, long taxi times, more buses, lack of signage, more buses, impractical/imbecile architecture, and more importantly - the most awful staff on the planet. They are careless and often rude, and always act is if they're doing every pax a HUGE favor for just being there and hardly doing their job. That's why I avoid CDG like the plague and I know many people who do the same. Offer a more pleasant transfer experience and you stand a better chance.
I agree with brunos - AF is not exactly at the top of the game when it comes to premium services. Lie flats are a must now, and service consistency is huge. (While on the topic of premium pax - people who value their time don't want to spend a ridiculous amount of time in the CDG buses and queuing at all the long and s-l-o-w CDG lines.)
The short and medium haul flights do need some reconsideration. Everybody changed their game and I feel that AF is lagging behind. It's not just the prices - although they really need to abandon the outdated Sat night stay concept - that alone has pushed me to LX on occasion. AF needs to understand that they have THE most uncomfortable seats on their A320 family. Short/medium haul flights on AF are not exactly pleasant. Maybe work on a plan to make these flights more bearable. For premium pax: those who connect to long haul flights get the shaft with crammed seats and inconsistent service. I think those pax deserve better treatment. I think only a few travel O/D on short/medium haul C and those get a pretty poor product. I say drop the price for that product and maybe even get more aggressive with paid UGs, the way KLM upsells their empty EBC seats.
brandkb
Jan 19, 12, 5:48 pm
AF needs to strengthen Flying Blue; it's not very rewarding at all. Most of my Delta flights only earn 25% of miles. And where are OUR SWUs?
Agreed. These are areas where AF fails. Aside from the cost cutting, they need to evaluate their existing products and services and make them 100% functional. What use is the SkyTeam alliance if they're going to make their own rules? The 25% thing is bogus.
SWU's should be a given. Cost-cutting is great but it won't matter unless they can be competitive.
Zembla
Jan 26, 12, 1:19 pm
What I really miss in this plan is a vision on how to attract more paying passengers. This plan is obviously dictated by accountants.
I have never heard of company that became big and hugely profitable because of endless cost savings and cutting back investments. The companies of this world that grow fast and/or sustain considerable profitability are the ones that innovate. The moment the accountants start to dictate the course to stop making losses you have lost that game, imho.
San Gottardo
Jan 28, 12, 1:14 am
What I really miss in this plan is a vision on how to attract more paying passengers. This plan is obviously dictated by accountants.
I have never heard of company that became big and hugely profitable because of endless cost savings and cutting back investments. The companies of this world that grow fast and/or sustain considerable profitability are the ones that innovate. The moment the accountants start to dictate the course to stop making losses you have lost that game, imho.
Extremely well put to the point by Zembla! ^
BTW I met some airline CEOs last night and we chatted informally about the industry and also what they thought about some of the players. No one expected AFKL to wipe itself out but with varying degrees of concern all expected AFKL to go through a prolonged period of turmoil, longer than the company itself anticipates due to some indecisive trial and error of some approaches and strategies. Some also expect rising tensions between KLM and AF. Two quotes were "they are the American Airlines of Europe" and "They've done it to themselves". Still, by the sheer size of the airline and by the capacity reserves of CDG airport they are still a force to reckon with. Note that none of them was in the least familiar with the different product offerings on the market, they only knew about them in terms of "it seems their service has suffered", but everybody knew AFKL's financials
brunos
Jan 28, 12, 1:53 am
What I really miss in this plan is a vision on how to attract more paying passengers. This plan is obviously dictated by accountants.
I have never heard of company that became big and hugely profitable because of endless cost savings and cutting back investments. The companies of this world that grow fast and/or sustain considerable profitability are the ones that innovate. The moment the accountants start to dictate the course to stop making losses you have lost that game, imho.
Spot on!
FD1971
Jan 28, 12, 2:54 am
What I really miss in this plan is a vision on how to attract more paying passengers. This plan is obviously dictated by accountants.
I have never heard of company that became big and hugely profitable because of endless cost savings and cutting back investments. The companies of this world that grow fast and/or sustain considerable profitability are the ones that innovate. The moment the accountants start to dictate the course to stop making losses you have lost that game, imho.
Always sounds nice on paper, however taking a closer look at the really successful companies ( from all industries ) and especially airlines, one has to conclude that all of them became successful due to a rigorous focus on being lean...albeit often combined with innovation.
In the airline industry, most innovations were not really successful and low costs are a must..not only to prosper, but to survive.
It would be ludicrous to advise AF to rely on improving their product without cutting a certain amount of fat...it will probably take 4-5 years for a complete refurbishment of the fleet, 15-20 years to change the attitude of the service personel and billions of Euro to rebuild CDG to become a customer-friendly airport.
Again, it sounds nice on paper, but is impossible to do.
If a take a look of what is still done inhouse and what the competition has done in the last 10 years ( ranging from more or less a complete outsourcing of all ground services like Alaska to less radical approaches like AF/KL's Swissport deal ) one has to conclude that AF is still fat and expensive, which is only partly a result from being incorporated in France ( Kudos to the French approach, as long as they can sustain it ^ )
I fear AF is somehow synonymous for France in general. Some cuts are necessary in the near future and it will become very difficult to force them upon the workforce and French citizen...
History repeats itself nicely in this case and AF faced the same situation already twenty years, when revenues also faltered and nearly killed the airline. Some radical steps were only possible after major labour action and major subsidies by the taxpayer...
Will be interesting to see how the labour force reacts to this 'ambitious plan'
Zembla
Jan 28, 12, 5:53 am
It would be ludicrous to advise AF to rely on improving their product without cutting a certain amount of fat...it will probably take 4-5 years for a complete refurbishment of the fleet, 15-20 years to change the attitude of the service personel and billions of Euro to rebuild CDG to become a customer-friendly airport.
Oh yes. That is very much true. Of course they need to save costs to survive, I don't criticize that. But what I would like to repeat is that the plan is missing an important point: a vision on how to attract more paying passengers. (And especially hi revenue passengers) The plan is clearly dictated by accountants, and there is a lack of vision.
Will be interesting to see how the labour force reacts to this 'ambitious plan'
Let's hope they do not turn it into the same downwards spiral Alitalia had to go through...
brunos
Jan 28, 12, 8:01 am
Some also expect rising tensions between KLM and AF. Two quotes were "they are the American Airlines of Europe" and "They've done it to themselves".
Indeed a spin-off of KL is an alternative that AF must be considering to generate some cash... far-fetched, but...
AA is in reorganization under Chapter 11. AF would probably like to have such a legal framework to extract concessions from unions after two years of big losses (excluding unusual items).
Note the recent article in the IHT:
"Despite everything that has been working against them, from a dismal global economy to rising fuel prices, the nation’s top airlines — United Continental Holdings, Delta Air Lines, US Airways, and Southwest Airlines — all turned a profit last year. "
...
"“If anything, the new year has seen a step-up in business demand,” the US Airways president, Scott Kirby"
I don't think Zembla or anyone else said that AF should forget about cost optimisation and succeed its turnaround solely on the basis of revenue increases. What I understood from his post is that AF will not be able to save its way into performance, it *also* needs to strengthen the top line. Even a cost-optimised Air France will require healthier yields than today to be financially performant. All the suggestions you are making are good as far as we can tell from the outside. But chasing LCC cost structures (not that you suggested that, but i continue your logic) and productivity whilst at the same time having another starting position (not a blank sheet but a legacy of structures, costs and culture) as well as another ambition (hub carrier also targeting premium pax) is doomed to fail.
Also: you are right in pointing out that fundamental changes that will strengthen the revenue generating capacities will take years. But so will fundamental changes affecting the cost side. Quick wins won't suffice and I suspect many of them have already been reaped
Lastly: not sure you mean the same thing by "lean" as everybody else.
johan rebel
Jan 28, 12, 12:22 pm
's interesting question about premium pax: I think that there is a third factor to be included and that is product's quality.I have no problem adding one shorthaul and 3 hours of travel time.Indeed.
I switched my longhaul flights to BA for three reasons:
1. Flatbed seats
2. Better schedule and more flights
3. KL introduced the 777 om my most frequent route, whereas BA uses 744s
I don't mind the extra shorthaul (BA has a pretty decent J product), or the layover. I don't like tight connections, so can and do allow at least 3½ hours between flights if at all possible, and BA's T5 First lounge is just fine. With BA's better schedule I get to my destination faster anyway, and only arrive back later because I opt for a longer layover.
Johan
florin
Jan 30, 12, 5:30 am
It would be ludicrous to advise AF to rely on improving their product without cutting a certain amount of fat...
The idea of trimming the fat is great as long as it is coupled with some investment into improvement. Otherwise it's just short-sighted. Take the best scenario: trim off ALL the fat - fire everyone, sell the assets and everyone gets huge dividends.
15-20 years to change the attitude of the service personel
I disagree. A lobotomy does not take 15-20 years :D On a serious note though, that is NOT the case. With the right tools and investment a turnaround can be achieved in 1-2 years. I have a friend who did that for restaurants in 2 weeks - he'd go in and revamp the service culture and put the restaurant back on track. ADP is huge compared to a restaurant, and the staff are among the most awful on this planet, but it shouldn't take anywhere near 15-20 years.
and billions of Euro to rebuild CDG to become a customer-friendly airport.
AF doesn't own CDG and it wouldn't be funded entirely by AF. It would be a very wise long term investment and if done correctly it might not be in the order of billions. (We're talking over many years anyway.) They can also move some flights to AMS if they can't get CDG to function properly.
I fear AF is somehow synonymous for France in general. Some cuts are necessary in the near future and it will become very difficult to force them upon the workforce and French citizen...
Ah, yes, how I love to hear about CUTS! The reason why they are getting an earful about cuts is because the only cuts they are discussing are screwing the people at the bottom (regular citizens in France / low-level airline employees for AF). Nobody wants to talk about taking money from those individuals and institutions who have it. Austerity has never been successful for countries and short-sighted cost cuts can be immensely detrimental to companies as well.