Originally Posted by
nicolas75
...With this unprecedented crisis, we must change the business model. The opening of the new TGV lines and European high speed projects are all threats to the company. When a TGV line is created, the market share of the aircraft facing the train reduces from 70 to 30%.
So the only to blame are "the crisis" and "the TGV" ?
Regarding the TGV it is not a new phenomenon, and High Speed Lines opening is not really fast. The fist HSL in France has been opened 28 years ago! And the main TGV routes where air traffic was important (London internationally, Marseilles domestically) have been open since more than 10 years!
Regarding the crisis, arguably all European airlines should feel more or less equally its effects.
AF should (but, seeing the analysis they made here, I doubt they are able to do so !) ask themselves: “Did we do something wrong ?" And correct it.
Before the crisis they had decided to get rid of Frequent Flyers in Eco, by reducing the level of comfort on Long-Haul flights (10 abreast 77W), and making the April’s fools changes to Flying Blue.
Unfortunately for them nearly at the same time the number of business travellers flying in Eco has strongly risen, due to the crisis. And AF has not (yet) any Eco + that could accommodate the ex-Business travellers with a reasonable level of comfort.
In addition competitors (especially BA) have been pricing aggressively their own premium classes and probably increased their part of the Long Haul Business market ex-France.
I am not sure removing the Business class on Medium Haul flights will help AF capture connecting passengers that would still be willing to pay for Premium classes, and which are not based in France.
Unfortunately AF does seem to be able to admit that what they are facing may not be only due to external causes, but that some decisions they took are certainly contributing factors (to what extend can be discussed a lot, of course). Do not forget the important mistakes in the fuel hedging strategy, that is also costing a lot to them now: this not at all due to external causes, only a wrong decision by themselves (strangely they do not mention this as a cause of their difficulties...).
They is no way they can compete with LCC, due to their unit (especially staff) costs, and it is not by starting to run TGV, obviously with a marginal traffic at the beginning, that they will change thing a lot.
Originally Posted by
nicolas75
...
"We must hurry," says Air France management, "this crisis is unprecedented and if we want to maintain our leading position, we must always be one step ahead."
I am afraid here, like in many other cases, they have not been a step ahead, but a step behind.
The only credit I will give them for being one step ahead is to be the first European major decreasing the level of comfort in Eco (without reducing the fares !).