NickB

I entirely agree that suggestions that AF will soon no longer exist is just as nonsensical hyperbolic stuff. On changes to food, I also agree that one should not overstate the case, either way. I have not seen anybody arguing that the reintroduction of food in ET on band 3 flights on BA was the best thing since sliced bread. But it is undisputably an improvement, even if it is one that Stimpy could not care less about.

You believe wrong.

Basel is a T5 route. In the case of Basel, it is in fact (partly) a move in the other direction: flights which were split between T1 (ex-BD) and T5 (ex-BA) are now consolidated at T5.

Belfast has not moved from T5 to T1: it never was at T5 since BA used not to fly to BHD. It is an ex-BD route which was at T1 and has remained at T1. Ditto with Hanover.

You are correct with respect to DUS, LUX, LYS and TLS. I had mentioned almost all of them in post #106 above (wrongly mentioned BSL instead of LUX in that post, though)

OTOH, SVG and BGO, which are ex-BD routes, have moved in the other direction from T1 to T5. Ditto for AGA (I know that this is not within geographical Europe but it is an ET/CE route).

A number of routes which were flown partly from T1 (ex-BD) and T5 (ex-BA) have now been consolidated in T5 (eg: NCE). Connections from MRS, which used to involve a change of airport from LGW to LHR are now considerably easier following the transfer of the MRS route from LGW to LHR.

For LYS specifically , there has indeed been a shift to T1 but there also has been an increase in the frequency of flights from 3 to 4 daily.

So, as I said, win some, lose some and the net effect is much more balanced than you suggest and can hardly be described as a 'fiasco'.

NickB

[QUOTE=San Gottardo;20012903]1. The LCC business model [etc...]I pretty much agree with all you have to say in there, subject to one commentl

True but an LCC approach implies being systematic about all of these.

I agree that mixing LCC and full service products is problematic. Where I would somewhat depart from you is the relevance of the comparisons you make. The US carriers are what they are for a variety of reasons, many of which have little to do with LCCs. I think that it is extremely difficult to make meaningful comparisons across the Atlantic because of significant differences in the respective markets and where they came to be where they are.
As to IB, SK, etc...: these really are in a different boat to AF: given that they are more dependent on short-haul than the majors, they face the competition of LCCs much more directly than AF/LH/BA and are, to that extent, much more constrained. I do not for one second believe that IB's problem is an LCC mentality permeating the company throughout as a result of offering an LCC-like BoB product on board.
I would agree that there are issues of image/brand dilution, though, which are virtually impossible to avoid once you start to offer an LCC-type product in your range without the cordon sanitaire of a totally separate brand.

San Gottardo

Absolutely, I fully agree with you. The only reason why I was juxtaposing IT costs vs. squeezing in one more row of NEO was to point out that something that AF bragged about having done to reduce costs is actually just smoke and mirrors, because

i) an efficient IT system would have reduced costs more significantly, and without pi==ing of passengers with the discomfort of NEO
ii) the cost per seat offered did indeed go down because you had the same staffing cost per plane, but now more seats. BUT...
iii) ... as anaysis shows these additional seats were sold at a loss

I just wanted to bring that to the awareness of those that always argue that AF needed to do this because the market dictates it, that it's a good thing because it lowers cost, etc. It's not.

Again, I am in full agreement with you that the reasons why various companies have turned part of their offering to an LCC-type offering differ. However, what all of them have in common is that the LCC mentality and way of working is like a metastase and affects also the full service/high price elements of the company. I think it is fair to say that there is no one brand where an LCC-type offering coexists successfully with a renowned high quality offering. So the result is a double negative:

1. You damage the top end of your offering (AF is a perfect example of that)
2. You don't exploit the full opportunities of the bottom end because the legacy of full service prevents your costs from being really low (AF Bases de province is the perfect example for that)

The more I think of it the more I think that it is a bad move by AF. Shareholders should move out

hugolover

I believe it was me who suggested AF would no longer exist, but note I mentioned as its current legal entity. Given their economic outlook and past performance can any of you comfortably say that in 7 years AF will exist as we know it today? Given how she shapes up compared to the rest. Of course, its France and no doubt the Government would find a way to hold her up! And it was a pretty reasonable decision to say I can't reassuringly see a point going for Plat for life. We've seen these crazy directions before. Its funny to see a carrier as big as AF referred to as being like BD with strategy!

NickB

I could not comfortably say of any company, even one which is currently extraordinarily successful, that it will exist "as we know it today" in 7 years.

San Gottardo

Funny indeed. Or sad.

Strategic mis-direction has nothing to do with the size of a company. A coffee shop can have a wrong strategy as can have companies like Kodak, AIG, Peugeot or for that matter Air France. There have been other big airlines that died because of a bad strategy. Remember Swissair? Different strategic errors, but tragic end.

pansted00

You are spot on .

hugolover

But in this case, they are NOT successful and therefore even worse chance. Your statement should be pinned to warn anyone considering any kind of lifetime membership.

I was wondering, the French government own 49% of AF, what are they doing to ensure value for the french taxpayer?

NickB

Your question was whether I thought it would exist "as we know it today". This is unrelated to economic performance. You are as much likely to have considerably transformed yourself if you are a highly successful operation or a lagging one.

If the question is whether AF would still exist, I would have said yes, if only because the airline passenger transport is a market with relatively high entry barriers, where size matters. The full service segment of the market in Europe is dominated by 3 groups around 3 anchor airlines: AF,LH and BA. Is it because these airlines were much better managed than all other European airlines? No. It is because they are the ex-flag carriers of the 3 largest European economies. In that respect, I would depart from San Gottardo and refrain from establishing a parallel between Swissair and Air France. When you are an airline like Swissair, i.e. the flag carrier of a relatively small (albeit prosperous) European country (the size of the Swiss economy is 1/10th of the French one), there is far less room for error than there is if you are AF, BA or LH. After all, BA also did strategic errors which were not entirely unlike Swissair in terms of European expansion (TAT, Deutsche BA...) although not on the same scale.

Swissair, however, was much more fragile. AF, BA and LH can afford to do more mistakes than SR could thanks to their privileged positions.
You would need to get things very wrong for a prolonged period of time to put the company into serious danger, it seems to me. The odds of that happening are, on the whole, pretty low imo. The issue, to me, is less one of disappearance than under-performance.

The fact that KL, LX and IB have joined the major European groups reflects, it seems to me, a realisation that they would struggle to survive on their own. The same is true of AZ, incidentally, and if it weren't for the dysfunctional nature of Italian politics, AZ would have joined the AFKL group a while ago.

I would not bet on the mid to long-term survival of any of the second/third tier European airlines (SK, TP, AZ, VS, etc...) outside one of the 3 major groups. But I would happily bet on the survival of AF, BA and LH.

On the Platinum for life issue, I do not see that at any significantly increased risk than if the airline was currently more successful. Those 'for life' programmes are always a gamble, imo.

JOUY31

Isn't it 15%? And FWIW, the share has gone up since AdJ arrived at AF.

With respect to strategic misdirection, I am not convinced that AF's strategy of having LCC-like fares and services within AF is a poor choice compared with LH's approach of having a separate company. Ultimately, it will be the aggregate result of decisions by customers that will tell whether the approach that has been chosen by each airline is adequate for itself.

hugolover

You tell me or is that your way of doing so? It was just a guess ^^.

hugolover

Air France is not the kind of company I would put in the same leagues as the other carriers. I wouldn't bet my life on it.

Nevertheless happy I took the approach with status that I did. Now I just book the best carrier for my needs, rather than favour status. Except with the relative ease of holding Elite status with a programme in at least one Alliance.

hugolover

Can we overlook the aspect of safety when compared to all the other carriers she competes with? I know, among my leisure travelling friends the safety reputation is in their minds when considering AF.

orbitmic

Indeed. And again, there is the brand image effect that is so important. The fact of the matter is that IB's long haul J class (or EI's or SK's) are not all that bad and SN's and AB's are even good. Yet, they do suffer from passengers seeing them as 'low cost' (or glorified low cost) carriers. All these airlines, one after the other, have continued to claim that they were not low cost but were coming up with a 'third way', a 'hybrid model' or whatever you want to call it. The fact of the matter is that in a (European) competitive environment dominated by two archetypical models - full service and low cost - it is unreasonable to expect passengers to create an idiosynchratic concept 'just for you'. The big conceptual misunderstanding of all these airlines is also to divide the world, as AF, between 'business' and 'leisure' travellers as though people were hermetically contained in one category. The truth of the matter is that the immense majority of business travellers will occasionally fly on the cheapest fares for some trips (either because it is a trip that is short enough that they think they don't care, or because they are taking their family on holiday and are suddenly significantly more cost-conscious) and as it happens, once you experience a legacy airline in its 'low cost' identity, I for one believe that it is extremely hard to get rid of that (subconscious) knowledge when you consider that airline in the future. That knowledge is there and affects what the airline stands for in your mind.

I fully accept the points made by JOUY31 about the risks LH are taking by shelving so many routes and giving them to a low cost subsidiary, but the corrolary of that risk is that, at the same time, they do protect the brand image.

And again, to go back to one of NickB's and San Gottardo's main objection, regardless of what one can think of AF's pricing, in no way, shape or form does it include 'low cost fares'. €49 each way (the best that they can do it seems) happens to be exactly the same price that LH offer on many of their direct (full service) routes, what BA offers on quite a few of theirs (£39 and £44), etc. This is NOT the sort of fares that FR (€10 A.I), U2 (typically €19 or 24 AI) or Vueling or even Air Berlin are capable of waving in your face when they want to attract you on price. Not by a long, long, shot.

stimpy

Good analysis and I agree. As for Plat for life, I will have earned that status before this year is over and I give it a much better than 50% chance of survival for the coming decade. It is just good business and all the marketing people you talk to are very much in favor of Plat for Life. There really isn't any reason they would end FB or Plat for Life even if they continue with financial losses over the next few years.