orbitmic

... and maybe soon the few remaining transversal routes and so on... It just sounds like yet another one of those AF silly experiments half way between reinventing Air Inter (what a sinister memory...) and its perennial and largely failed attempts in trying to demonstrate that everyone can do low cost, easy, before falling flat on their teeth.

I don't like ORY and don't use it if I can avoid it at all - to me it's a rubbish airport with one of the most idiotic public transport systems you could find in any major European cities "central" airports, but I do know a lot of people like and use it. I also know that the main point of using ORY for the La Navette routes is precisely the shuttle-like flexibility and efficiency, which goes exactly contrary to the philosophy of a low cost airline like HV, so I simply hope that U2 gets a chance to acquire a significant proportion of AF slots at ORY and suspect that if they can increase frequencies on routes like NCE, there will be a number of important corporate contracts changing hands - in my view with good reason.

But then again, this is not surprising (to me at least). As always, AF are chronically incapable of resolving their internal structural and personnel problems so also as always, they then try to circumvent them in the most absurd of ways by shifting routes, brands or service standards as though this would make the problem disappear and sniping whatever seems to be working along the way.

NickB

... but, if what Anne Rigail said in her interview with Les Echos reported above is correct (and I see no reason to assume that she is lying), the kind of clientele for whom that kind of service would be oriented to (namely less price-sensitive business clientele) has melted like snow since 2019. If so, one can see the point of not keeping a service for a clientele that has disappeared in large chunks and replace it with a service which is more aligned with the current clientele. I don't quite understand the deep animosity towards Transavia here (I don't mean you specifically but the Board as a whole). I don't have a particular love for them but I do not find them any worse (or any better for that matter) than Easyjet. To me, whether a flight is operated by Transavia or Easyjet is a matter of supreme indifference.

brunos

Could not have said it better

orbitmic

I agrée with your “if”, but i personally take her framing with a big pinch of salt for multiple reasons (one of them being a reason why I think Ms Rigail and co actually have a motive to be selective with the truth):

- We know that loads are sustained on some routes like ORY-NCE both in and out of season as numbers are public (of course we can’t know route specific yields) so for her assertion to be correct, we’d need both the “snow melting” of the business clientele and symmetric boom in cheap leisure traffic compared to 2019 at the same time. That’s a bit too coincidental for me (we know business travel has not fully recovered from Covid but not snow melting either and worldwide it seems that yields are largely intact suggesting boom in high value leisure travel)

- on some routes like paris-Nice there is still no viable train alternative for business travel (admittedly different in Marseille where tgv is hard to beat on convenience, but to Nice at 6 hours it’s simply not competitive in terms of trip duration let alone for day trips which are impossible). If af are saying there are no corporate contracts worth having on those routes fine but somehow, I doubt they are, and if there were, they would not plan to create all those new cdg-nce rotations in 2026 for cheap low yield traffic

- we don’t know if erosion in flexible business traffic is due to that traffic decreasing or to AF’s own generous provisions on restricted tickets in the Covid and post Covid period - ie companies not actually needing to pay for flexibility till very recently

- we don’t know if erosion in flexible business traffic is due to the traffic in question being lost or it fleeing to the competition (u2)

- to be honest the few times I have had to do those ory flights on either af or u2 they seemed packed with business travellers to me but I’ll accept that’s just anecdotal

- it’s too serendipitous for my taste that af have tried to “fix an ory problem” and whinged about legacy personnel costs and the likes every year or so for the past 20 years furiously and unsuccessfully negotiated for something to change and that miraculously, they have now found that ory traffic was not needed after all. Call me a cynic but I just don’t buy it.

Either way, AF are clearly trying to have their cake and eat it here - vacating ory but passing on their slots to HV to prevent the competition from having a go. I’m no expert on slot rules but I seriously hope that this is not allowed and that AF vacated slots will be up for grabs so u2 or others have a chance bid for them if they so wish. Too often, AF are trying to play the competition line of argument and the public service line at the same time and I don’t think that’s equitable. If they are now finally embracing the “ultra libéralisme” they have complained about for so long then fine, but they can’t expect Le beurre, l’argent du beurre and having some fun with la crémière avec…

NickB

They are not saying that but let us accept for the sake or argument that yields on ORY-NCE are still healthy. That would not necessarily militate on AF keeping a domestic hub at ORY just for one route, would it? And some of that ORY-NCE clientele will presumably turn to CDG-NCE.

The comparison was with pre-covid patterns rather than covid patterns and post-covid pattterns, was it not?

Well, let us accept that, again for the sake of argument. Would that not militate also in favour of switching to Transavia rather than sticking to the AF model? If AF are losing market share to U2 on ORY-NCE, this suggests that their current approach to that market is not working and having the route taken over by a subsidiary of the group with lower costs might be more appropriate.

Well, if it weren't allowed, there would never have been a market for slots at LHR or pretty much anywhere else in Europe. Moreover, the Slot Regulation explicitly allows for slots to be freely swapped between companies within the same group so this is a kind of slot transfer that is whiter than white under the current regulatory system. What AF are proposing to do with slots is no different to what all European carriers are doing when swapping slots between different legal entities/airlines within the same group. They are no more having their cake and eating it than anybody else.

orbitmic

Agree on the first point (might be two routes if it also works on ORY-TLS which I don't know enough about - not necessarily on the second (or I do technically in the sense of "some", but certainly not if it is supposed to imply most. If a company prefers to fly to/from ORY it would seem to me a pretty bold gamble to assume that they will move to CDG instead just to stick to AF, some will, but most might not.

Wrong focus (from the point of view of my point). The issue was not about what was included in the "before" but what is included in the "now" that Ms Rigail is refering to. Remember that tickets could be fully refunded and later replaced by a voucher for the full value for all tickets booked until the end of June 2022, it's only after that that conditions became stricter than that. I find it unlikely that AF would base such a big decision on data covering just 1 year - in fact, if they did, I think that would be a pretty dumb thing to do. However I don't think it is the case, because some of the pointers mentioned by the AF leadership clearly refer to "now" as 2022, and thus it includes time when buying flex was frankly a waste of money for companies and also when many companies were still in late covid management mode.

I disagree. This assumes that all low cost airlines were created equal and that in that sense, U2 is much closer to HV than to AF. I do not share that vision at all. I think that for years, U2 has gone to great lengths to reclaim a share of the business travel from European majors (including AF). They have done that by taking a number of business-friendly measures. For instance, if you are an "Easyjet Pus" customer, you can take an earlier return flight than the one you were booked on for free and the same if you book a "Flexi" fare. There is no equivalent with Transavia. Even with their most expensive "Max" and "Plus" fares, you still need to pay any difference in fare (even though they have no change fee) and status will give you exactly zero additional flexibility on HV. So from my point of view, in terms of "business profile", U2 is a lot closer to AF (arguably better in some ways though AF has far more frequencies on La Navette routes) than HV (arguably better in every way), and for that reason I personally disagree with your point above.

Yes indeed, most sadly. Having said that, there is another way: one of the things that AF has always been very poor at has been to take things they don't do well themselves, dump it on some low cost subsidiary which doesn't really want it or does not want it that way thinking they know exactly what the low cost guys need and can do, and then look at the disaster unfolding slowly. I'm reasonably confident that if AF expect HV to use up all the frequencies that AF has been having with the HV model, this will be a disaster and HV will bleed cash. As a result, they will want to reduce frequencies and therefore stop using some slots and sooner or later they will need to be reallocated as at any rate, i believe that after a period of relative leniency, the powers to be are becoming tougher on airlines wanting to keep slots that they are not using. When they do, I suspect U2 and maybe some others will be there to pick things up. So it may take a bit of time, but whilst this is just my intuition and not something I can prove, I would suspect that within 5 years from AF deserting ORY, the AF group will have lost a significant part of their ORY slots to other airlines regardless of whatever watertight plans they think they are having, so that ORY will become more of an LGW in the foot of AF's own version of LHR (CDG), except that in the Parisian case, a lot of people (not me) find ORY more convenient...

Nico40

I wouldn't be totally surprised if within a few months, the government announced a reduction of the ORY annual 250 000 flights capping by 2026 - let's say 200 000 or so. Look, we care about ecological transition and are ready to take measures (especially where not changing anything to the picture and/or where it's at the expense of a foreign company). Just my two cents...

orbitmic

Very possible, but if so, it would only serve to reinforce the frequent suspicions that the French state is acting in systematically biased ways when it comes to AF vs competition, and that the victims of such interference invariably end up being the customers.

brunos

Just offering some support in favor of U2.
I have used them quite a few times on ORY-NCE, although less than AF because they don't offer the flexible and decent pricing for seniors.

I only fly J/F on longhaul (even mostly J on regional Asia). Just to point out that quality matters to me.
I would rate U2 product on par or better than AF on that route. Their seat is far better for my back than AF. If you pay, you can get a lot of benefits and I have to pay for good seats on AF anyway, as I don't have status anymore. My only experience with HV has been bad.

A major question is what type of pricing and fare conditions will HV adopt on these flights. WIll it be typical HV conditions or will they adopt something similar to what exist now, just moving to HV plane and staff?
I understand that the choice might not be quite the same for different pax with status or not, etc... But I rate U2 quite high.

PS: Funny that AF kept mocking U2 for boarding half the pax by back stairs Now AF has the same tactic.

orbitmic

I sort of like U2 too. I think that they have found their niche. My point was primarily about offering flexibility at a level which is unusual for low costs (and which could be critical if U2 offered more rotations on routes like NCE-ORY (at the moment, they "only" offer 7 daily rotations on NCE-ORY, plus 3 on NCE-CDG and one to Beauvais, whatever the airport code of that ghastly airport might be! If they could move up to 10-12 daily to ORY I think that could make a major difference) because I think that the business segment is a key one here, but I also agree with you on comfort, timeliness (in my experience better than AF) and the rest. I haven't got the Easyjet plus card but know quite a few people who do and they are actually very happy with it and I can imagine more people feeling that U2 + Easyjetplus card might be a good strategy if they fly NCE-ORY even once a month and AF vacate.

I've only flown HV 3 times. I wouldn't say that i had "bad" experiences but it was really standard low cost experience and pretty messy, more similar to Wizz or Ryanair than U2. Given the choice, I'd pick U2 over HV every time even on fares where HV gives me XP, miles and so on, indeed, I have done in the few cases when those were the two options. (I should add it's not only about HV, I similarly much prefer U2 to VY and choose U2 again when those two are my choices).

I also agree with your other point that domestically, AF have built quite a bit of their strength on their "abonnements" and my intuition is that when they desert ORY, that particular advantage will be diminished significantly too.

As you say, one could imagine a case in which HV would start changing their model to offer more of a shuttle service with more flexible options etc, but to be honest, personally, I don't really trust that to be the case. I think that AF (and BA and LH for that matter) tend to adopt an exceedingly manichean vision of passengers as being either "all about price" and ready to accept the sh*ttiest of low cost services to pay a low price or "all about convenience" and ready to pay absurd prices to fly their legacy services in flexible ways. Unsurprisingly, I think that passengers are more complex than that and also that their preferences vary across trips (I don't have the same needs and priorities on a long haul trip or a short haul, a nonstop and an indirect, etc), circumstances (I don't have the same needs and priorities if I fly alone or with partner or with family etc) and will often make complex arbitrations using multiple criteria.

On that front my sense is that one of the things U2 often wins on is not so much price as convenience (not least because they offer a lot of nonstop routes from regional airports which AF doesn't) and also because they usually fly to main airports (unlike most of the FR network which has some main airports but more remote ones). In that sense, my personal sense is that it is potentially dangerous for AF to let U2 further beef up that argument by being able to claim that they are the one flying to the more convenient airport in Paris and it is worth noting that in the US, Southwest built much of its success by targeting city centre airports which major airlines had deserted (e.g. MDW in Chicago, HOU in Houston, etc). Their success has never receded since, and my personal sense is that AF will be handing a golden gift to U2 here, but obviously, that's only my thought and if others feel that AF are doing the clever thing here, I certainly have no way to prove otherwise for now.

NickB

I don't think that there is anything in what I wrote to suggest most. I used the word "some". If I had meant "most", I would have said "most". I have no idea what proportion of the current ORY-NCE traffic would switch to CDG-NCE. But equally I would not assume that "most might not". This will depend on a number of factors of which I am not privy and do not feel that I am in a position to evaluate


This is not what joyu12 suggests in post #100 (the original article is behind a paywall).

(emphasis added)

Gosh, there seems to be more assumptions in this paragraph than in an article in an academic journal on classical economic theory : it seems to assume that the role of HV is to recapture the business clientele that AF has lost since 2019; that AF's business clientele and U2's business clientele have the same profile; that HV's commercial policy is immutable; that HV will never conclude corporate contracts given more flexibility than public fares; that the business clientele should be and will be the primary target of HV; etc...

I don't know any of this so I will try to refrain from making too many assumptions but, if I were to hazard a guess, I suspect that AF's strategy with HV is not to (re-)capture the business market away from U2 but rather to have better adequation between costs and revenue with a clientele which is increasingly leisure-oriented and, in any event, more cost-sensitive than before, something that it believes is not possible with AF mainline. This may or may not work. I don't know. I don't have access to data that would enable me to make an informed judgment on that. But, from my position of relative ignorance, this does not strike me as laughably implausible and I would be tempted to wait and see before passing judgment.

orbitmic

Then I do agree, "some" will move, but I don't think that does much to point to whether the move will be beneficial or costly

We are a bit going round in circle on this one - The change has now been amply discussed in the French media and again, the reference to 2019 is irrelevant here - the question is not about what is included in "before" but what is included "now". The infographics I have seen, for instance (on the France 2 TV news this morning) and which were undoubtedly provided by AF explicitly compared the number of flexible returns purchased in 2022 as compared to 2019. Again, my problem is with 2022, not 2019 which is a perfectly logical initial point of comparison.

Not really, it just assumes (if that is an assumption in your view) that AF is currently competing with U2 on the ORY-NCE route, and that from 2026, it will be HV competing with U2 on that specific route instead.

It then hypothesises that in my view, HV will be much less well placed than AF when it comes to capturing the lucrative business travel segment on that route and explains why I hypothesise that. Of course, the hypothesis can only be tested after 2026 (like any of the other claims any of us makes in this thread including the suggestion that HV is more in adequation to the passengers' profile on this route, which, it seems to me, is just as hypothetical a claim as mine that there is still a significant part of the route clientele which is business oriented).

The point you quote was answering your suggestion that: "Would that not militate also in favour of switching to Transavia rather than sticking to the AF model? If AF are losing market share to U2 on ORY-NCE, this suggests that their current approach to that market is not working and having the route taken over by a subsidiary of the group with lower costs might be more appropriate.". The reason I compared U2 vs HV in the paragraph you quote was to explain why no, I don't think that my earlier point on the state of the competition between AF and U2 suggests that HV would be a better fit/strategy to the existing market. You may well think that it is and that HV are right for the route, any opinion is fine, but I disagree that what I described about the state of the AF-U2 comparison today supports that suggestion.

I would add that incidentally, if the rationale of all of this was that AF felt that the HV would be a great fit for the NCE-ORY market, there would have been absolutely nothing preventing them from donating some of their slots to HV already (in fact, I believe that AF still has some unused slots at ORY so HV could even have decided to fly a couple of HV ORY-NCE each day and see how it worked to test their model without impeding AF operations at all). HV opens plenty of routes each year, and this does not seem to be one they have chosen to open however. So it seems to me that the logic AF is following here is not that they are leaving ORY because they think HV would be great for those routes but that AF are leaving ORY because they want to leave ORY.

VicM1

Hello everyone, was reading the thread and I agree with Nick. There are lots of assumptions here and when reading some of you it looks like you know better how to operate an airline than anyone else (Maybe a Michael O'Leary is hidden behind one of these pseudo )
Lots of your remarks are solely based on market evolutions, but don't take into consideration the operating costs of keeping some AF flights in Orly, with AF employees, when you can reduce those AF costs by moving them to CDG and operate the same flights (or probably at least the same slots for different destinations) with TO in Orly with Alyzia employees (TO's subcontractor in Orly).

With a growing number of planes thanks to the coming deliveries of A320 neo, my assumption is that TO will gradually replace AF flights on the coming months, slot after slot, and will soon have a much better comparative advantage to U2 who is based at the same time in ORY and CDG. The extension of line 14 and the nicer Orly 3 terminal, will also be elements to take into consideration for parisians when choosing between TO, U2 and other airlines.

Finally, just for some clarity and precision, HV doesn't technically exist in Orly as HV stands for Transavia Holland. When talking about Transavia in France, the acronym should be TO.

joyu12

I agree that it's not the best airport in the world (I prefer CDG but getting there from Paris center is hellish for an evening departure), and its definitely one of those silly AF experiments that can end horribly for them. Parisians just seem to have this bond with ORY and I agree, if U2 gets more slots they will get a number of corporate contracts to go with them as well.

San Gottardo

I did some digging but could not find a sufficiently detailed or comprehensive set of numbers that would have enriched this debate. Trajectory of TO in terms of growth, cost, profitability, compared to AF on the domestic network, etc.

From an armchair CEO perspective - which is what we are given the lack of any data and other information we can base our opinions on - this simply looks like the AF variant of what BA have done (I think) around 2007, and what Lufthansa has done in the mid-2010s: concentrate the network of the legacy carrier on those hubs where they can generate transfer traffic flows, and using a sub-brand/legal entity for non-hub routes and more leisure-oriented routes. For BA, that meant stopping intra-UK flights and a focus on LHR, with LGW now being the home for their lower cost subsidiary (I forgot the name) and for longhaul flights to leisure destinations. Lufthansa has created Germanwings/Eurowings for routes other than FRA/MUC. Of course there are differences: the BA product from LGW still is marketed as British Airways, Eurowings has kept many of the elements of the Lufthansa legacy airline (total integration into the FFP, a premium/Business class, status benefits). But the idea was the same: move the non-hub routes to a lower cost platform. The Air France approach might be a bit more radical should they decide to move things to the current-state-TO which is much more an LCC than LGW-BA or EW, but as pointed out above I think by NickB nowhere does it say that TO cannot evolve its value proposition and positioning as well. Anne Rigail seems to have hinted at that. With this, I am largely aligned to NickB‘s line of argument that it‘s totally understandable that AF wants to move this business to an operating platform that has lower costs. Where I agree with orbitmic is that AF often has ideas which might make sense on the face of it - but then execute poorly and create a SNAFU, which eventually hurts them rather than improves performance. Although I understand that Transavia overall is on a positive trajectory. Operating costs are 25% below AFKL mainline (that is something I could find in the numbers!)