brunos

Nicolas, I was just asking for your expert advice, not implying anything else. Similar reports/interviews appeared in numerous media including the Wall Street Journal.

But I still cannot get the "capacity" argument. We all know that to transform the 4 C seats into six Y seats it takes a few seconds (push on the button under the armrest and move the armrest, then move the middle table up). I do it all the time on domestic flight when middle seat is empty. So if there are no C pax, they can easily sit 6 Y pax per front row. I understand that there is a flexibility cost in terms of keeping a couple of C seats in case a C pax shows up at the last minute; but a C pax pays some 4 or 5 times what a typical Y pax pays. Catering can be loaded at the last minute ex-Paris. But maybe the whole thing is too complicated to manage.
As other said, my guess is that AF is willing to sacrifice the revenue of the few remaining Europe-France C pax, as there are currently very few left with 1) the crisis and competition, 2) AF huge European C prices, 3) AF minimalist product. But there is a large number of longhaul transfer J pax, and I assume that AF believes that they will fly AF anyhow and that the removal of European C will simply translate in cost-cutting. This might be where the major saving might comes from. Over the short run that is probably true. Over the medium term when transfer pax realize the downgrade??? With a below-average longhaul biz product and Y connecting flight, the only option for AF will be to compete on price, price, price. It is a business choice and that might be the right decision. Of course, it is a bit surprising given that AF (and France) is a high-cost country.

Richelieu

Maybe they're guessing that feeder pax are already not enticed to choose AF because of the business feeder flight. If everyone expects nothing with regard to the hard product (seat blocking can still be enforced in the booking engine, catering is already nothing to write home about, the seats are exactly the same...), maybe they figure they won't lose anybody by removing the product altogether. They might lose some of the very few customers still flying direct C flight, but it may not be much compared to the cost of marketing an intra-Europe business class product and managing the associated catering.

NickB

I also suspect that they think that they will not lose a significant number of those direct intra-European flight C pax anyway, as they probably consider (and probably rightly) that for the majority of them, convenience and frequency of schedule are more important than catering and extra space in-flight. Presumably, the majority of them are Paris-based and they will therefore tend to privilege AF just for the convenience of schedules even if it means flying Y, especially if the TC challenge cabin is maintained. They might lose the odd one out but not enough for it to make a difference. Question is, though, whether the disappearance of C would also have implication on catering for TC.

TGV

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.

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 !).

graraps

...as the enhanced C catering on European 'breakfast' flights means I'm already avoiding AF not only for intra-Europe C (which I would never pay for anyway, at least at AF prices), but also for longhaul connections. If I can help it, I'm not even spending my miles on them! This is a sure-fire way for others to join me in said 'soft boycottage'!

FD1971

Really ? Why ?

The competition will certainly follow asap....so your alternatives are close to zero anyway...

Lufthansa is also debating this issue since months...combination of both declining demand and massively increased productivity. KLM, being a true innovator once again saw the signs and acted years ahead of the competition...

They will certainly block the first rows of the plane for premium pax and still try to block the middle seat etc. , however it is not guaranteed anymore and the service will very likely be the same for all rows of the bus, at least down the road, maybe not in the beginning ( interesting to see how desperate they are...)

One could certainly argue that AF, once again, cuts back on service items instead of looking into its organisational structure and wage schemes to become ready for the next decade...one could conclude that a French management style has finally taken over the whole company.

nomad1974

So will it be Y+ and Y or all Y?! I've always found it odd that AF insisted on having "3" classes of service intra-Europe. The difference between them (on board) was minimal anyway. Maybe they are simply trying to rationalise this?

hfly

FD1971, I hope your post is tongue in cheek, because the way that I and others looka t it, it is quite the opposite........5-6 years ago KL was getting 30-40 flights a year from me, all in Business class (ok, maybe 98%), probably a 50/50 mix of long and short haul. This year they have gotten NONE, last year they got maybe 4. The economy may have tanked, but guess what I am flying as much if not more than ever, just AF/KL have managed to piss me off to the extent that they are getting very little of my business.

NickB

Ah... you mean like the competition followed on laminating FB, perhaps?

What makes so sure of this?

QF Lad

I have been a long time lurker on the AF board, having always had an admiration for all things french.

I have never been able to fathom how Qantas has an excellent, expensive business class product for its internal flights within Australia (ranging in duration from approx 1 hr to 4 hours), and yet this doesn't seem to be replicated within Europe. QF J fares are generally 5-6 times the cheapest economy fares on any given flight, and there are no (or very few) discounts, except for corporate and Oneworld product fares. BA have a cheaper and less august European business class product (in comparison with Qantas) with its CE. and I have never understood how if QF can offer a good, profitable product out of Sydney and Melbourne, how BA couldn't offer a quality, profitable product out of London.

And to read now that AF are looking to abolish their C product. Surely there must be a market for this product out of Paris?

And it does make the AF product less attractive for long haul transfers within Europe, especially when competing with LX/LH/BA.

nomad1974

QF has a (virtual) monopoly on its domestic services.

Rambuster

How high is the percentage of feeder traffic onto/from longhaul C or F flights ?
If most of the AF premium traffic is O&D then the impact will be small ... but I doubt it!

brunos

Percentage of longhaul pax that dont originate in/to Paris is never officially mentioned (at least by class) but it is likely to be over 50%. I vaguely remember M Spinetta mentioning over 60% of transfer traffic to South America when signing the GOL agreement in April. Anyone having stats for premium cabins?

FD1971

The two biggest international airlines in the world discuss the issue since months now amid a time where improvements on the revenue side are more or less impossible to realise.

Demand in Y is pretty solid though. Several industry experts expect the trend that the percentage of tix booked in non premium/non flexible booking classes will increase continuously.

The competition is producing significantly cheaper and realises economies of scale flying all eco planes...Lufthansa already realised a comparable effect increasing the number of seats per flight on several routes to reduce the cost per available seat kilometer

Pilot unions at all major airlines still do not accept the obvious fact that feeder traffic within Europe has to be produced as cheap as possible, so hardly any chance on this front as well...

Swiss tested the waters on some routes, KLM tested the waters on even more routes, results were amazing...

KLM did not even realise a significant drop in customer satisfaction after introducing a 3+3 seating years ago, but was able to grow significantly ( also in terms of margins ) KLM was also able to counter the drop in yields on several bread and butter routes to/from Schiphol, because they increased productivity...

Customer will not have a choice anyway, because it will become a joint approach by all major airlines.

justcallmedoc

I agree with Richelieu. After all, CDG-NCE-CDG flights have always been feeder flights and I was surprised to see the C class disappear a few years ago at a time when only the CDG flights kept a C class for domestic flights. Now, these flights are full most of the time, so I guess they don't expect a huge drop in the number of pax by doing it at European level. See, we lost the duty free shopping, now we'll lose the European C class...

After all, there are probably way too many high contribution passengers in this forum to express a "true life" view...