San Gottardo

There was an article in "Le Figaro" today stating that AF was thinking about phasing out its European C class product "by the beginning of 2010" (I guess they mean start of the summer timetable 2010).

Reason is the dramatic decline in premium passengers.

Article, in French only here.

Surely no surprise, AF's Business over time really turned into one of the worst products in its league, so when times got tougher those few people still spending high $$$ for Business Class wouldn't spend it on Air France's crap product. But then, given that they want to attract premium pax to change at Paris CDG onto the longhaul network, do they really want to put a CPH-CDG-GRU passengers who bought a ticket in Première into seat 32E, in the middle of a school class on its way back home, some pilgrims on their way to Saudi-Arabia plus some well-filled football fans? Even if they manage to reserve some seats up-front in the cabin for those pax continuing on a premium fare longhaul, there's always the risk of 3-3 seating. Not sure how smart that is...

Comments are welcome

Cupart

I, for one, would never fork out for an intra European C seat alone. As a feeder on a long haul I see it as a bonus, but nothing more than that...

This said, I have noticed that on the DUB-CDG route, there are often PAX in the front of the cabin and these are obviously feeder PAX from long haul destinations.

Now, if AF should remove the C service from their European network I guess the company will feel the stinging pain from potential feeder passengers moving over to other companies; but this would not be the first time AF would have done something erratic so not surprised if they actually follow through with it.

brunos

Seems to be more than a rumour as the news has been spread widely. Maybe AF is only testing the waters, but the delay for implementation is short, so I would regard the decision as likely.
AF has had trouble with its European biz product for a long time. It maintained a 3-class configuration which is costly to manage. As opposed to other airlines (e.g. BA), it refused to discount its European biz fare while offering a minimal biz product. Today the fare differential with a typical Y fare is huge and the only real advantage is the guarantee of a free middle seat (yes there is lounge access but anyone paying such fares is likely to be elite+). Seats are convertible Y seats, uncomfortable with miserable pitch and service/food is minimal. Hence demand for European biz is become tiny, and the primary demand comes from pax transferring to longhaul biz. If I were a transfer pax, I would be very unhappy to start and end my journey in 3x3 seating à la LCC. IMO removing European biz and trying to compete with LCCs is not a good idea, as they will lose some European point-to-point pax (to BA, LH, LX,..) who are willing to pay a reasonable premium for better seats and service, as well as plenty of transfer pax.

The question is what is AF gaining by eliminating European biz? it cannot simply be the additional seats: anyway those 2x2 biz seats can be transformed into 3x3 Y seats. So it could be some bargaining with unions in trying to reduce the number of FAs onboard or some other cost-cutting measure.


It is funny to see that BA had tried the move to such an uncomfortable convertible Y seats à la old AF (3x3 with middle seat free) and just reversed to their comfortable wide seats (now 2x2) because of bad market reaction. And European biz fares on BA can be much lower than on AF (except where they compete and AF matches). Eventhough both airlines are engaged in cost-cutting on their European operations they follow opposite strategies regarding biz.

NickB

That's the thing that puzzles me. The adaptation of AF to changes in the market (notably with LCCs) on short/medium-haul has been purely defensive/reactive. There has been no attempt to see whether there were new niche markets worth developing (such as premium leisure flyers), whether it is worth considering making changes to the product to make it more attractive than what competitors offer. All that AF has done has been to reduce service and perks. No creativity, no imagination, no innovation. Just basically the same product as ever, only in a downgraded form.

hfly

So this means that AF is following the Kl Europe Select model. Great. Not.

San Gottardo

In terms of overall product quality Air France is closer to the bottom than BA. Thus, the "way-out-of-the-difficult-situation"-strategy for Air France is towards the bottom - i.e., save on costs and make product poorer to compete with firms that have lower cost structure - whereas for BA it's easier to do towards the top.

Not a smart strategy I think. It's very difficult to have an incoherent offering in ONE class throughout the network (Premiere, Affaires, Eco Plus and Eco on longhaul, and only LCC eco on shorthaul) - rather than downgrading their Y offering and upgrading their F/C offering. That would be more coherent and easier to sell, me thinks.

Surely they have done their market research, but more often than not have managers mis-interpreted the results of market research.

JOUY31

I would find such a move extremely unfortunate and it would probably impact my flying pattern measurably.

orbitmic

Usually, when Air France tries to 'avoir un coup d'avance', it leads to a catastrophe... When KLM replaced their business class by Europe Select, it didn't come with any reduction in fares and with significantly less satisfied premium passengers. As said earlier, AF short haul C is bad enough as it is now not to make it even worse. Of course, if it meant that a LHR-CDG-LAX and return in C went down in price, say from £1800 to £1600, then fine, but somehow, I guess that this won't happen...

johan rebel

Upon which then KL CEO Leo van Wijk told the cabin crew in an article in staff magazine De Wolkenridder to ignore such complaints, because the pax in ES were not the ones paying for the tickets, and only the latter mattered.

Interestingly, KL is now considering abolishing ES, and going single-class only on shorthaul.

Johan

nicolas75

Air France's management has the project to eliminate business class seats on medium-haul flights to increase the capacity of the economy class and face the massive transfer of business travelers to the rear of the aircraft since the beginning of the crisis. This project is in the office of Bruno Matheu, executive vice president in charge of the network. It should be decided in October to an application early in the year 2010 at the time of entry into new flights timetable.

"Nothing is decided yet, said a spokesman for the group. Until today we had a strategy of continuity of service between medium and long-haul flight. Our discussion is whether we can continue on this model. In other words, the European traveler (Berlin or London, for example) who wants to go to U.S. with Air France via Paris, now buys a ticket in business class for its flights. Starting next year, he will perhaps have no other choice but to make his flight to Paris in economy class before flying on a long-haul business class.

This reform will therefore concern only the flights in Europe and not the long-haul flights.

"Be one step ahead"

Air France's short and medium-haul business activity is strongly hit by three phenomena: the economic crisis, of course, but also the TGV competition for short-haul flights, and low-cost companies competition on medium-haul flights. "Our business model is based on economic growth, explains Air France. We need a 4% growth to be able to reduce our unit costs. 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%.

Air France has been studying for one year the opportunity to develop TGV with Veolia. Officially, the project is not abandoned. But it has stalled for several months. For now, no any alliance with a low-cost airline has been announced. There were rumors before the summer of merger between Air France and easyJet. But they have since been disporved. "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."

brunos

Hi Nicolas75,

Could you explain how the elimination of biz will "increase" capacity of economy class? All seats were convertible to Y seats and I dont think that the seat pitch was bigger. I might miss something, so I would be happy to be corrected. Agreed that they were allways bolcking a couple of rows for biz pax, but that is a max of 4 seats lost if they blocked 2 rows. There must be other cost aspects.

San Gottardo

brunos,

what you read isn't nicolas75' opinion, but a translation of the article from Le Figaro (nicolas75, this is the case, isn't it?). Thanks to nicolas to have taken the effort to translate the article ^ (I was too busy and lazy and rather jotted down my own thoughts )

Thus, your question is directed to AF management, or to the journalist who didn't question the marketing bs he was told by AF, or to the journalist who misunderstood.

Maybe what they mean is: by no longer blocking the middle seat, we free up some additional capacity.

nicolas75

Yes indeed

If we make the hypothesis that the business class is empty
and that by no longer blocking the middle seat you get 6 or 8 additional seats (3 or 4 rows as generally observed in medium haul flights) out of 150 seats in a Airbus A320
that makes a 4% or 5.33% potential increase of your turnover (when considering that the medium price of the front seats will be the same as the medium price of the whole plane, which is not the case as it may be superior)
which is not bad in these difficult days.

(It is for the same reason that the French Railways would like to eliminate TGV bar spaces and replace them by seats to get additional turnover)

Richelieu

Removal of European C will also put an end to the heresy that is giving 200% miles on short haul business. Such a customer benefit could not be allowed to stand for long.

JOUY31

S also gives you 200% mileage .