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-   -   AF/KL Investor day presentation - take aways (https://www.flyertalk.com/forum/air-france-klm-other-partners-flying-blue/1994186-af-kl-investor-day-presentation-take-aways.html)

irishguy28 Nov 6, 2019 6:56 am


Originally Posted by NickB (Post 31707339)
I got the impression that the plan was to retire the A380s altogether although I have not checked the timescale for this so there may well be an interim issue.

Anne Rigail hates the A380 and they will all be gone by 2022.

I get the impression if they could get A350s faster, the A380 would be dumped even earlier than that!

24left Nov 6, 2019 7:56 am


Originally Posted by bodory (Post 31706856)
Not at once the word "Skyteam" in the presentation. And the pic on page 8 definitely highlights the JV, not the alliance.

Correct.
FT just doesn't really have an emoji that conveys the intent of my post, which one might call mildly facetious or similar. :D

brunos Nov 6, 2019 9:30 am

t's good to see a thruthful and detailed strategy presentation, rather than the usual half-cooked and biased traditional AF presentation.

Great idea to introduce J on domestic. I got Chinese colleagues who complain about getting into the sardine seating on a Paris-NCE flight after an excellent J longhaul flight. Having domestic J is a must for longhaul transit pax. And I am confident that some PtP pax will pay extra to get the middle seat unoccupied.

Regarding longhaul, I am not sure that AF means to increase the number of J seat per plane.but rather sub several A350s for the existing A380. Also worried about focusing on "premium" rather than J. It might suggest increasing PE rather than J.

Ben Lipsey Nov 6, 2019 1:38 pm


Originally Posted by brunos (Post 31708021)
Also worried about focusing on "premium" rather than J. It might suggest increasing PE rather than J.

Premium = F/J/PY. It should be listed on the slide.

Goldorak Nov 6, 2019 2:04 pm


Originally Posted by San Gottardo (Post 31706892)
One thing was a real eye-opener for me: how the agreed relative growth of AF vs. KL constrained them to put more Y seats and less premium seats on AF planes. Moving to different KPIs (and a couple of other things) now allows them to put more premium seats on AF planes. Maybe that also means more Premiere seats, which would be in line with Ben Smith's point about making the product more difficult to market when it actually offers more destinations and flights.

Same for me. First time I was hearing about this. Interesting...

HalconBCN Nov 7, 2019 2:35 pm

An excellent presentation. The Air France story is encouraging. Obviously some costs are beyond its control but if AF can trim down the domestic network and leverage the strength of its premium offering, profitability will increase. Crucial will be avoiding the strikes that have had such a negative impact on customers, staff and financial results.
The focus on flight completion and operational performance is a no-brainer and will surely pay dividends.
I'm intrigued by the piece on bots rebooking pax in cases of IRROPs. Is that already happening or is there still a human filter there?

On KLM, what most stood out for me was the headcount slide, it's interesting to see how old the workforce is. So many staff have 20 or even 30+ years service. Definitely KLM has an opportunity to hire more younger talent and a more diverse (less white, less European) slate of staff to further make itself relevant globally.

Fabo.sk Nov 8, 2019 8:17 am


Originally Posted by HalconBCN (Post 31712702)
On KLM, what most stood out for me was the headcount slide, it's interesting to see how old the workforce is. So many staff have 20 or even 30+ years service. Definitely KLM has an opportunity to hire more younger talent and a more diverse (less white, less European) slate of staff to further make itself relevant globally.

To me, it was more interesting to see the dip in 6-10 years category. I mean, sure, it was the crisis years, but I don't think KLM did that bad.

Anyway the ground stuff does seem to be quite diverse, especially in less senior roles.

Macaron54 Nov 8, 2019 10:06 am


Originally Posted by Ben Lipsey (Post 31708932)
Premium = F/J/PY. It should be listed on the slide.

Depending on the slide, premium can mean first, business and premium economy (e.g., slide 26), or just first and business (e.g., slide 36). Make no mistake, however. Air France has no intention whatsoever to improve its premium-economy cabin, and the recent negotiations with two of the major purser trade unions point in that direction. The airline appears to have succeeded in obtaining to have one less purser in coach class in exchange of removing the aperitif service, and, thus, one more purser in the business-class cabin. The future of the premium-economy cabin is crystal clear – PAXs will have to endure the abysmal fixed-shell seats until they are eventually deprecated and eat the economy canteen rubbish with wooden cutlery, for the same airfare as that of Delta Premium Select or Virgin Atlantic Premium Economy. At this point, I am perplexed about the attitude of the airline – are the decision-makers stupid, oblivious of the competition, or cynical and thinking they will get away with it? I am even more perplexed when looking at the premium-economy service of Ben Smith's former employer, Canadian Airlines – clearly superior to that of Air France.

caliform Nov 8, 2019 5:46 pm

I think the choices have been made, the market moved to a better product, and AF is not going to consider it necessary at this point in the lifetime of the product to overhaul it. It certainly can't be made better by throwing more staffing at it, so why bother?

Macaron54 Nov 8, 2019 6:14 pm


Originally Posted by caliform (Post 31717090)
I think the choices have been made, the market moved to a better product, and AF is not going to consider it necessary at this point in the lifetime of the product to overhaul it. It certainly can't be made better by throwing more staffing at it, so why bother?

Additional, dedicated staff is, indeed, one variable of the equation. A better seat is another one, and improved catering and service is a third one. It has been the choice of Air France to make its premium economy an excrescence of coach class, with common lavatory, food and pursers, when other airlines have chosen to implement a distinct class of service, neither coach, nor business. You are certainly right – for as long as chumps (like myself :p) keep filling up the cabin, why bother? Special deals throughout the year (round trips from/to ORD for about $1,000) are the reason why Air France's premium economy still exists (not clear, however, whether occasional, non-captive customers try it more than once). Flying Blue pre-April 2018 generous miles accrual scheme with this class of service was another reason. That ship has sailed...

brunos Nov 8, 2019 9:57 pm

The mediocre PE seat is another example of the AF way. They get some great AF idea, find that competition gets better seats but persist rather than accepting their mistake. They believe that AF wonderful brand image and elegant FAs will make up for it.
NEV is another example. They introduced NEV in 2004 while other airlines were introducing flat beds. Instead of accepting that their product was outdated they kept it (with some enhancements) for over a decade, before timidly starting to introduce flat beds.
IMO, the major issue is not increasing the number of premium seats, but filling them with pax. The emphasis on "premium cabin", meaning J+PE, would suggest that AF thinks of increasing the number of PE rather than J. I could be wrong, but until they get flat beds throughout the fleet (scheduled 2022)or later knowing AF), J will be a tough sale.

KLflyerRalph Nov 9, 2019 7:46 am


Originally Posted by Ben Lipsey (Post 31708932)
Premium = F/J/PY. It should be listed on the slide.

Nice to see Ben Smith's chief of staff on the FB forum, following discussions!

brunos Nov 9, 2019 10:58 pm


Originally Posted by KLflyerRalph (Post 31718660)
Nice to see Ben Smith's chief of staff on the FB forum, following discussions!

WOW

Macaron54 Nov 10, 2019 12:01 pm


Originally Posted by KLflyerRalph (Post 31718660)
Nice to see Ben Smith's chief of staff on the FB forum, following discussions!

It is equally instructive to see how premium economy is referred to. While first and business are, respectively, referred to as F and J (as usual), premium economy is called PY instead of W, which underscores how this cabin is viewed by the airline. It is first and foremost an economy cabin, with a bit of extra space, a separation curtain to justify the marketed distinct class of service, and a marginal difference catering wise, with, in principle, an enhanced appetizer and dessert (depending on the route, this difference tends towards zero). That said, I certainly would not blame the current CEO of the Air France-KLM group, who has inherited a crummy product resulting from inept decisions made by people totally disconnected from the rest of the world. As brunos put it nicely, despite the competition having a far better cabin, seat and service wise, they have persisted, CEO after CEO, in lieu of making sensible and timely updates. As also noted by caliform, the airline and its new management probably realized that an overhaul (or, for that matter, the removal of this half-baked product in order to be aligned with KLM) would be too expensive and not worth the effort. In some unfathomable future, when the fixed-shell seats are all broken and unusable, perhaps will they replace them by the same recliners that equip their A350, and (let's be crazy here) perhaps will they assign one purser to the premium-economy cabin, and offer a true premium service, just like at Delta or Virgin. In the meantime, we are all invited to wait patiently and stoically.


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