Air France announced on Thursday to launch a new carrier, an hybrid airline which would be a compromise between a full-service and a low cost carrier. The decision has been taken as the French national carrier struggles to be profitable on short/medium haul routes as well as some long-haul destinations.
On its short/medium-haul destinations, Air France is in competition with European budget airlines; on long-haul destinations, it increasingly faces ferocious competition from Gulf carriers to Africa and Asia or North American airlines to America.
New Air France-KLM Chief Executive Jean-Marc Janaillac announced then the next (and only) logical move for a carrier with global ambitions: to create a lower cost unit, which would complement the traditional carrier. The new airline will fly medium and long-haul destinations offering a high quality but simplified service. Its code name (for now) is “Project Boost”.
It is due to take off in winter 2017. The first step will be European/African destinations with long-haul destinations being added from summer 2018. And it seems that Asia will be among the first long-haul destinations.
Air France is in fact struggling to maintain its network in South Asia (India) and Southeast Asia. While Singapore is a high yield market, destinations such as Bangkok, Jakarta, Kuala Lumpur or Vietnam all generate healthy passengers’ numbers… however flying at low yields. In the last three years, Air France already withdrew from Phnom Penh, Kuala Lumpur and Jakarta.
An hybrid carrier such as Eurowings (Lufthansa) or Scoot (Singapore Airlines) would certainly help the airline maintaining its presence across the continent and enjoy the benefit of rising travelling middle classes in the region. In Europe, four airlines can be considered as long-haul low cost carriers: Eurowings (Germany), French Blue, Norwegian (Norway) and Pegasus (Turkey). Existing companies in Asia are AirAsia X, Cebu Pacific, Jetstar and Scoot.