Category Archives: Air France

Air France to reduce its domestic network

Hop! For Air France Bombardier CRJ700 (CL-600-2C10) F-GRZN (msn 10264) AMS (Ton Storck). Image: 939600.

Air France is planning to cut back its domestic network as a result of stiff competition. The company will reduce its short-haul capacity by 15% by the end of 2021 which could lead to a reduction of up to 465 positions. Here is the full announcement about its French domestic system:

At the Central Social and Economic Works Council (CSEC) held on May 13, strategic guidelines for the company were presented and discussed, as well as their implications in terms of jobs and skills management planning (GPEC): to improve operational performance, offer the highest level of product quality and service to customers, as well as to restore Air France’s competitiveness, including adapting its short-haul activity. The entire company and its employees have been striving for years to ensure that the company adapts to market conditions and the extremely fierce competition in the sector.

Increased competition from the TGV

Over the past five years, Air France’s domestic network has been strongly affected by competition from high-speed train routes, which have increased their capacity throughout the country, reduced journey times and developed a very competitive low-cost offer. The French authorities have ensured that train travel has expanded over the years and has become Air France’s main rival on the domestic network, departing from Paris airports or the French regions, without being subject to taxes or charges that directly target air transport,. The launch of four new high-speed routes in 2016 and 2017 is expected to attract 4.7 million additional passengers by 2020(1) and on routes where high-speed trains connect Paris to the provinces in under two hours, Air France has lost 90% of its market share.

 

The rapid development of low-cost airlines

As well, in recent years low-cost airlines have set up bases at major airports and have gained ground rapidly with aggressive pricing policies and often with the help of public authorities. Unlike Air France, where 90% of staff are based in France, a majority of these airlines have not contributed to developing employment in the regions where they operate, taking advantage of European mobility and basing employees in jurisdictions with lower labour costs.

 

Air France teams have launched several initiatives

Faced with this tenuous situation, Air France teams have fortunately been able to adapt to an increasingly difficult environment. They are behind many innovative commercial initiatives that have improved our offer to meet customer expectations in terms of flight schedules, customer experience, and punctuality, and have enabled us to maintain a 65% market share in the domestic market. However, on some routes the revenue decline could not have been prevented, nor unit costs reduced. As a result, Air France’s financial situation has deteriorated significantly on its domestic network, and in 2018 it posted a loss of €189 million, a sharp decrease compared to 2017 (€96 million). Since 2013, cumulative losses have amounted to €717 million.

Photo: Hop! Air France is phasing out the Hop! brand.

No forced departures

Air France’s jobs and skills management planning (GPEC) for the 2019-2021 period reveals important hiring requirements in numerous sectors of the company, but also overstaffing in the short-haul ground operations activities. Air France also plans to reduce its short-haul capacity in terms of available seat-km (ASK) by 15% by the end of 2021.

Employee union representatives have thus been informed of a planned voluntary departures plan that could concern up to 465 jobs on the domestic network, carried out over a one-year period. This plan will shortly be the subject of a consultation with relevant stakeholders.

There will be no forced departures. This project includes personalized support measures for the staff concerned. The measures will be detailed and negotiated with the labour groups during the consultation.

“Many new talented staff – pilots, flight attendants, mechanics and engineers – will join us in 2019,” said Anne Rigail, CEO of Air France, “to support Air France’s growth, but we also have the responsibility to guarantee an even balance of our activities in certain sectors to secure their long-term viability. This is the idea behind the project presented for the short-haul sector today. We will conduct the consultation process with our labour groups as part of an open and transparent dialogue, and we are committed to supporting all staff who wish to move to a new position or develop their career”

“The French domestic network is intricately linked to the history of Air France,” said Benjamin Smith, CEO of Air France-KLM Group. “It guarantees its regional base, and connects the French regions to the rest of the world by offering several thousand daily connection opportunities. In a highly competitive marketplace, we are all fully engaged in defending a domestic market that is vital for Air France and also more globally for the Air France-KLM Group.”

 

[1] Report on the future of rail transport – February 15, 2018

Top Copyright Photo: Hop! For Air France Bombardier CRJ700 (CL-600-2C10) F-GRZN (msn 10264) AMS (Ton Storck). Image: 939600.

Hop! aircraft slide show:

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The search for Air France Airbus A380 engine parts in Greenland

On September 30, 2017 an Air France Air France Airbus A380 (F-HPJE) experienced an uncontained engine failure over Greenland.

BEA France released this technical report on the search efforts in Greenland to locate the engine parts of the uncontained engine failure:

Following the accident to the Airbus A380, registered F-HPJE, during cruise over Greenland on September 30, 2017, the Danish Accident Investigation Board (AIB D) delegated the opening and carrying out of the safety investigation to the BEA. The BEA represents France, State of Operator, State of Registry and State of Design of the aircraft. Investigators from AIB D, representing Greenland (autonomous constituent country of the Kingdom of Denmark), State of Occurrence, from NTSB, representing the United States of America, State of Engine Manufacturers, and BST-TSB, representing Canada, State where the flight crew diverted, took part in this safety investigation.

Four BEA investigators travelled to Goose Bay on Sunday, October 1, accompanied by technical advisors from Airbus and Air France. NTSB investigators, accompanied by technical advisors from the engine manufacturer Engine Alliance (which is a Joint Venture between General Electric and Pratt & Whitney), as well as TSB investigators, also travelled to the site.

A fifth BEA investigator travelled to Ottawa to attend the first read-out of the Cockpit Voice Recorder (CVR) and Flight Data Recorder (FDR).

The Airbus A380-800, operated by Air France, was performing a flight from Paris (France) to Los Angeles (United States of America) under the call-sign AF066. It had taken off from Paris Charles de Gaulle Airport on Saturday, September 30, 2017 around 09:30 (UTC), with 497 passengers and 24 crew members on board. Following a failure on the N° 4 engine while the plane was climbing to FL370, the flight crew diverted to Goose Bay Airport (Canada), where they landed at 15:42 (UTC) without any further incident.

Damage to the aircraft was confined to the N° 4 engine and its immediate surroundings. A visual check of the engine had shown that the fan, first rotating assembly at the front of the engine, had shown that the fan, first rotating assembly at the front of the engine, along with the air inlet and fan case, had separated in flight.

The data contained in the flight data recorder (FDR) was used to determine the aircraft track and the aircraft position when the failure of the N° 4 engine occurred and to demarcate a search area to find the parts which had separated from the aircraft.

This area turned out to be a wasteland covered with ice, situated about 150 km southeast of the city of Paamiut located on the west coast of Greenland.

The BEA got in contact with its Danish counterpart immediately after the accident to perform a visual search and recovery of these parts.

Quite early in the investigation, it was established that the recovery of the missing parts, especially of the fan hub fragments, was the key to supporting the investigation of the cause of the engine failure.

Search and recovery operations of the fallen parts were expected to be very challenging. The area is remote and weather conditions are extreme most of the year. Soon after the event, some parts were visually spotted and recovered but snowfalls prevented further helicopter flights to the site again. Snow finally covered all the parts that were still lying on the ground, preventing any new visual detection.

Other means of detection then had to be evaluated. These means had to be compatible with the particular conditions of this area, and all their subsequent operational constraints.

It was not possible to go to this region during the winter, as the safety level (cold temperature, short daylight, changing weather, presence of crevasses, etc.) was deemed not sufficient. Therefore, the closest time slot for considering search and recovery operations was Spring 2018.

After a capabilities prospection phase, it was decided to setup two consecutive operations:

  • ˆ  an aerial campaign, consisting in the use of synthetic aperture radars operated from an airplane, to try to detect and locate the missing parts on the ice sheet under the snow layer;
  • ˆ  a ground campaign, consisting in recovering the parts previously located during the aerial campaign, or in performing a systematic search with help of ground penetrating radars in case the aerial phase was unsuccessful.

    To face these challenges, a sub-group dedicated to Search and Recovery (“Survey”) was set up in the Aircraft Group (see Fig. 1).

The purpose of this report is to present the different tasks carried out to prepare and perform the search operations to recover the engine parts. These tasks were the following (see Fig. 2):

This report covers the period from the date of the accident to the end of June 2018. This period encompasses Phase I (helicopter flights to recover the debris located just after the event) and Phase II (aerial and ground campaign as well as their preparation), see Fig. 2. In June 2018, a plenary meeting was held with all the parties to debrief the aforementioned search phases. The definition of the search area progressed in parallel, with help of ballistic computations and numerical simulations. Further work and the budget are discussed in the last two chapters.

Read the full report: CLICK HERE

Air France flight to Mumbai diverts to Isfahan, Iran

Air France’s flight AF 218 from Paris (CDG) to Mumbai with a Joon Airbus A340-300 (F-GLZP) on May 8 was forced to divert to Isfahan, Iran due to a “malfunction of the ventilation system”.

Read the full story from the New York Post: CLICK HERE

 

Reuters: Air France-KLM to cut 400 ground staff positions

From Reuters:

Air France-KLM will propose a voluntary redundancy scheme that would affect nearly 400 ground staff at French airports, La Tribune said on Saturday, a day after the airline posted a deeper first-quarter loss.

Read the full report: CLICK HERE

Air France-KLM reports its “challenging” first quarter results

Air France-KLM reports its first quarter 2019 results:

FIRST QUARTER 2019

  •   Passenger growth +3% and load factor -0.3 point.
  •   Unit revenue down -1.9% due to Easter shift and substantial industry capacity growth in the

    winter.

  •   Unit costs decrease by -0.4% at constant currency and fuel.
  •   Operating result at -303 million euros, with unit cost improvement more than offset by unit

    revenue, fuel bill and currency headwinds.

  •   Further reduction in Group net debt, down 403 million euros to 5.8 billion euros and Net

    debt/EBITDA ratio at 1.4x stable compared to 31 December 2018.

    OUTLOOK 2019

  •   Long Haul industry capacity to / from Europe for the summer 2019 is projected to grow at a slower pace compared to last year, particularly to Middle East, North America and Asia.
  •   Based on current data for Passenger network:
    •   Long-haul forward booking load factors from May to September are on average ahead

      compared to last year.

    •   Network passenger unit revenues at constant currency expected to slightly improve

      compared to last year for the second quarter 2019, with positive long haul unit revenues

      largely offset by negative point-to-point unit revenues.

  •   Full year guidance confirmed:
    •   Unit cost (CASK) reduction between -1% and 0% at constant currency and fuel price,
    •   Net debt/EBITDA ratio below 1.5x.

      Benjamin Smith, Air France-KLM Group CEO said: “As anticipated, the first quarter has been challenging for the European airline industry including the Air France-KLM Group, as substantial industry capacity growth in the off-peak business period led to unit revenue pressure. In this context, the Group achieved further improvement in unit cost while reaping the benefits of its efforts to strengthen its positioning, as evidenced by the first signs of progress in operational performance at Air France, notablyin term of “Net Promoter Score” and punctuality. These elements, together with a more benign industry supply outlook for the summer, lead us to expect improving trends in the rest of the year and to confirm our full-year guidance. We aim to have a capital market day planned in November 2019 to further outline the Group strategic directions.”

First quarter 2019 combined Passenger and Cargo revenues increased by 1.0% at constant currency to 5.2 billion euros, for a capacity growth of 2.3%. The operating result amounted to -279 million euros, a 146 million euros decrease at constant currency compared to last year, mostly due to unit revenue pressure and fuel bill increase as anticipated.

First quarter 2019 capacity increased by 2.3%, mainly driven by the South American, North Atlantic and Asian networks with respective growth of 9.8%, 5.3% and 1.8%.

The passenger network experienced a supply – demand imbalance putting pressure on unit revenues. Revenue management anticipated to price competitive trends in the market and managed to contain impact on unit revenues to -1.6% at constant currency compared to last year.

  •   The North America network experienced competitive pricing sensitivity and posted a 2.5% unit revenue decrease, but after a strong unit revenue performance in the previous year (+4.9%).
  •   The 9.8% additional capacity on South America was driven by growth on the Andean routes and the opening of the Fortaleza service in April 2018. Ongoing pressure persists due to economic difficulties in Argentina and the international demand recovery of the Brazilian market progressing slower than anticipated.
  •   The Asian network’s solid performance trend continues, with first quarter unit revenue up 1.7%, driven in particular by the Japanese network.
  •   Caribbean & Indian Ocean network posted a strong result with unit revenues of +4.3%, driven by strong leisure demand.
  •   Africa & Middle East network was relatively stable compared to last year.
  •   The medium-haul network saw a unit revenue decrease of 2.4%, due to substantial intra-

    European industry capacity growth.

A slowdown of volumes in the first quarter is visible in the whole air freight market, due to economic slowdown, political uncertainties and trade disputes. This has put pressure on freight rates, resulting in a unit revenue development of -4.0% at constant currency. Several network rationalization measures have been implemented during the quarter to counterbalance the negative trend. A slight capacity increase has been offset by this unit revenue decrease, resulting in a decline of revenues by 1.3% at constant currency.

Transavia: Strong capacity growth, but unit revenue decline primarily explained by Easter shift

First quarter 2019 saw the launch of several new routes and a strong capacity growth of 11.4%. Unit revenues decreased by 3.5% compared to last year, primarily explained by Easter shift and an increase of stage length of the route network. The unit cost improved with -0.8% and -1.7% at constant fuel and currency.

The first quarter 2019 operating result stood at -71 million euros, 13 million euros lower compared to last year.

In the first quarter 2019, the Air France-KLM Group posted an operating result of -303 million euros, down 185 million euros compared to last year, which was impacted by the Air France strike for -75 million euros.

The unit revenue at constant currency of -2.2% compared to last year had a negative impact of 115 million euros on the operating result.
The fuel bill including hedging amounted to 1,201 million euros for first quarter 2019, up 140 million euros, of which 44 million euros is explained by an increase in the fuel price and a volume effect of 34 million euros for the capacity increase compared to last year. The result of the fuel hedges has been a gain of 35 million euros.

Currencies had a positive 65 million euro impact on revenues and a negative 108 million euro effect on costs including currency hedging. The net impact of currencies thus amounted to a negative 43 million euros for first quarter 2019.

Unit costs in line with full year guidance

On a constant currency and fuel price basis, unit costs were down -0.4% in the first quarter 2019, driven in particular by the decrease in customer compensations compared to first quarter 2018 that was marked by the strikes in Air France
However this was partly offset by KLM unit cost which were impacted by a 1.3% lower than planned capacity due to weather and technical reasons.

* Sum of ‘Purchase of property, plant and equipment and intangible assets’ and ‘Proceeds on disposal of property, plant andequipment and intangible assets’ as presented in the consolidated cash flow statement.
** The “Adjusted operating free cash” is operating free cash flow with deduction of the repayment of lease debt.

Adjusted operating free cash flow positive

The Group generated positive adjusted operating free cash flow of 241 million euros, an increase of 99 million euros compared to last year, mainly explained by a lower capex in the first quarter 2019 due to a year-over-year shift in investment timing pattern.

Leverage stable

Outlook

The global context remains uncertain given the current geopolitical environment and fuel price trends.For the full year 2019, the Air France-KLM Group plans to selectively grow capacity for the Passenger network by 2% to 3% compared to 2018. Transavia will continue to grow at a sustained pace of 9% to 11%.

Long Haul industry capacity to / from Europe for the summer 2019 is projected to grow at a slower pace compared to last year, particularly to Middle East, North America and Asia.
Based on the current data for the Passenger network:

  •   Long-haul forward booking load factors from May to September are on average ahead compared to last year.
  •   Network passenger unit revenues at constant currency expected to slightly improve compared to last year for the second quarter 2019, with positive long haul unit revenues largely offset by negative point-to-point unit revenues.

    Full year guidance confirmed:

  •   The Group will pursue initiatives to reduce unit costs1, with a targeted reduction for 2019 of

    between -1% to 0% at constant currency and fuel price.

  •   The 2019 fuel bill is expected to increase by 650 million euros compared to 2018 to 5.6 billion

    euros2, based on the forward curve of 26 April 2019.

  •   The Group’s capital expenditures are planned at the level of 3.2 billion euros for the year 2019

    and the Group is targeting a Net debt/EBITDA ratio below 1.5x. *****

     

Air France announces its 2019-2020 winter schedule

Air France Boeing 777-228 ER F-GSPS (msn 32306) IAD (Brian McDonough). Image: 946302.

Air France has made this announcement:

For its next winter schedule, Air France is reinforcing its long-haul and medium-haul networks. The company will offer its customers more flights to Santiago de Chile (Chile), Washington (United States), Naples (Italy), Ljubljana (Slovenia) and Marrakech (Morocco), and will continue its service to Belgrade (Serbia) inaugurated in summer 2019.

More flights to Santiago de Chile

Next winter, the company will be adding frequencies on its Paris-Charles de Gaulle to Santiago de Chile route, increasing from 7 to 10 flights per week. Three weekly flights operated by Boeing 787 will complete the daily service operated by Boeing 777.

Copyright Photo: Kok Chwee (K.C.) Sim.

Flight schedules (in local time):

  • AF402: departure from Paris-Charles de Gaulle at 10:10 am, arrival in Santiago de Chile at 8:35 pm;
  • AF403: departure from Santiago de Chile at 22:55, arrival at Paris-Charles de Gaulle at 16:50 the next day.
    Flights operated on Wednesdays, Fridays and Sundays by Boeing 787.
  • AF406: departure from Paris-Charles de Gaulle at 23:40, arrival in Santiago de Chile at 10:10 the next day;
  • AF401: departure from Santiago de Chile at 16:45, arrival at Paris-Charles de Gaulle at 10:45 the next day.
    Daily flights by Boeing 777.

More flights to Washington

For the 2019-20 winter season, Air France is increasing its flight capacity between Paris-Charles de Gaulle and Washington, from 7 to 11 flights per week. Four weekly flights operated by Airbus A330 will complete the daily service by Boeing 777.

Flight schedules (in local time):

  • AF026: departure from Paris-Charles de Gaulle at 16:40, arrival in Washington at 19:40;
  • AF027: departure from Washington at 21:30, arrival at Paris-Charles de Gaulle at 11:15 the next day.
    Flights operated on Monday, Thursday, Saturday and Sunday by Airbus A330.
  • AF054: departure from Paris-Charles de Gaulle at 13:40, arrival in Washington at 16:30;
  • AF055: departure from Washington at 18:35, arrival in Paris-Charles de Gaulle at 8:05 the next day.
    Daily flights by Boeing 777.

A daily flight between Paris and Belgrade

Since March 31, 2019, Air France has been offering its customers a daily flight to Belgrade from Paris-Charles de Gaulle. These daily services will continue throughout the 2019-2020 winter season.

Flight schedules (in local time):

 

  • AF1660: departure from Paris-Charles de Gaulle at 11:00, arrival in Belgrade at 13:25;
  • AF1661: departure from Belgrade at 14:10, arrival at Paris-Charles de Gaulle at 16:35.
    Daily flights by Airbus A320.

In addition, with its partner Air Serbia, Air France will offer a total of 19 weekly flights between Paris and Belgrade (7 flights operated by Air France and 12 code-share flights operated by Air Serbia).

More flights to Naples, Ljubljana and Marrakech

For its next winter schedule, Air France is doubling its offer of flights between Paris-Charles de Gaulle and Naples and will offer its customers two daily flights.

The company is also doubling the number of flights between Paris-Charles de Gaulle and Ljubljana, from 6 to 13 weekly flights.

Finally, Air France is increasing its offer between Paris-Charles de Gaulle and Marrakech, from 6 to 12 weekly flights.

Top Copyright Photo (all others by the airline): Air France Boeing 777-228 ER F-GSPS (msn 32306) IAD (Brian McDonough). Image: 946302.

Air France aircraft slide show:

First Look: The first Airbus A350-900 for Air France

Airbus is preparing to deliver the first Airbus A350-900 to flag carrier Air France later this year.

The pictured Airbus A350-941 F-WZFN (msn 331) has left the final assembly pending the installation of the engines, final painting and the interior cabin.

F-WZFN will become F-HTYA on delivery.

Air France-KLM has 28 of the type on order. 21 will be allocated to Air France and seven for KLM.

Top Copyright Photo: Eurospot.