Today the Air France-KLM Group is taking an important step in its development, with the signing of an amendment to the group's “Air France-Transavia pilot agreement” allowing Transavia France to operate domestic routes within France.
This agreement has been signed between Air France and Transavia's management and the SNPL Air France-Transavia, the union representing a majority of Air France pilots, following a referendum submitted to its members. A turnout rate of 82.63% - and with 90.37% of those votes being in favour of the proposal - reflects the responsibility the pilots are taking during this crucial juncture and the overall desire to provide Air France with the means to overcome the COVID-19 crisis and emerge stronger by transforming its domestic network. This network has been loss-making for years despite continuous ongoing restructuring since 2000, and it is faced with strong competition: the constant growth of both low-cost airlines and the TGV high-speed train network.
This agreement permits Transavia to operate routes within France, and adjusts pilot guarantees pertaining to European network activity in line with the levels of activity expected on the domestic network over the coming years. In September 2019 an agreement was signed lifting restrictions on the growth of Transavia's fleet.
Launched in 2006, Transavia France is the low cost airline of the Air France Group (comprising Air France, its regional subsidiary HOP! and its low cost subsidiary Transavia. The Air France Group is a subsidiary of the Air France-KLM Group). It is a major strategic asset, notably by enabling Air France to take advantage of the buoyancy of the leisure market in France, and to respond to competition from international low-cost operators in an efficient and appropriate way. Transavia operates more than 100 routes to Europe and the Mediterranean region from its bases at Paris-Orly, Nantes, Lyon and Montpellier. In 2019 it carried 7.4 million passengers (+5%) and posted a load factor of 92.8%.
These changes will enable the Air France Group's domestic operations to be right-sized in order to ensure sustainable future profitability. In this way, by 2023:
- The Air France-KLM Group will strengthen its position in Paris by capitalizing on the strengths of its various subsidiaries, and in particular the strengths of Air France and its partners.
- At its Paris-Charles de Gaulle hub, Air France will continue to strengthen its main base for medium- and long-haul flights at terminals 2F and 2E. HOP! will link the Paris-Charles de Gaulle global hub to regional markets from terminal 2G.
- At Paris-Orly, Air France will transform and diversify its network in order to enhance its offer and significantly improve its financial performance. On the domestic market, Air France will continue to operate frequent La Navette flights to Toulouse, Nice and Marseille, as well as routes to Corsica. Air France will also bolster its long-haul services to the French Overseas Departments and Territories (Cayenne, Pointe-à-Pitre, Fort-de-France, Saint-Denis de La Réunion) as well as to New York-JFK. Transavia will start operating domestic routes while continuing to expand its European network, thereby increasing the Group's route portfolio.
- In Lyon, Air France will consolidate its position as leader by developing new services with HOP! and Transavia.
- Transavia will also continue to expand from its bases in Nantes, Lyon and Montpellier.
- Transavia's customer experience will continue to evolve to reinforce its competitive position against other operators in the low-cost market, while maintaining a clear and relevant positioning in the leisure market.
The development of Transavia on the French domestic market is a key step in the Air France Group's strategic plan to improve its financial performance. With this new offer, the Air France Group will be competitive in each sector in which it operates, now with the right tools and products adapted to each market segment (i.e. an attractive and competitive offer in the leisure, regional, connecting and point-to-point markets; service to relevant short, medium and long-haul markets; Economy, Premium Economy, Business and La Première options; as well as its market-leading Flying Blue frequent flyer programme).
This reorganization will enable the Air France Group to take full advantage of its geographical position, with France being the world's leading inbound travel market.
Transavia will shortly be announcing details of the routes it plans to operate and the schedule for their launch.
The planned reorganization of domestic operations is also part of the Air France KLM Group's drive to step up its efforts in the field of sustainable development, which are already among the most ambitious in the industry. Domestic routes between Paris-Orly and the French regions will be closed when a train alternative in less than 2:30 exists, and the fleet will be renewed at a sustained pace with the arrival of the first Airbus A220-300s starting in September 2021. These latest-generation aircraft are one of the main levers used by Air France to reduce its carbon footprint and will reduce CO2 emissions by 20% compared to the Airbus A318s and A319s they will replace. Air France will also continue to proactively offset all its customers' CO2 emissions on domestic flights.
The Air France-KLM Group is continuing to transform. It will do its utmost to limit the impact of these changes on its employees around the world and will continue to work responsibly with all labour partners to ensure that this difficult but necessary process is carried out in the best possible conditions.
"The rapid endorsement of this agreement is a major step forward in the Air France-KLM Group's recovery strategy," said Air France-KLM CEO Benjamin Smith. "At a time when our sector is experiencing an unprecedented crisis and is entering a phase of profound change, we have taken an essential step towards achieving sustainable improvements in our economic and environmental performance. Transavia is a differentiating asset for the Group and today we are starting a new chapter in its development, together with all our stakeholders, who are committed to the successful future of Air France.”
"Air France's domestic market is one of our Group's strategic assets,” said Anne Rigail, CEO Air France. “Connecting the French regions and linking them to the rest of the world is integral to our business. To ensure this activity continues, it is now essential to restore its balance. I welcome the quality of the dialogue we have had with all our labour partners to ensure Air France achieves this by 2023, by making the best use of our various airlines' unique assets. Together with the renewal of our fleet, this reorganization of our operations will also enable us to achieve our sustainable development objectives, with a 50% reduction in our domestic CO2 emissions by 2024. In the face of this reorganization, unwavering solidarity between the Group's subsidiaries will be a priority.”