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Air France CEO on Recovery: We Need to Stay Agile

Madhu Unnikrishnan

June 30th, 2021

Air France CEO Anne Rigail

Although leisure demand is starting to show signs of recovery as Europeans start taking their summer vacations, the short booking curve is keeping Air France’s network planning team on its toes, requiring the airline to change flights and frequencies just days before departure.

“Our network team has to be very agile,” Air France CEO Anne Rigail said in an interview with Skift’s Airline Weekly. “Passengers are booking tickets two to three weeks before departure,” she said, adding, “We are looking for demand where it is.”

One area where demand remains strong is cargo. The carrier has two freighters, both fully utilized, and has operated cargo-only flights throughout its network in the belly holds of Boeing 777-300s. Rigail said cargo flights kept Air France pilots and crews current and allowed it to operate 80 percent of its network throughout the pandemic. Revenues are stronger than they were in 2019, she noted.

Passenger demand, on the other hand, so far appears to be on routes to the Caribbean and to destinations in the Indian Ocean. Air France has increased capacity on routes to several destinations in these regions, including Reunion, Guadeloupe, Martinique, and French Guiana, by 60 percent over 2019 levels, a spokesman for the airline confirmed. Much of this traffic is vacationers but a significant portion is visiting friends and relatives (VFR) traffic in both directions, Rigail said.

Air France’s expansion in the two regions partially fills a vacuum left behind by the bankruptcies of Aigle Azur and XL Airways, both of which went bankrupt shortly before the pandemic. The bankruptcy of Wow Air and Norwegian Air’s retrenchment from intercontinental flying also removed two low-cost competitors on international routes, Rigail said.

During the crisis, VFR routes on Air France’s extensive African network remained relatively strong, down only about 50 percent from pre-pandemic levels. Routes to Asia remain depressed, and Rigail said Air France has no clarity on when passenger flights to China and Japan will recover. “This is the biggest uncertainty of the crisis — when Asia will reopen its borders,” she said.

Routes to North America also are recovering, with Air France now offering 100 flights per week to 12 destinations. The overwhelming majority of passengers — 80 percent — originate in North America and are traveling to France for leisure, mainly due to the U.S. border still being restricted for Europeans, Rigail said. The carrier is reopening destinations, most recently Denver, and focusing on adding frequencies to key markets. Before the pandemic, Air France offered five flights per day to New York, down now to three times per day. Business travel remains anemic, although Rigail, like many of her peers in the U.S., expects business travel to start picking up in September. “This will be the key question for September and onward.”

In Europe, Air France has added 80 leisure destinations for July and August to capitalize on what demand exists. It’s adding capacity to Greece, Italy, Portugal, and Spain to both the mainline and Transavia networks. It’s also adding routes to North Africa — popular leisure destinations for French citizens — as those countries reopen, Rigail said.

As Air France starts to emerge from the crisis, it is facing a changed domestic French airline market as well. The government recently passed a law that bars flights of under two-and-a-half hours if rail service exists. Air France is streamlining intermodal connections with the French national rail operator, SNCF and has added seven more rail-connection routes, Rigail said. Low-cost-carriers are resurgent, and in response Air France, after negotiating a deal with its pilots, is planning to increase the domestic footprint of its budget arm, Transavia. “This is the only airline in the group that can compete with European LCCs at Orly and other French cities,” Rigail said.

Sustainability was the impetus for the new French law restricting shorthaul flights. The carrier has pledged to replace 1 percent of its jet fuel needs with sustainable fuel by next year and is partnering with French energy companies to produce more sustainable jet fuel in France or elsewhere in Europe. Fleet renewal also is part of Air France’s sustainability strategy, Rigail said. The airline has 38 Airbus A350s on order, 10 of which have been delivered, with the 11th arriving next week, a spokesman said. Air France is replacing its Airbus A318 and A319 fleets with 60 Airbus A220s, six of which will join the fleet this year, with 15 coming each year from next year on.

Madhu Unnikrishnan

June 30th, 2021

Photo credit: Air France CEO Anne Rigail Air France

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