Air France-KLM’s Outlook

What does Air France-KLM think of the future? It’s bullish. Jay Shabat and Edward Russell discuss the group’s recent investor day.

Reading List

• Air France-KLM Bullish on the Future
• TAP Air Portugal Sale Delayed Up To a Year, Air France-KLM CEO Says

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Hosts: Jay Shabat and Edward Russel
Producer: Jose Marmolejos

The Airline Weekly team outlines the significant changes at Air France-KLM since Ben Smith became CEO in 2018. The airline, which was underperforming compared to its peers, has seen considerable improvements, particularly in the operating margin of Air France, which was notably low in 2019. Key strategies discussed include the transformation of Air France’s short-haul routes, particularly moving operations at Orly Airport to their low-cost carrier, Transavia France. This move aims to address the historic losses in domestic routes. They also touch on the expansion of the Flying Blue loyalty program and the integration of SAS’s loyalty program. The hosts discuss the airline’s fleet strategies, focusing on Air France KLM’s preference for the Airbus A350 and Boeing 787 and 777 models, and the potential risks of relying heavily on a single aircraft type.

Shabat and Russell also cover Air France KLM’s business strategy, including their approach to fleet diversification and cost-cutting measures, and they speculate on potential future developments, like the acquisition of Air Europa if IAG’s deal falls through, and the impact of Air France-KLM’s stake in SAS.