French flag carrier Air France is doing badly. In its 2018 full year results (excluding financial statistics – to be published February 20, 2019), the airline reported some low figures compared to that of its Dutch counterpart, KLM. It seems the carrier is therefore struggling and speculation suggests that without a dramatic change, Air France could be forced into bankruptcy.
Crew strikes, plane groundings and lack of capacity, all of which are linked to one problem, have lead to a series of everlasting problems which have severely dented Air France’s reputation. The one problem is its crew unions.
Crew unions are extremely important for any airline as they enable the planes to fly. Unions can have a big effect on how the airline runs its business, and if the carrier disagrees with the unions’ suggestions, it can cause chaos. That’s exactly what happened at Air France; as the cost of labor continues to rise, airlines are finding it increasingly difficult to operate profitably. Air France therefore denied a unions’ request for a rise in pay and was subsequently forced to endure strikes.
Its entire business was at stake in 2018 and its possible it still is this year. Word of mouth advertising is always very effective and, if all goes well, it can bring in hundreds if not thousands of new passengers. But of course it failed at Air France. With hundreds of its flights cancelled and a decrease in overall quality of service due to the management being under pressure, its ratings have reduced dramatically.
What Air France Needs To do next
The first thing that Air France must do, is get their operations back on track and agree on a long term agreement with all its unions which would strengthen its position for the future.
Some would say that Air France's reputation is absolutely wrecked. Immediate, positive advertising is now evidently needed.
Keeping in mind that Air France is a premium airline, so service should be at its absolute best, showing passengers what Air France is capable of and why it should remain an important choice when needing to fly. Once again this brings me back to the point of word of mouth advertising which will hopefully be able to play a critical role in bringing Air France back.
When will Air France be back on its feet?
Unfortunately, its hard to say. In my view it seems that it may take up to five years to begin performing better, with sales coming at a slow pace in 2019-2020. Sales will, if Air France does something about its reputation, increase over the period and will continue to be hurt by tight competition coming from long haul low cost carriers (LCCs) performing quite well as well as short/medium haul LCC's. Paris Orly-based airlines will pose the biggest threat in general, and on specific routes it will instead be the direct competitor operating to Air France's Charles De Gaulle base if there happens to be one.
The financial report has yet to be released and will be published on February 20. Follow our Instagram account, @aeronewsx to stay updated with when it comes out.
Please note, this article was only the author’s personal views and is therefore simply a personal speculation.
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