Anne-Marie Couderc, non-executive Chairman of the Air France-KLM Group and of the Air France Board of Directors, Benjamin Smith, Chief Executive Officer of Air France-KLM, and Anne Rigail, Chief Executive Officer of Air FranceThis week, Air France's Board of Directors and Executive Management welcomed the press as part of the company's annual New Year celebrations. This was an opportunity to unveil some of the changes that will affect Air France in 2023.
The three personalities recalled that the group has weathered three years of seismic shocks in the air transport sector fairly well. " Not only have we been hit by the Covid crisis, but also by the war between Russia and Ukraine, which is forcing us to bypass Russian airspace and cope with soaring energy prices." said Anne-Marie Couderc. " We resisted thanks to the massive support of our shareholders - the French and Dutch governments. At the same time, we have demonstrated the strategic role of our airlines, notably with the implementation of medical airlifts, which have shown that we are at the service of our communities." she added.
Decarbonisation, a major project in 2023... and beyond
La Air France-KLM's major ambition in the months and years ahead remains the decarbonising the air transport industry. An ambition underlined by the three directors. " Decarbonising our business is becoming increasingly important. With the delivery of our new aircraft, we are reducing our CO2 emissions from 20% to 25%.. We will also be stepping up the use of sustainable fuel. This is a strategic challenge for the coming years. Our sustainable trajectory is ambitious but realistic, and we are working in depth with Airbus, the Safran group (formerly SNECMA-Sagem) and ADP to this end." said Ben Smith.
" The mobilisation of all players in the air transport sector to conquer energy independence will be an asset for France, the Netherlands and Europe as a whole" said Anne Rigail.
Among the challenges for 2023, the CEO of Air France outlined the Group's objectives: " regain our full level of activity, pursue our commercial conquest, continue to improve the Group's financial trajectory and, of course, continue tospeeding up our actions to promote the ecological transition" .
China finally wakes up
The year 2023 will be punctuated by a back in force in China. " We are resuming our flights to Beijing, Shanghai and Hong Kong on a daily basis." announced Ben Smith. Prior to Covid, the airline operated up to 32 weekly frequencies to the People's Republic, excluding Hong Kong.
However, the recovery will be gradual. Air France has been flying to Hong Kong again since 9 January, with three flights a week.. The airline will continue to serve Beijing with one flight a week, while flights to Shanghai-Pudong will be increased from two to three times a week from 3 February.
From 1 July, the airline will be offering daily flights to each of these destinations.. " I think we're going to see a fairly strong upturn in traffic flows between France and China, and we're already seeing it. It is important to remember that the Chinese market was very important in France. Admittedly, we are not at the same level of recovery as when the borders with the United States were reopened. But that has only just begun. And there are still a few restrictions, notably with tests" says Ben Smith.
" However, I'm fairly optimistic that traffic with China will bounce back fairly quickly." says Ben Smith. Asked whether the Air France-KLM group intends to take over its entire network, Ben Smith confirms this gradual build-up. Before the crisis, KLM served 5 destinations (Beijing, Shanghai, Chengdu, Hangzhou and Xiamen) and Air France 3 (Beijing, Shanghai and Wuhan).
" The level of supply is certainly not yet equivalent to 2019. We hadn't really planned to return so soon. We have already announced that we will be returning with one daily flight each to Beijing and Shanghai. In 2019, however, we will be operating two daily flights to Shanghai. As for Hong Kong, we will be operating the same level of frequencies as in 2019." adds the CEO of Air France-KLM. He added that a balance will have to be found between North America, where supply is now higher than in 2019, and Asia, where the company is seeing demand re-emerge.
The overflight ban over Russia, a major handicap in 2023
This resumption of traffic to Asia will be hampered by two major obstacles. There is still a shortage of pilotsmore than aircraft. " We have 109 long-haul aircraft in our fleet this year, compared with 108 before Covid. It's hiring pilots that's not so easy, because there's the training time. Will we have to reduce our US supply to keep pace with Asian demand? ? That's a question we might ask ourselves if there's an explosion in demand." says Ben Smith.
The other major difficulty that worries Ben Smith most is the Russian overflight ban to Asia. " Last year, the ban on overflying Russia had relatively little impact on us, as our activity was reduced due to low volumes in Asia. In Korea and Japan, the overflight ban has added between two and three hours to flight time. This has had an impact on prices" he stresses.
" Now that China is being reopened, the impact of the ban will be greater. Because of the impact on operating costs and profitability, the [commercial] offers we are making cover the difference. The main problem is that Chinese airlines still have the right to fly over Russia.. It will be complicated in terms of competition of course. It's a concern not just for us but for all the airlines that don't have the right to fly over Russia. I don't know if there could be something put in place by the European Union to rebalance the competition. But it's a real problem at the moment." Ben Smith insists.
90 years and looking forward
However, another major event awaits Air France in 2023. A happy event. 2023 will mark the 90e company anniversary. Born of a merger in 1933, the company will be celebrating its long history this October. " It's not just a look back at our history. But also a perspective that allows us to define our next 90 years." says Anne Rigail. See you in October for the celebrations!
