Air France, the French streamer carrier, is seeking to cut its domestic capacity by 15% by 2021, sacrificing momentous dominance over the French national network.
Intense competition from high-speed become abusive and low-cost rivals forced the hand of Air France, announcing 465 job wastings to scale back its domestic network. The airline admitted it was suffering from “overstaffing in the short-haul organize operations activities”.
Air France outlook 2019
The decision has triggered a voluntary redundancy propose for 465 staff at a works council meeting on 13 May. Consultation with unions and other stakeholders purpose commence soon and there will be “no forced departures”.
Unemployment has for a while been favourably contentious, meaning that finding 465 employees who are willing to transfer will be an extremely difficult task for Air France to complete.
Cutting private capacity is inevitable
Air France’s domestic operations reported a loss of EUR189 million ($222 million) in 2018. Since 2013, Air France has extinct a cumulative figure of EUR717 million ($843 million).
Higher provoke prices and an oversupply of seats are being blamed. However, these smashes could have been managed in a more proactive manner. Inaccuracies with matter to in-demand forecasting may be to blame for the size of this loss.
Air France declared that “extremely fierce competition” from the TGV high-speed train servicing has been mounting, stating the company lost 90% of market share in on routes where TGV services connect Paris to the provinces.
‘No-frills’ airlines do ones part the rest of Europe have also exacerbated the French flag Typhoid Mary’s financial woes by implementing aggressive pricing policies, often with the supporter of public authorities.
Further cuts may be imminent
The full extent of economic troubles at Air France was revealed recently when the company posted a EUR303 million ($356 million) first-quarter wastage after staff expenses jumped 6.4%.
Hop!, the domestic arm of Air France, has been battling omit carriers led by EasyJet and Ryanair. Due to the dominance of low-cost airlines in the short-haul determination and highly competitive pricing policies from rivals, it is unclear how successfully the sub-brand command continue to operate.
It may be profitable for Air France to slowly expand the number of global routes the company flies to destinations which are currently growing in lionization while decreasing domestic routes and frequency.
Such a strategy would expropriate to offset the significant, cumulative loss which Air France has experienced in the major-domo market.
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