Not competing with the train and becoming more sustainable is the way forward for Air France. The government bailout package that gives them liquidity and air under their wings through the corona crisis also places demands on the French aviation giant.
In the second quarter, Air France lost 92 percent of its business and reported a loss of 1.1 billion euros, equivalent to 10.4 billion kronor. To secure the company's liquidity and get through the crisis, they received a billion-euro package guaranteed by the French state in May.
”"We received rapid and strong support from the French government. It was good news because we were unsure how long the crisis would last and what the impact would be. At the moment, we have no liquidity problems thanks to the injection of money," says Air France CEO Anne Rigail.
The rescue package of 7 billion euros, equivalent to 72.7 billion Swedish kronor, is covered by a state-guaranteed loan from nine banks and a shareholder loan from the French state, which owns 14.3 percent of the company.
The package also came with conditions. Among other things, the company must become as competitive as its competitors, British Airways and Lufthansa Group, in Europe and also become more sustainable by reducing its carbon emissions.
”We have committed to halving our carbon emissions for French domestic flights by 2024 compared to 2019,” says Anne Rigail.
To meet these demands, the airline has terminated all its flight routes from Paris Orly Airport to cities where an alternative train journey takes less than 2.5 hours from the capital.
”"We work closely with SNCF, which operates the train services, so that more and more customers can more easily take the train instead on short distances. We complement each other, we can even be partners," she states.
Further measures to reduce carbon emissions will be taken in the coming years. The airline aims to reduce its carbon emissions per passenger kilometre by 50 percent by 2030. According to Anne Rigail, this goal will be achieved by replacing parts of the fleet and phasing out fossil fuels in the future.
”We are investing more than 1 billion euros, equivalent to 10.3 billion kronor, each year for the next three to five years to renew our long-haul and medium-haul flights,” says Anne Rigail.
By replacing, among other things, the Airbus A380 and A340 aircraft models with a newer generation, fuel consumption can be reduced by 25 percent, she notes.
In parallel, the company is implementing a significant downsizing of its operations. Around 7,600 employees, both pilots, cabin crew and ground staff, will be laid off from Air France and its subsidiary Air France Hop. According to Anne Rigail, the focus is on prioritizing voluntary redundancies, early retirement agreements and transfers.
The plan is to reduce the number of employees until 2022, but already this year around 368 pilots and 1,151 cabin crew have been let go. Further cuts are expected in early 2021, as discussed with the union, meaning that 3,640 ground staff will leave the company before the end of 2022.
”"In order to be able to handle the operational crisis and be as competitive as the market when the crisis is over, a transformation plan is needed for the company."”
In order to be competitive and increase flexibility for customers, Air France has introduced new rules regarding its flight tickets. Rebooking and cancellation can be done up until the day before departure. The customer can either get a refund, a voucher or rebook the trip free of charge.
In addition to restrictions and travel bans in some countries, travelers' fear of infection has affected flying. Air France is working to be able to promise Covid-19-free flights, Anne Rigail continues.
”We believe we can have COVID-19 free air travel by using antigen tests, then we can get a result within 30 minutes.”
Antigen tests are a new type of rapid test for detecting COVID-19. At Orly and Roissy Charles de Gaulle airports in Paris, the company has already introduced some antigen tests to evaluate their effects.
Testing yourself before a flight is something that Anne Rigail believes may become relevant in the future.
”Before we have a vaccine or an effective treatment, testing may become routine, just as the vaccine is for yellow fever if you are going to travel to Africa or South America.”
When will the airline industry have recovered to the same level as before the corona pandemic?
”At the beginning of the pandemic, we and the entire industry believed that by 2023 or 2024 we would be back to the same volumes as in 2019. Now we can see that this can be questioned, as we are seeing a kind of second wave. The restart will be longer and slower than expected.”
Source: di.se
