Air France-KLM is establishing a new budget airline (though not a low-cost carrier) to fly next year and compete head-on with Gulf carriers.
The new airline will start flying on routes to Asia next year and will run 10 long-haul aircraft by 2020. Planes will include A340s, according to a report in the Wall Street Journal.
The Franco-Dutch airline calls its new initiative Boost. It will offer service levels lower than Air France but higher than a budget “low-cost” operation.
Boost will focus on the “ultracompetitive markets” on which Gulf carriers operate, Business Travel News said. These will include current Air France-KLM routes, new routes (seen to form about 30% of the new carrier’s operations) and routes that Air France-KLM has dropped as unprofitable.
Air France was reported as saying the new entity would be “simple, modern and innovative” but not be a low-cost carrier.
It’s part of a grand plan by chief executive Jean-Marc Janaillac, who replaced Alexandre de Juniac in July. Gulf airlines and low-cost carriers are among Air France-KLM’s fiercest competitors.
Written by Peter Needham