Air France Senior Management today presented to the Central Works Council the Perform 2020 plan per business activity.With Perform 2020, the Air France Group displays a clear ambition to make Air France as part of Air France-KLM a major European actor on the global competitive stage:
- The leading long-haul network on departure from Europe, supported by the Paris-CDG hub,
- A cargo activity ranking among the world’s top 5, contributing to the long-haul activity results,
- An extremely dense French domestic point-to-point network under the Hop! Air France brand,
- Transavia, a reference low-cost airline on departure from France,
- A global maintenance and catering player.
This ambition must rely on an economic performance in line with investment requirements and debt reduction objectives. It implies considerable productivity and competitiveness efforts in the Group’s areas of activity, on the basis of realistic objectives, showing the cash-flow improvement and the operating result of the different activities:
- Long-haul activity – significant decrease in the number of unprofitable routes thanks to restructuring the route portfolio and improving competitiveness
- CDG medium-haul activity – significant decrease in loss of Hub feeder traffic
- HOP! Air France activity – reach breakeven
- Cargo – improved aircraft belly profitability
- Maintenance – support for high-growth profitable activities
- Transavia – operating breakeven in 2017 and profitability beyond
- Servair – continued international development and savings at the Paris base
At the same time, in an extremely competitive environment, many actions have been undertaken in all the business activities to continue to win back business initiated with Transform 2015.
While pursuing its efforts to stimulate revenue, Air France plans to continue its unit cost cutting efforts. As set out in the Perform 2020 plan, the objective is to reduce annual unit costs by 1.5% per year (a 3% decrease in controllable costs), i.e. 650 million euros over the 2015-2017 period. To reach this goal by including compensation for inflation, the Group must generate cost savings of 1,130 million euros over this period.
Negotiations and consultations will go on. A progress report will be proposed at the Central Works Council in June 2015.
“Perform 2020 is a real ambition for Air France, which requires us to act with determination in all areas. We will move forward as part of a coordinated approach, with confidence, towards realistic objectives” stated Frédéric Gagey, Chairman and CEO of Air France.