Air France-KLM To Launch New Airline

0

Air France-KLM will start a new airline to compete with Middle Eastern carriers in the long-haul market, the company said Thursday. The new project, which Air France is calling Boost, will aggressively pursue “ultra-competitive” international routes while stepping up business at the carrier’s Charles de Gaulle hub in Paris. The airline will go after the business taken from fast-growing competitors such as Dubai-based Emirates, which has drawn customers to its hubs with competitive fares and updated fleets, according to a Reuters report. The airline stressed that the new, yet unnamed carrier will not be in the “low cost” category but will “offer its customers business and leisure destinations with standards comparable to those of Air France in terms of product quality and the professionalism of the crews.”

The company said it expects to have ten aircraft operating by 2020 and hire Air France pilots who transfer voluntarily. While the company doesn’t want the new carrier to be dubbed a budget airline, the new entity will have lower operating costs than its flagship French and Dutch carriers, in part by reducing labor expenses. Employees will have longer work schedules while aircraft fly more hours each day, according to Reuters. Meanwhile, the company is dealing with unprofitable routes along with labor strife brewing at Air France over efforts to cut labor costs, so trying to boost profits with a much smaller airline could be a big challenge, analysts told Reuters.