Air France Group’s Joon plot

In the beginning:

-Air France strike attracts media attention.


-Joon starts Paris-Cairo flights.


-The Air France Group (AFG) stopped separating AF and KLM traffic stats.



So where’s the plot?

-Joon was billed and launched as a longhaul no-frills-airline for AFG – Air France, Hop, Joon, KLM, Transavia.


-*See our airline-type definitions below to better understand.


-Cairo is not an NFA operation. Joon’s A340 has three cabin classes and therefore can be considered a lower-cost replacement for costly Air France. *See LCA (low-cost-airline) in the definitions below.


-En passant, Cairo is a medium-haul route, not longhaul as AFG names it.


-Starting February, AFG reverted to its practise of publishing combined traffic results for AF and KLM after a 2-year period of transparency. During that period, we noted that KLM, broadly, was growing twice as fast as AF. Today, KLM is about 67% the size of AF; five years ago it was closer to 50%.


-So initially we thought the move to hiding traffic results was to reduce the awkwardness (in image and in management – AF still manages AFG) for AF that its KL junior partner is becoming an equal partner.


-But perhaps not. Is the move to hide the coming fall in AF traffic as Joon takes over some flights that before would be AF’s? (Note that in our scenario, an LCA can operate on the same routes as the parent airline. In such a case, Joon could simply be providing extra capacity to fill demand on the route.)


-If the plan is indeed to make Joon an LCA, it is a smart business move. This is how a sizeable (above 75mn seats sold?) airline group should be constructed. In the AF case, difficulties with staff (actually a France problem) would require hidden moves like this.


-But in a more transparent liberal business world, it makes good business/service sense to offer a range of services and fares on some routes. Thus the AFG needs to offer some FSA flights on, say, Paris-Berlin early-morning and end-of-business-day, then perhaps one LCA flight mid-day, and NFA flights at weekends.


-Under our definitions, AFG has two FSAs (AF and KLM), one LCA (Joon), and one NFA (Transavia). And Hop.


-Hop? If Joon is a smart move, Hop was dumb. It operates on regional routes with smaller aircraft, both higher cost, and aims for FSA levels of service, so higher costs, on routes where the pressure for lower fares is strong. As this strategy must be a loss-maker (no separate figures, financial or traffic, are published), Hop will probably be shut down in the next two years, although that could mean a face-saving merge into AF or even Joon.


*Notes: Our airline-type definitions:

-FSA = full-service-airline. Offering first/business/economy, travel agency bookings, meals/bookings/baggage/cancellations included, etc. As its name indicates – full service.


-LCA = low-cost-airline. (Not a no-frills-airline; see next.) An FSA but with lower operating costs – cheaper longer-hours flight-deck crew, younger/new longer-hours cabin crew, tighter cost control (twinned 3-star hotel rooms, for example), fewer fare types, may have first and business cabins as well as economy, and which allows bookings through travel agencies etc. If relevant, usually similar to the parent airline, but a different name, and competition against parent airline allowed.


-NFA = no-frills-airline. We believe that among the many essential elements that make a successful NFA are: shorthaul point-to-point routes; market freedom in terms of fares, routes; single aircraft type; where relevant, competition against parent airline allowed; extremely-low fares when bought at least three months in advance, say US$25; one fare at one time (no wholesale rates, travel agency commissions, etc); no refunds; no (free) service frills; single economy-class cabin; no (free) seat selection; two toilets for 150-seat aircraft; 25-minute turnaround time; cabin crew do daytime cabin cleaning; name and flight change charged at least US$25 each; no trade shows; plenty of consumer advertising and promotion; and much more.


The Fox

Remember, I’m an industry expert in the parallel world.


*Fox – sly.  Trots – left-leaning (Trotsky) plus its more insalubrious meaning.

Foxtrots – leading the industry in a dance.