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Business

Air France launches ‘low-cost’ tariffs to compete with rivals

Text by News Wires

Latest update : 2013-01-08

French airline Air France on Monday introduced ‘low-cost’ ticket prices to a number of European destinations in a bid to compete with budget airlines. The tariffs are available to passengers travelling with hand luggage only.

French airline Air France launched on Monday an offensive to compete with low-cost carriers, offering flights from four French hubs to 58 destinations in Europe and around the Mediterranean at fares starting from 49 euros ($64) for passengers who travel with carry-on baggage.

"Air France aims to adapt to the changes in purchasing behaviour and the new expectations of travellers, while at the same time attracting new customers," it explained in a statement.

It said that the programme was aimed at the 60 percent of clients for whom the lowest price was the most important factor.

The new offer is part of a restructuring plan presented a year ago which is designed to save Air France two billion euros by 2015, chairman Alexandre de Juniac told a press conference.

Low-cost tickets went on sale on Monday for flights beginning on February 6, and were expressly "aimed at clients who might be tempted by low-cost airlines," de Juniac said.

Although the group posted stronger-than-expected quarterly results in late October, it is under severe financial and cost-cutting pressures and is trying to fight against competition from budget European carriers such as EasyJet and Ryanair.

The new fares, which apply to flights from Orly airport south of Paris and growing Air France regional low-cost hubs in Marseille, Nice and Toulouse in southern France, "are a long-term offer" according to the airline's deputy director at Orly, Florence Parly.

Air France has found through a study that on short and medium-haul flights, 40 percent of its passengers do not check in bags at present.

The so-called MiNi offer, which does not include frequent-flier credits, is not limited to a specific time period, but customers who buy tickets will have to pay a surcharge if they subsequently seek to check in luggage, and cannot request specific seats via the airline's website.

The fares also complement a strategy by Air France-KLM simultaneously to raise standards for passengers who pay more for business and "Premium Economy" seats.

Commercial director Christian Boireau said that the airline expected to sell more than one million tickets at prices which would vary from 49 to 69 euros, and noted on Monday that the company's website was quickly saturated.

De Juniac said: "Our forecasts show that we will make money. The business plan is viable."

The plan was integrated in the carrier's Transform restructuring strategy so "it will not by itself require additional cost-cutting measures," he said.

(AFP)

Date created : 2013-01-08

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