In the light of France’s World Cup triumph last Sunday, a newspaper interview with a top Air France KLM executive earlier this month might be especially interesting now. Henri Hourcade, 52, the airline’s senior executive for Latin America, the Caribbean and the Indian Ocean, argues that the aviation revolution is making it easier to find convergence between low cost and conventional carriers thanks to the surging demand of a dynamic sector.
Hourcade says that Air France KLM is already used to the competition of low cost airlines in Europe (where they account for 40% of the market), pointing out that that the best way to beat them is to trim costs and improve the quality of service. But he also detects a growing convergence between low cost and traditional airlines because the former is increasing its prices while the latter is obliged to lower its costs.
Air France has already undergone some painful cost-cutting, reducing its workforce from 55,000 to 45,000 staff in this decade. The main costs are fuel, wages and the aircraft and since the airline has no control over the former, it has cut staff and rationalized the use of aircraft, reducing stopover time and moving towards lighter aeroplanes which save fuel with the latest generations consuming 20% less – Hourcade believes that the last drop of petrol on this planet will be used by an aeroplane since it is so difficult to replace.
Air France KLM invoiced €25.8 billion last year. They employ 65 local staff with Hourcade denying any problems with the trade unions of the sector.
Hourcade is bullish about Argentina, pointing out that the recent devaluations have not affected their market which continues to grow, as do Air France investments in the quality of its products. He notes that there are now more Argentines going abroad for business and that the tourist industry is very dynamic, also praising the “extraordinary adaptability” of Argentines.
For now there are no plans for any inland connections although there is co-operation with Gol (the airline’s strategic partner in the region) and with Aerolíneas Argentinas within Skyteam. The airline is also working on transferring its departures from Aeroparque to Ezeiza in order to improve its flights to Paris and Amsterdam.
The French executive approves of this month’s decision to remove price floors because it will encourage tourism and generate growth.