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Topic: AF To Offer LC Fares/services On Short/medium Haul
Username: Alsatian
Posted 2013-01-07 01:12:11 and read 5881 times.

Hello,

According to La Tribune, Air France will announce today a new pricing and services policy à la low cost for 60 french and European routes from Paris Orly, Nice, Marseilles and Toulouse.

In french : 49 euros TTC, pas de miles, pas de bagage en soute..., l'offre d'Air France face aux low-cost

One way from 49 euros with taxes :
- Ticket cannot be modified
- No miles
- 15 euros for a luggage checked on line or 30 euros at the airport (still free for Flying Blue Silver, Gold or Platine)
- still free drink and newspaper
- Not confirmed but the seat selection would be also charged

Topic: RE: AF To Offer LC Fares/services On Short/medium Haul
Username: Azure
Posted 2013-01-07 01:35:07 and read 5807 times.

This was expected !
It seems that LH and AF have converging views on the future of their european network : duplicate the LCC model or die !

Topic: RE: AF To Offer LC Fares/services On Short/medium Haul
Username: spantax
Posted 2013-01-07 03:26:43 and read 5493 times.

Quoting Azure (Reply 1):
It seems that LH and AF have converging views on the future of their european network : duplicate the LCC model or die !

That's it. Most people are not willing to pay a fortune for a newspaper, a soda and a handful of peanuts. Iberia is in the same situation, losing 1,7 million EUR per day. And the difficulties of Air Berlin are of the same type (fares too high usually). Even the SNCF (French railways) are preparing a new generation of "LCC-TGV", that is, a high-speed train with cheaper fares thanks to higher seat density, the elimination of the restaurant-bar wagon and other measures.

The next step should be, logically, the "turboprop LCC". Just let ATR put in the air a 90 seats model and this turboprop model will be a reality.

Regards,

Topic: RE: AF To Offer LC Fares/services On Short/medium Haul
Username: gauravpai
Posted 2013-01-07 04:14:19 and read 5279 times.

ok so they have added low cost fares to the equation as their services inflight/baggage were always low cost    
have missed my bags twice on AF .
And their service was not that great more like the US carriers ,well ok maybe slightly better!!

Topic: RE: AF To Offer LC Fares/services On Short/medium Haul
Username: ushermittwoch
Posted 2013-01-07 05:54:43 and read 5041 times.

Any word if the flights will still count as status flights? That's all I really care about nowadays since their miles are virtually unredeemable, if you're not trying to fly longhaul C or F.

Topic: RE: AF To Offer LC Fares/services On Short/medium Haul
Username: YULWinterSkies
Posted 2013-01-07 06:29:50 and read 4925 times.

Quoting Alsatian (Thread starter):
One way from 49 euros with taxes :
- Ticket cannot be modified
- No miles
- 15 euros for a luggage checked on line or 30 euros at the airport (still free for Flying Blue Silver, Gold or Platine)
- still free drink and newspaper
- Not confirmed but the seat selection would be also charged

Mmmhhhh let us see what is changing:
- ticket usually cannot be modified for the cheapest fares as of today.
- today, 125 miles per segment if flying on a cheap fare. 250 for a quite expensive fare. Up to 500 if flying full Y. From that to 0 is not a big step!
- charge for bags is indeed a new charge for AF.
- drink and newspaper obviously cannot be split among the pax flying on those fares and those flying on other types of fares.
- since when has there been a proper seat selection of AF short haul? Last time I checked (ie last week-end), one can only do it at check-in -and admittedly change the assigned seat for free during the process-

So little change, for how much new cost? That is the question.

imo, AF should focus on what they are best at, ie, international long haul flying.

One difficult problem is this would mean a substantial drop in need for intra-Euro flights, and they still own lots of A320s to be filled profitably. And Embraer does not give away hundreds of ERJ (that would probably be the ideal machine for short-haul and light loads instead of often too large A320s).

Quoting ushermittwoch (Reply 4):
Any word if the flights will still count as status flights?

Haha, regular domestic flights for pax connecting to/from intl flights already do not count as status flights, so I let you do your best educated guess!

Topic: RE: AF To Offer LC Fares/services On Short/medium Haul
Username: ushermittwoch
Posted 2013-01-07 06:37:49 and read 4896 times.

Quoting YULWinterSkies (Reply 5):
Haha, regular domestic flights for pax connecting to/from intl flights already do not count as status flights, so I let you do your best educated guess!

Germanwings actually does already do this, so it is possible.
It's just a logistics problem.  
Quoting YULWinterSkies (Reply 5):
drink and newspaper obviously cannot be split among the pax flying on those fares and those flying on other types of fares.

Yeah, that's what I was thinking as well...
But flights to/from CDG and LYS seem to be unaffected, so it does not really matter to me all that much (at the moment).
I am surprised that they are going to start this model from LCY, too, since I was always under the impression that LCY is a premium destination.

Topic: RE: AF To Offer LC Fares/services On Short/medium Haul
Username: MaverickM11
Posted 2013-01-07 06:48:02 and read 4867 times.

It warms my heart to watch all the EU carriers try the same things and make the same mistakes US carriers made about a decade ago and/or Air Canada is making again 

Topic: RE: AF To Offer LC Fares/services On Short/medium Haul
Username: UA787DEN
Posted 2013-01-07 07:05:49 and read 4797 times.

Quoting ushermittwoch (Reply 6):

AFAIK, AF is the largest operator at LCY. Hopefully some fares will still be standard.

I think the issue at LCY is, AF likes using it as a main LON airport. Many pax end in Paris or the rest of France, and not a ton connect to Long Haul.

Topic: RE: AF To Offer LC Fares/services On Short/medium Haul
Username: skiaplg
Posted 2013-01-07 07:06:08 and read 4796 times.

I'm hoping that this model will apply to most of the London City routes... I'm often on the fence about flying CityJet down to London City from Edinburgh as opposed to Easyjet to Gatwick, and usually chose to save the 40/50 pounds and fly Easyjet. I'm not convinced that the fares will change on the route, but since I never fly with a bag... you never know.

I think this is very good for Air France, all too often I get infinitesimal amounts of miles - I'd rather not get any and get a cheaper ticket on flights to/from France. It would still be nice if they counted as status flights though... I think that this method is a good way of having the same good service for travelers going internationally (they still get their bags checked free, their newspaper, their drink & miles on the worthwhile segment), but also attract people who might be tempted to spend a weekend somewhere, and just need a backpack with them, and who might otherwise have taken a low-cost.

Topic: RE: AF To Offer LC Fares/services On Short/medium Haul
Username: Azure
Posted 2013-01-07 07:28:16 and read 4734 times.

Quoting YULWinterSkies (Reply 5):
Mmmhhhh let us see what is changing:
- ticket usually cannot be modified for the cheapest fares as of today.
- today, 125 miles per segment if flying on a cheap fare. 250 for a quite expensive fare. Up to 500 if flying full Y. From that to 0 is not a big step!
- charge for bags is indeed a new charge for AF.
- drink and newspaper obviously cannot be split among the pax flying on those fares and those flying on other types of fares.
- since when has there been a proper seat selection of AF short haul? Last time I checked (ie last week-end), one can only do it at check-in -and admittedly change the assigned seat for free during the process-

So little change, for how much new cost? That is the question.

You are forgetting the main change here : the price ! You could hardly fly with AF for 49 € one way before... This is quite competitive with the LCCs and the AF service is still preferable.
As for the seat selection on short haul, it is open 30 hours prior departure (and you are notified via email when it opens).

But what is questionable here is the profitability of this low price policy. AF is quite good with its yield management so I would assume they know what there are doing.

Quoting YULWinterSkies (Reply 5):
short-haul and light loads instead of often too large A320s

Light loads ? AF's loads on their european network were 72,3% in november 12 (not the best month for traffic in Europe...). They probably want to improve these loads and bring them on par with their international operations (from 78 to 86% according to the region), but why would they want to get rid of this european traffic ?!
Source : http://corporate.airfrance.com/filea...leases/6040AFKLTraffic_nov2012.pdf

Quoting MaverickM11 (Reply 7):
It warms my heart to watch all the EU carriers try the same things and make the same mistakes US carriers made about a decade ago and/or Air Canada is making again 

Can you please elaborate ?

Topic: RE: AF To Offer LC Fares/services On Short/medium Haul
Username: seansasLCY
Posted 2013-01-07 07:37:39 and read 4704 times.

Quoting UA787DEN (Reply 8):
AFAIK, AF is the largest operator at LCY. Hopefully some fares will still be standard.

These routes are operated by Cityjet and they offer a different product. I don't know whether they will change to the same.

Topic: RE: AF To Offer LC Fares/services On Short/medium Haul
Username: skiaplg
Posted 2013-01-07 08:44:00 and read 4575 times.

Semi-news - the AF site has been overloaded multiple times today already, so it seems like this is generating interest. I haven't found any national newspapers it's been mentioned in, but it's not even been one day and it's been mentioned in a couple major regional newspapers: La Montagne - (Auvergne) and Ouest France.

Topic: RE: AF To Offer LC Fares/services On Short/medium Haul
Username: LondonCity
Posted 2013-01-07 08:48:05 and read 4554 times.

Quoting skiaplg (Reply 12):
I haven't found any national newspapers it's been mentioned in, but it's not even been one day and it's been mentioned in a couple major regional newspapers: La Montagne - (Auvergne) and Ouest France.

There's more information here:

http://www.businesstraveller.com/new...launches-low-cost-economy-offering

Topic: RE: AF To Offer LC Fares/services On Short/medium Haul
Username: MaverickM11
Posted 2013-01-07 08:50:24 and read 4542 times.

Quoting Azure (Reply 10):
Can you please elaborate ?

Just simple schadenfreude--all the things foreign carriers were looking down on US carriers for doing--charging for bags/food, starting internal LCCs with ridiculous names, low fare products, etc.--are now a matter of survival for those foreign carriers.

Topic: RE: AF To Offer LC Fares/services On Short/medium Haul
Username: Mercure1
Posted 2013-01-07 08:56:53 and read 4513 times.

So Air France will adopt LCC revenue model.

But what about cost side of the equation ?

LCC revenue model not very useful unless you have truly low operating cost base.

Even in AF own presentations from prior they speak of potential 15% savings gain with modified regional base concept and crew work rule adjustments with increased utilization, but reality is that some LCC have 40% cost benefit over AF.

Seems futile to adjust revenue model to match LCC, unless cost cut equally reduced to match LCC.

Topic: RE: AF To Offer LC Fares/services On Short/medium Haul
Username: ushermittwoch
Posted 2013-01-07 09:08:23 and read 4485 times.

Quoting Mercure1 (Reply 15):
Even in AF own presentations from prior they speak of potential 15% savings gain with modified regional base concept and crew work rule adjustments with increased utilization, but reality is that some LCC have 40% cost benefit over AF.

As stated above, it looks like they are primarily looking at adding additional revenue.
So it's actually not at all like what LH is doing.

Topic: RE: AF To Offer LC Fares/services On Short/medium Haul
Username: vfw614
Posted 2013-01-07 12:56:57 and read 4063 times.

Quoting skiaplg (Reply 9):
I'm hoping that this model will apply to most of the London City routes...


...according to the newspaper article quoted in post #1 the new concept will be introduced on 58 routes including some from LCY.

Topic: RE: AF To Offer LC Fares/services On Short/medium Haul
Username: FlyCaledonian
Posted 2013-01-07 14:31:51 and read 3581 times.

Sounds confusing! be interesting to see how this pans out.

Topic: RE: AF To Offer LC Fares/services On Short/medium Haul
Username: RussianJet
Posted 2013-01-07 14:37:10 and read 3544 times.

Quoting FlyCaledonian (Reply 18):
Sounds confusing! be interesting to see how this pans out.

I think so too. I can't help but think that an airline should try to be one thing or the other, rather than attempt to be a jack of all trades yet master of none.

Topic: RE: AF To Offer LC Fares/services On Short/medium Haul
Username: Aesma
Posted 2013-01-07 16:34:20 and read 3107 times.

I flew last November on AF (Britair, a nice CRJ1000NG) ORY-BES and back for 49€ each way. It was a special offer (that worked for many destinations), maybe a test ? Except I had a free bag and my window seat was selected 30 hours before departure, that is (not that it mattered since the plane was half empty and I changed seats).

The evening TV news did a fare comparison with Ryanair from Marseille (to have the exact same airports as origin/destination) and ended up a few euros apart.

I'm more interested in what will be offered from ORY myself.

Topic: RE: AF To Offer LC Fares/services On Short/medium Haul
Username: skiaplg
Posted 2013-01-07 17:03:25 and read 3014 times.

It looks like the routes will only be available at the 'mini' price from LCY to regional airports in France.

Quoting LondonCity (Reply 13):
There's more information here:

http://www.businesstraveller.com/new...ering

They say the new prices will only be available from LCY to Brest, Nantes, Pau, Avignon, Toulon and Paris Orly. It's worth to note that the Prix Mini is from euro 49, so it might actually be the other 'prix minis' I think some were cited at 69 or 79.

Aesma - the news' comparison came up with 174 euros with ryanair, and 180 euros with Air France Mini. The BusinessTraveller article links to : http://corporate.airfrance.com/filea...s/press_kits/New_Economy_Offer.pdf

which shows the map of the routes on page 7.

Topic: RE: AF To Offer LC Fares/services On Short/medium Haul
Username: starrymarkb
Posted 2013-01-08 00:56:36 and read 2046 times.

Quoting spantax (Reply 2):
The next step should be, logically, the "turboprop LCC". Just let ATR put in the air a 90 seats model and this turboprop model will be a reality.

Isn't that what BE were doing, though it seems they are struggling with the airline side of the business hence the move into contract flying...

Topic: RE: AF To Offer LC Fares/services On Short/medium Haul
Username: r2rho
Posted 2013-01-08 01:15:12 and read 1980 times.

Lots of rumors on the future AF short-haul strategy going around these days...

HOP : The New Brand Of The Air France Feeders (by Alsatian Jan 5 2013 in Civil Aviation)

Rumor : Air France To Close Its Regional Bases (by Alsatian Jan 2 2013 in Civil Aviation)

I wonder how many will materialize and in what way, and how AF short-haul will look like in 2 years... interesting times for EU short-haul ops in general...

Quoting Alsatian (Thread starter):
new pricing and services policy à la low cost for 60 french and European routes from Paris Orly, Nice, Marseilles and Toulouse.

Before there is any misunderstanding about AF becoming a LCC: I interpret this as the introduction of a multi-tiered fare structure, as LH-4U are going to do. You can still pay more for full service, but you have the option of paying less for less service.

Quoting Mercure1 (Reply 15):
LCC revenue model not very useful unless you have truly low operating cost base.

I agree. It seems that unlike LH-4U, IB-I2-VY, or AY-FlyBe, AF is only targeting the revenue side, but not the cost side for now. This will prove to be insufficient if cost base is not eventually addressed.

Quoting Mercure1 (Reply 15):
in AF own presentations from prior they speak of potential 15% savings gain with modified regional base concept and crew work rule adjustments with increased utilization

And yet, they have been very erratic about their regional base strategy, pulling back routes and frequencies only months after launching them. It is unclear how or if the regional strategy will continue.

Quoting ushermittwoch (Reply 4):
Any word if the flights will still count as status flights?

I'd bet on no... a shame as status flights are all I care about too, the miles on these short flights are worthless anyway.

Quoting YULWinterSkies (Reply 5):
imo, AF should focus on what they are best at, ie, international long haul flying.

Sure. Actually all EU legacies would love to ditch their loss-making short-haul ops starting tomorrow and fly intl only. The problem is that they need the short-haul feed to make long-haul work. It is the dilemma that all EU carriers are facing these days.

Topic: RE: AF To Offer LC Fares/services On Short/medium Haul
Username: Azure
Posted 2013-01-08 04:27:29 and read 1827 times.

Quoting r2rho (Reply 23):
It seems that unlike LH-4U, IB-I2-VY, or AY-FlyBe, AF is only targeting the revenue side, but not the cost side for now.

Wrong : AF has implemented the "Transform 2015" plan in order to reduce the costs !
If you care to read : http://corporate.airfrance.com/en/strategy/transform2015/



I have to disagree with most commentators who look pretty pessimistic on the future of the european Legacies short haul networks.
At least AF and LH are reacting in an appropriate manner : they are giving the choice to their customers. "Keep flying with us, choose the level of service you want, and pay for the right price".
These legacies still need to adjust their operational costs on short haul but are obviously working on it in order to be profitable even with a lower revenue. I do not know if they will be successful. But anyway they have a broader margin for action than the LCCS : these latter have already shrunk all costs so much that they cannot go further ; they entirely depend on the short haul activity while the legacies can compensate their losses on short haul with their profitable operations on long haul : not sure the LCCs can win a "price war" on the long run...


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