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Air France Privatization Delayed, No Surprise  
User currently offlineKeesje From , joined Dec 1969, posts, RR:
Posted (12 years 4 weeks 21 hours ago) and read 1369 times:

Air France Chairman Says Market Conditions Will Delay Planned Privatization

Spinetta said the government is also considering ways to protect Air France as a national and European asset by drafting legislation to prevent it from falling under foreign control.

Flight back to protectionism for the national proud public Airline.

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It's always been the same : Big Talking when things are going well, looking for shelter when the going gets tough.

A business initiative of KLM/NWA and a few banks doing a surprise bid on Air France Stock would trigger the government to jump in to protect AF. No price high enough for national pride.


Performance of AF should not be compared on the same scale as BA, LH, KL and others. The risc taking / financing are totally different for this public company.

13 replies: All unread, jump to last
User currently offlineLuzezito From Spain, joined May 2001, 269 posts, RR: 0
Reply 1, posted (12 years 4 weeks 21 hours ago) and read 1357 times:

As you say it comes as no surprise. While most of AF's European competitors have already made the move for privatisation (LH, BA, IB, KL...), AF's reluctancy has also to do with the French pride and tradition of strong and protective state-run companies.

We should not forget that while the rest of the EU have privatised the electric energy sector, France is effectively barring the entry of foreign operators by maintaining EDF's (élactricité de France) monopole against EU directives and threats of sanctions.

So it is cultural more than anything else, keesje. The French Government are not going to bid for AF because the EU does not allow it. But considering EDF's case, who knows.

Quoniam Vita Brevis Est, Propera!
User currently offlineSailorOrion From Germany, joined Feb 2001, 2058 posts, RR: 6
Reply 2, posted (12 years 4 weeks 20 hours ago) and read 1345 times:

I hope that the EU finnally takes decisive action against this.


User currently offlineAFa340-300E From France, joined May 1999, 2084 posts, RR: 26
Reply 3, posted (12 years 4 weeks 20 hours ago) and read 1341 times:


Stupidity and stubbornness are well worth national pride, it seems.

The French state is the majority owner of Air France. The Prime Minister and the airline's CEO have clearly asserted that the airline will be privatized. Who would be stupid enough to sell millions of stock while the stock markets are not doing extremely well, to say but the least? You Keesje? You Luzezito?

What makes you believe Air France fears a take-over from KLM/NWA? It doesn't take a genius to see that if someone would take over someone else, it would very likely not be this way! The Air France capitalization ranks at the second place in Europe, when it comes to major airlines. This is; it would be easier to take-over British Airways than Air France.

You're bashing the French with their national pride all the day long... But when you believe that KLM is the best airline in the world, that will take over whatever it wants, don't tell me it's not national pride! The French pride pisses off some people, your Dutch pride makes people laugh -- including respectable Dutch people!

FYI, EDF is the world's largest electricity producer. It produces twice more electricity than the second producer in the world -- a Japanese firm. With all the nuclear plants in France that are not currently in use, I have little doubt about how things would end up in a liberalized market in the event of a price war.

Gibt es kein Protektionismus in Deutschland SailorOrion?

Best regards,
Alamo menses
Air Transport Business

User currently offlineSailorOrion From Germany, joined Feb 2001, 2058 posts, RR: 6
Reply 4, posted (12 years 4 weeks 20 hours ago) and read 1326 times:


Hi  Smile Did you get my response to my email about the LH routes?

Of course one would not sell stock at the moment, and I do not say that AF should privatized now, but it is overdue.

There is protecionism in Germany, in some markets even a big one. But it is bad, bad for the customers, bad the the economy and on the long run, bad for the companies as well. If all the nuclears in France become operational and EDF sells electricity at low prices, let them. I will gladly buy it. If German companies go bankrupt because their unit costs is significantly higher, let them. If LH or KL run bad, and some other airline wants to buy them, let them. If DL or CO or BD want to fly LHR-US routes, let them. If Timbuktu airlines wants to fly MUC-FRA, let them (as long as they meet safety standards required by the JAA of course). Protecionism is a leftover of the 19th century, and it is about time to finally get rid of it. The sooner, the better.


User currently offlineLuzezito From Spain, joined May 2001, 269 posts, RR: 0
Reply 5, posted (12 years 4 weeks 20 hours ago) and read 1323 times:

Dear Alain:

You are overreacting in a way that would have never expected after reading your great and reasoned articles in you page.

I am not bashing French national pride at all. There is NOTHING negative in my post Alain. It is obvious (but thanks anyway for trying to make me sound as a "stupid") that now is no time to privatise an airline because of the current stock market situations.

What I intended to say is that while other made the move for privatisation some time ago (under VERY FAVOURABLE circumstances), Air France did not. Why was that? I would really like an answer on this, please.

Air France are doing very well and are a great airline and it is good to have some national pride, as I have mine.

As for EDF, Alain, (since this is not aviation-related, please allow me to switch to your native language and show you what a proud person I am...) nous savons tous les deux que les raisons du monopole de EDF n'ont rien à voir avec la sécurité des centrales nucléaires hors d'usage. Il se fait que j'ai de très bons amis qui travaillent à la centrale nucléaire de Cruas et qui pourraient vous confirmer tout cela. Même si +/- 80% de l'électricité produite en France provient du nucléaire il y a aussi des dizaines de centrales nucléaires dans les pays voisins de la Frances qui elles n'ont pas encore explosé malgré la libéralisation du secteur électrique.

Il y a un orgueuil national plus développé en France qu'ailleurs parce que vous êtes une République centralisée et c'est ce même orgueuil et sentiment d'apartenace à un état nation qui ont abouti à des mouvements comme mai '68 ou la Révolution Française, ce dont vous pouvez et devez être fiers comme citoyens français.

Vos voisins (Angleterre, Belgique, Espagne, Allemagne et même l'Italie) ont une structure plus ou totalement fédéralisée et le sentiment nationel ne peut être que moins fort. C'est dans la logique des choses.

Or, comme tout dans la vie, votre orgueuil national (si seulement tous mes concitoyens pouvaient l'avoir) a des facettes moins positives et dans ce sens je crois que la non privatisation d'AF ou de EDF en sont un exemple clair.

C'est ce que j'ai voulu exprimer Alain, mais vous m'avez sauté droit au cou... Jettez un coup d'oeil sur votre profile, vous serez peut-être surpris.

Bonne journée!

Quoniam Vita Brevis Est, Propera!
User currently offlineKeesje From , joined Dec 1969, posts, RR:
Reply 6, posted (12 years 4 weeks 17 hours ago) and read 1305 times:

The Air France capitalization ranks at the second place in Europe, when it comes to major airlines

Very unimpressive taking into account AF financing & domestic strategy for the last 10 yrs.

In a free boxing game, you can't be safeguarded from receiving blows.

Yes, even if it hurts.

 Big grin

User currently offlineLuzezito From Spain, joined May 2001, 269 posts, RR: 0
Reply 7, posted (12 years 3 weeks 6 days 22 hours ago) and read 1265 times:


What's all your fuss about? Live and let live or send a letter to AF's board of directors instead of posting provocative and rude stuff.

Just my advice. If I was French I would not have liked this.... And of course it hurts, your tone hurts, not what you write.

Quoniam Vita Brevis Est, Propera!
User currently offlineVarig md-11 From France, joined Jul 2000, 1603 posts, RR: 7
Reply 8, posted (12 years 3 weeks 6 days 21 hours ago) and read 1261 times:

Luzezito and SailorOrion

I don't know why on earth Keesje is posting provocative stuff about AF and the french but I think Alain took care of him already....

about EDF privatization : I don't want to find excuses, but to us French, what happened in UK is very revealing (by the way I love the UK and BA Big grin)
the UK rail has been the 1st to be privatized : after many catastrophes and deaths proving the private sector wasn't interested in maintaining rails and installations now the gvt is re-nationalizing !
electricity : dare to deny the UK gvt is concerned about the security at UK nuclear plants and is considering re-taking control of such plants

aside from national pride, which I don't deny, the French have one of the cheapest electricity and a rail network that is working more than fine !!!!
so to be honest the "let do everything" isn't understood and wanted in France even if in the end that will happen

User currently offlineF+ Rouge From France, joined May 2000, 210 posts, RR: 1
Reply 9, posted (12 years 2 weeks 6 days 17 hours ago) and read 1217 times:

@ Luzezito

You wrote: "France is effectively barring the entry of foreign operators by maintaining EDF's (??lactricit?? de France) monopole against EU directives and threats of sanctions."

That is definitely not true. The French government is following the EU directive and 30% of the French electricity market are opened, passing to 33% on January 1st 2003, as required by the European directive. This means that eligibility thresholds will pass from an annual consumption of 16 GWh to 9 GWh.

Third party access to the grid is in fact much more transparent in France than in Spain or Germany where protectionism-oriented legislation prevents real competition on the electricity market.

User currently offlineLj From Netherlands, joined Nov 1999, 4461 posts, RR: 0
Reply 10, posted (12 years 2 weeks 6 days 16 hours ago) and read 1202 times:

Leo van Wijk once said he won't cooperate with AF with unless the AF isn't majority state owned. Looks like a possible AF-KL deal will be delayed a couple of years (allthough I can recall the fact that the EU has a deadline by which the French governement must have sold a certain %).

BTW Alain, Dutch pride doesn't really exist unless off course there's a soccer match or KLM is about to be sold to either the English, the Germans or the French. I'm probably one of the few Dutchmen who doesn't have anything against KLM in the absence of the above mentioned circumstance.


User currently offlineStratofish From Germany, joined Sep 2001, 1053 posts, RR: 5
Reply 11, posted (12 years 2 weeks 6 days 16 hours ago) and read 1193 times:

I don´t like the idea that it´s happening because of protectionism, but as a communist by heart I feel deeply relieved that state owened companies will be arround in Europe for at least a little longer.

I wish all major companies would switch back to being owend and run by the public!

I know many of you disagree but that´s how I feel about it. I hope the french can halt the selling of their companies longer than we were able to.


The Metro might be the Sub(optimal)way
User currently offlineAA717driver From United States of America, joined Feb 2002, 1566 posts, RR: 13
Reply 12, posted (12 years 2 weeks 6 days 13 hours ago) and read 1173 times:

National pride? Everyone should have national pride--it's natural. One should not be blind to their country's faults, but that should not detract from pride in their country or its contributions to the world.

Having said that, Europe HAS to decide if it will be Socialist or Free Market. France just can't seem to cut that socialist umbilical cord. Believe me, it's tempting to go for the Government protection option. The down side is no flexibility on the part of large business.

I think airlines, even in a Free Market environment, cannot adapt quickly enough to ride out cycles in the economy and will continue to alternately reap huge profits followed by huge losses a few years later. The lead time for aircraft acquisition, facility expansion and personel training is too great to adequately plan for in light of the business cycle. Just my opinion, though.TC

FL450, M.85
User currently offlineDonder10 From Canada, joined Oct 2001, 6660 posts, RR: 21
Reply 13, posted (12 years 2 weeks 6 days 9 hours ago) and read 1148 times:

electricity : dare to deny the UK gvt is concerned about the security at UK nuclear plants and is considering re-taking control of such plants
I haven't heard at all that the govt is worried about the security at nuclear plants here.I think some may be worried that if British Energy got into receivership then the nuclear facilities may not be secure.The issues are rather complicated however.

I wonder why AF was never privitised before?Especially when the market was so good.Also,where does the EU stand on this issue?

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