Nomik
Topic Author
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AF/ KL In Serious Financial Trouble

Wed Jan 11, 2012 12:50 pm

The January print edition of www.capital.fr exposes AF's financial dire straits.
It has accumalated debts since March 2009 of over €6.5BN compared with LH's €1.6BN.
AF pilots fly an average of 620HRS P/A versus LH 700HRS P/A and both earn an average of €110K.
EZ pilots fly 800HRS and earn €100K.
AF pilots cost 34% more.
In 2011,AF shareprice has dropped by 70%!.
On European routes,it loses €600M P/A!
The restruction plan by the new CEO,Juniac will be met by strong resistance from powerful unions and if François Hollande wins in May,there will be none.
Last year,LH surpassed AF/KLM in terms of PAX.
The other issue is safety and www.planecrash.info gives AF a massive thumbs down.
IMO,AF must go really upmarket for longhaul and totally downmarket for shorthaul in order to be economically viable.
The other problem is image:AF does not get anybody's rocks off!
CEO Juniac admires SQ and rumour has that it will join SkyTeam this year.
 
rwy04lga
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AF/ KL In Serious Financial Trouble

Wed Jan 11, 2012 1:01 pm

What airline will be joining SkyTeam?
Just accept that some days, you're the pigeon, and other days the statue
 
thegoldenargosy
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AF/ KL In Serious Financial Trouble

Wed Jan 11, 2012 1:08 pm

Quoting rwy04lga (Reply 1):

What airline will be joining SkyTeam?

According to the OP, Singapore Airlines. Does anyone think they'll leave the Star Alliance?
 
babybus
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AF/ KL In Serious Financial Trouble

Wed Jan 11, 2012 1:19 pm

As far as I know France does have employment laws that always favour the employee. However, according to those figures, a revision of salaries in Air France from top to bottom would seem to be the right way forward.

It's not like there aren't thousands of guys out there who want to be pilots or boardroom members.
and with that..cabin crew, seats for landing please.
 
LondonCity
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AF/ KL In Serious Financial Trouble

Wed Jan 11, 2012 1:21 pm

Quoting Nomik (Thread starter):
,AF must go really upmarket for longhaul and totally downmarket for shorthaul in order to be economically viable.

Installing 10-across on its B777s is not the way to go in economy class. Also AF really needs to introduce proper flat-bed seating on its long-haul fleet rather than the current angled version.

KL says it will fit flat bed J seats from 2013 so why cannot AF ?

Article in Dutch language:
http://www.zakenreis.nl/message.php?msgid=5025
 
MCO2BRS
Posts: 361
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AF/ KL In Serious Financial Trouble

Wed Jan 11, 2012 1:24 pm

Do we know how AF's operating costs compare to KL's?

If AF is in as bad a situation as detailed above, what, if anything, have they done to cut costs and stop losing money?

Cheers,

MCO 2 BRS
 
kl911
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AF/ KL In Serious Financial Trouble

Wed Jan 11, 2012 1:31 pm

Quoting Babybus (Reply 3):
As far as I know France does have employment laws that always favour the employee. However, according to those figures, a revision of salaries in Air France from top to bottom would seem to be the right way forward.

It's not like there aren't thousands of guys out there who want to be pilots or boardroom members.

Exactly, employment laws have been hurting French Economy for ages now. One of the reasons why unions are powerfull is that companies surrender too fast in France giving employees whatever they were demanding.

More companies should do what Deawoo did in France after weeks of strikes. They just closed the whole factorie and fired everybody. That would give a message that in crisis you have to surrender pay like everybody else does.
 
jetlag73
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AF/ KL In Serious Financial Trouble

Wed Jan 11, 2012 1:42 pm

IMHO and as a paying passenger and not an armchair CEO, this what I see wrong :
- Flying Blue is (became) a joke
- C is a rip off for the money. Most business travelers I know avoid it
- Y is ...well, on 777, you know...Most leisure travelers I know avoid it
- F is useless (not that I fly F)
- Lounges are a disgrace
- CDG is a mess (this is ADP, but falls on AF somehow)
- and strikes...man....!

If you mix this with the inner staff, unions, and corporate issues, well, sooner than later, the sh...t will hit the fan.

Most of my relations (French) have turned their back on AF, tired.

Maybe they should follow KL example.
Even AZ seems to be changing for the better !
and both are in AFKL group ! Go figure....

C'est bien triste...
 
aaexecplat
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AF/ KL In Serious Financial Trouble

Wed Jan 11, 2012 1:49 pm

I can't speak to AF's financial situation as I don't know enough, but I will say that I would not feel comfortable flying AF with my family given their safety record relative to its peers over the last few years...
 
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Revelation
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AF/ KL In Serious Financial Trouble

Wed Jan 11, 2012 2:02 pm

AF's unions and management both promote the "us vs them" mentality. I would not expect AF to have a strong balance sheet. As soon as it was doing well, the unions would insist on more concessions and chances are management would concede.
Inspiration, move me brightly!
 
Ronaldo747
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AF/ KL In Serious Financial Trouble

Wed Jan 11, 2012 2:17 pm

Quoting thegoldenargosy (Reply 2):
Does anyone think they'll leave the Star Alliance?

SQ just added a 77W in Star Alliance livery, and new, with a custom Star coloured tail, other than their own tail on their older Star Alliance birds. It's a clear statement, I would say ...
 
art
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RE: AF/ KL In Serious Financial Trouble

Wed Jan 11, 2012 2:28 pm

Quoting Babybus (Reply 3):
As far as I know France does have employment laws that always favour the employee. However, according to those figures, a revision of salaries in Air France from top to bottom would seem to be the right way forward.

It's not like there aren't thousands of guys out there who want to be pilots or boardroom members.

France does in my experience harbour some very unrealistic attitudes where the workforce is concerned. The law concerning employment makes redundancy extremely expensive for the employer. The result is that many organisations offer 3 month temporary job contracts which I think can be renewed once after which the person doing the job would be considered a permanent employee. As a consequence many workers find themselves out of a job after 6 months even though ironically both they and the organisation for which they are doing a job would prefer them to continue doing the job they were doing.

Trying to reduce the salaries of 'permanent' employees would, I think, meet with fierce resistance. Air France would need to be threatened with imminent collapse before employees would make significant concessions IMO.

Quoting Nomik (Thread starter):
IMO,AF must go really upmarket for longhaul and totally downmarket for shorthaul in order to be economically viable.

I don't think it is possible for Air France to go downmarket for shorthaul - costs would need to be reduced significantly. I do not think that would be achievable.

[Edited 2012-01-11 06:30:54]
 
PanHAM
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RE: AF/ KL In Serious Financial Trouble

Wed Jan 11, 2012 2:28 pm

I've always had high respect for KL and I never understood why AF and KL teamed up. Kleine Lohn Maatschappij (small wages company) and the featherbedding of the French welfare state simply don't go together.

Quoting Revelation (Reply 9):
AF's unions and management both promote the "us vs them" mentality. I would not expect AF to have a strong balance sheet

right. But as long as this is politically sanctioned what can be done. The way LH handles this in good years is, to split up the profit 3 ways - one third stays in the company for investments, one third is used as boni for all employees and the remaining third is paid out as dividend.

High wages for little work and lots of strikes is a death spiral.
powered by Eierlikör
 
MaverickM11
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RE: AF/ KL In Serious Financial Trouble

Wed Jan 11, 2012 2:42 pm

Quoting LondonCity (Reply 4):
Installing 10-across on its B777s is not the way to go in economy class

Why not? One of AF's prime competitors, EK, does it. So does KL.

Quoting LondonCity (Reply 4):
Also AF really needs to introduce proper flat-bed seating on its long-haul fleet rather than the current angled version.

I thought they adjusted the pitch of their J seat so that it would be lie flat now, rather than angled. I've always enjoyed AF's Y service, but their F/J offerings are simply not competitive, even with some--quelle horreur!--US carriers.

Quoting art (Reply 11):
I don't think it is possible for Air France to go downmarket for shorthaul - costs would need to be reduced significantly. I do not think that would be achievable.

I think there are some efficiencies to be ringed out of their current network--they've started with point-to-point bases in major French cities. Which of course led to strikes by flight attendants because the flying was "too efficient". 
Quoting Nomik (Thread starter):
AF pilots fly an average of 620HRS P/A versus LH 700HRS P/A and both earn an average of €110K.
EZ pilots fly 800HRS and earn €100K.

How does this compare to US carriers, say their partner DL?
E pur si muove -Galileo
 
FlyingHollander
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RE: AF/ KL In Serious Financial Trouble

Wed Jan 11, 2012 2:56 pm

Could someone give a financial comparison of KL and AF (actual numbers)? I always hear that KL is doing a better job but I've never seen a proper comparison.

[Edited 2012-01-11 06:57:05]
If it ain't Dutch, it ain't much.
 
SEPilot
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RE: AF/ KL In Serious Financial Trouble

Wed Jan 11, 2012 3:07 pm

Quoting Nomik (Thread starter):
The other issue is safety and www.planecrash.info gives AF a massive thumbs down.

The problem is that airline travel has become so safe that one crash throws the statistics into a cocked hat. AF has had three high profile crashes in recent history, AF447, the A340 at Toronto (but with no fatalities), and the Concorde. I would exclude the Concorde as a fluke, but the other two do give one cause for concern. But AF is still far, far safer than most airlines were even 30 years ago.
The problem with making things foolproof is that fools are so doggone ingenious...Dan Keebler
 
DALCE
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RE: AF/ KL In Serious Financial Trouble

Wed Jan 11, 2012 3:15 pm

Quoting SEPilot (Reply 15):
The problem is that airline travel has become so safe that one crash throws the statistics into a cocked hat. AF has had three high profile crashes in recent history, AF447, the A340 at Toronto (but with no fatalities), and the Concorde. I would exclude the Concorde as a fluke, but the other two do give one cause for concern. But AF is still far, far safer than most airlines were even 30 years ago.

Still, for the general public this means something like. Air France is bad, they lost 3 big aircraft in less than 10 years. They are not safe enough. I book my trip with LH / LX / IB / BA / EK.
We, as armchair airline-CEO's know slightly better though 
flown: F50,F70,CR1,CR2,CR9,E75,143,AR8,AR1,733,735,736,73G,738,753,744,77W,788,319,320,321,333,AB6.
 
SEPilot
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RE: AF/ KL In Serious Financial Trouble

Wed Jan 11, 2012 3:30 pm

Quoting DALCE (Reply 16):

Still, for the general public this means something like. Air France is bad, they lost 3 big aircraft in less than 10 years. They are not safe enough. I book my trip with LH / LX / IB / BA / EK.

There is another factor, not mentioned yet. My sister lives in Germany and travels a lot. She usually travels by LH but last year booked AF for one flight (I believe it was cheaper and fit her schedule better). Short version, she will never do that again. I believe the flight was delayed or changed, but her big complaint is that NOBODY at AF was the least bit helpful; it was her problem and she should just deal with it. Bad service will alienate passengers faster than just about anything; good service will keep people loyal in spite of problems. Case in point, I just flew to Florida and back on WN between Christmas and New Year's; the final leg of my flight was MDW-BDL and was supposed to get into BDL at 2:20 PM. It actually got in about 9:10 PM because the plane was held up by fog in San Diego. But everyone at WN was courteous, helpful, and informative. I was told exactly what was happening, was kept updated continuously, and the flight crew was profusely apologetic about the delay once we finally boarded. This is one of the reasons I stay loyal to WN.
The problem with making things foolproof is that fools are so doggone ingenious...Dan Keebler
 
krisyyz
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RE: AF/ KL In Serious Financial Trouble

Wed Jan 11, 2012 3:36 pm

Quoting Babybus (Reply 3):
As far as I know France does have employment laws that always favour the employee. However, according to those figures, a revision of salaries in Air France from top to bottom would seem to be the right way forward.

It's not like there aren't thousands of guys out there who want to be pilots or boardroom members.
Quoting kl911 (Reply 6):

Exactly, employment laws have been hurting French Economy for ages now. One of the reasons why unions are powerfull is that companies surrender too fast in France giving employees whatever they were demanding.

More companies should do what Deawoo did in France after weeks of strikes. They just closed the whole factorie and fired everybody. That would give a message that in crisis you have to surrender pay like everybody else does.

Not sure if this is the appropriate forum for this topic, but....

Yes, from "top to bottom", don't only ask concessions from front-line workers while others get paid out big bonuses (I'm not too familiar with AF's situation, just making a comment about the general corporate structure).

I consider KL one of, if not the best airlines to fly TATL and I truly hope AF's situation doesn't change KL's service or prices.

KrisYYZ
 
slider
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RE: AF/ KL In Serious Financial Trouble

Wed Jan 11, 2012 3:38 pm

Throw in the EU's cockamamie envirocultist green tax and it'll get only worse.
 
kl911
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RE: AF/ KL In Serious Financial Trouble

Wed Jan 11, 2012 3:41 pm

Quoting aaexecplat (Reply 8):
I can't speak to AF's financial situation as I don't know enough, but I will say that I would not feel comfortable flying AF with my family given their safety record relative to its peers over the last few years...

You are joking right? Have alook at Avherald and see how often the likes of AA, Qantas and Lufthansa are mentioned there with incidents. Just because an A330 plunged in the ocean for unknown reason you avoid AF?
 
UALWN
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RE: AF/ KL In Serious Financial Trouble

Wed Jan 11, 2012 3:43 pm

Quoting SEPilot (Reply 15):
AF has had three high profile crashes in recent history

One could argue that AA has had four in a similar time span: AA965 in Cali, AA1420 in Little Rock, AA587 over Long Island, and AA331 in Kingston (no loss of life).

Quoting SEPilot (Reply 15):
I would exclude the Concorde as a fluke, but the other two do give one cause for concern.

Again one could argue that all four AA crashes do give one cause for concern. Yet nobody here seems to dispute AA's safety, while every other week there is a post on AF's perceived lack of it. Why is that?
AT7/111/146/Avro/CRJ/CR9/EMB/ERJ/E75/F50/100/L15/DC9/D10/M8X/717/727/737/747/757/767/777/787/AB6/310/32X/330/340/380
 
kl911
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RE: AF/ KL In Serious Financial Trouble

Wed Jan 11, 2012 3:45 pm

Why has the title changed to AF / KL ? Is KL in trouble as well? Dont fforget AF and KLM are two seperate brands under one parent holding.
 
Mir
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RE: AF/ KL In Serious Financial Trouble

Wed Jan 11, 2012 3:46 pm

Quoting MaverickM11 (Reply 13):
Quoting Nomik (Thread starter):
AF pilots fly an average of 620HRS P/A versus LH 700HRS P/A and both earn an average of €110K.
EZ pilots fly 800HRS and earn €100K.

How does this compare to US carriers, say their partner DL?

It's quite low. 800 would be more appropriate - the limit is 1000, but having a high proportion of long-haul flights does tend to drop the average down somewhat.

-Mir
7 billion, one nation, imagination...it's a beautiful day
 
UAL777UK
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RE: AF/ KL In Serious Financial Trouble

Wed Jan 11, 2012 3:49 pm

Quoting MaverickM11 (Reply 13):

Why not? One of AF's prime competitors, EK, does it. So does KL.

Its a bloody nightmare on long haul, end of. I would avoid any carrier promoting 10 across in Y on a 777. You might do it once, but never again.

Quoting Nomik (Thread starter):
CEO Juniac admires SQ and rumour has that it will join SkyTeam this year.

He admires them, does not mean SQ admires him or AF. The chances of of SQ jumping to ST are the same as BD reversing its fortunes and buying IAG group!
 
mikey72
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RE: AF/ KL In Serious Financial Trouble

Wed Jan 11, 2012 3:49 pm

Quoting SEPilot (Reply 15):
. I would exclude the Concorde as a fluke

Ouch...i'm sure you didn't mean it but a 'fluke' is an accidental stroke of luck.

Anyway..I won't start on about Concorde and that day in Paris.
Flying is like sex - I've never had all I wanted but occasionally I've had all I can stand.
 
krisyyz
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RE: AF/ KL In Serious Financial Trouble

Wed Jan 11, 2012 3:54 pm

Quoting kl911 (Reply 20):

You are joking right? Have alook at Avherald and see how often the likes of AA, Qantas and Lufthansa are mentioned there with incidents. Just because an A330 plunged in the ocean for unknown reason you avoid AF?

I personally avoid AF not because of their "high-profile" accidents, but because of the poor customer service that my friends and I have received from them, especially at CDG. As much as the general public doesn't care much about aircraft types, they do care about reputation, and AF doesn't have the best reputation, at least not in Toronto. I definitely accept the fact that some have a drastically different opinion of AF than I do.

KrisYYZ
 
planereality
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RE: AF/ KL In Serious Financial Trouble

Wed Jan 11, 2012 3:57 pm

Quoting Nomik (Thread starter):
In 2011,AF shareprice has dropped by 70%!.

Not neccessarily an indication of the health of a company's balance sheet; greats new maker though
Andiamo!
 
SEPilot
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RE: AF/ KL In Serious Financial Trouble

Wed Jan 11, 2012 3:58 pm

Quoting mikey72 (Reply 25):
Ouch...i'm sure you didn't mean it but a 'fluke' is an accidental stroke of luck.

Luck can be good or bad....
The problem with making things foolproof is that fools are so doggone ingenious...Dan Keebler
 
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EPA001
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RE: AF/ KL In Serious Financial Trouble

Wed Jan 11, 2012 4:00 pm

Quoting FlyingHollander (Reply 14):
Could someone give a financial comparison of KL and AF (actual numbers)? I always hear that KL is doing a better job but I've never seen a proper comparison.

I have some friends working at KLM (AF-KLM  ) and they have told me the same. But hard numbers on that might be very hard to find.

And the fact does not really matter since AF-KLM is one company operating two individual airlines. So the problems at the one will have an influence on the other. And since French laws are part of difficult equation, a solution will not be easy. The company must (and in the end) will do what it takes to turn a negative trend around. Otherwise it is bye-bye AF-KLM. Maybe we will get a BA-Netherlands and a LH-France as successors?  .

[Edited 2012-01-11 08:01:26]
 
mikey72
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RE: AF/ KL In Serious Financial Trouble

Wed Jan 11, 2012 4:03 pm

Quoting SEPilot (Reply 28):
Luck can be good or bad....

Well yes but a 'fluke' generally denotes 'good' or 'advantageous' luck.

Anyway, i'm being pedantic..I know what you meant.
Flying is like sex - I've never had all I wanted but occasionally I've had all I can stand.
 
mikey72
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RE: AF/ KL In Serious Financial Trouble

Wed Jan 11, 2012 4:08 pm

Quoting EPA001 (Reply 29):
Maybe we will get a BA-Netherlands


If BA hadn't cocked up negotiations wanting it all their own way we'd have British Airways-KLM.

Naughty BA !!
Flying is like sex - I've never had all I wanted but occasionally I've had all I can stand.
 
fraapproach
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RE: AF/ KL In Serious Financial Trouble

Wed Jan 11, 2012 4:15 pm

Quoting kl911 (Reply 20):
You are joking right? Have alook at Avherald and see how often the likes of AA, Qantas and Lufthansa are mentioned there with incidents. Just because an A330 plunged in the ocean for unknown reason you avoid AF?

IMHO the number of incident reports on avherald.com doesn´t mean anything and doesn´t allow any conclusions on safety of an airline. If you count the number of reports related to Canada / Canadian carriers on avherald one could mean flying in Canada /with canadian carriers is as unsafe as flying in the Congo. I think the # of reports on avherald has to do with availability of information / information provided by national aviation authorities. I would expect AF to have just as many incidents as the others. They just remain unreported.

[Edited 2012-01-11 08:17:06]
 
MaverickM11
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RE: AF/ KL In Serious Financial Trouble

Wed Jan 11, 2012 4:17 pm

Quoting UALWN (Reply 21):
Again one could argue that all four AA crashes do give one cause for concern. Yet nobody here seems to dispute AA's safety, while every other week there is a post on AF's perceived lack of it. Why is that?

In AF's case put the spotlight on a questionable safety culture

Quoting ual777uk (Reply 24):
Its a bloody nightmare on long haul,

So are fares, so something has to give
E pur si muove -Galileo
 
UALWN
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RE: AF/ KL In Serious Financial Trouble

Wed Jan 11, 2012 4:34 pm

Quoting MaverickM11 (Reply 33):
In AF's case put the spotlight on a questionable safety culture

I would say that the same could be argued about AA, particularly with the Cali and LIttle Rock accidents.
AT7/111/146/Avro/CRJ/CR9/EMB/ERJ/E75/F50/100/L15/DC9/D10/M8X/717/727/737/747/757/767/777/787/AB6/310/32X/330/340/380
 
Cysafan
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RE: AF/ KL In Serious Financial Trouble

Wed Jan 11, 2012 4:56 pm

Quoting Nomik (Thread starter):
The other issue is safety and www.planecrash.info gives AF a massive thumbs down.



Well.. That 's really AF 's weakness.. Poor safety record with an accident occurring every 3-4 years. (Just like the old record of China Airlines) That really discourages people from flying AF for those with the perspective of getting from Point A to B safely.  
Quoting Nomik (Thread starter):
IMO,AF must go really upmarket for longhaul and totally downmarket for shorthaul in order to be economically viable.
The other problem is image:AF does not get anybody's rocks off!

Well.. To be honest AF 's onboard service apart from catering are pretty pathetic. The Business class seats are totally outdated. Airlines like SQ , Delta , Swiss and US already made the effort to upgrade the J class seats to fully-flat concept which is more advanced than angled flat concept and they introduce a better seat configuration.. 1-2-1 instead of 2-3-2 which is pretty cramp for today 's demanding standards. Secondly , AF really needs to improve on it 's IFE options. The AVOD on their aircraft are pretty much a joke compared to the likes of LH and fellow partner KLM who has a superior system compared to it 's partner.

Quoting Nomik (Thread starter):
CEO Juniac admires SQ and rumour has that it will join SkyTeam this year.

Well. I am not surprised. I am sure they are many airline CEOs that admires SQ. SQ is a really well managed airline most of the time and plans every detail pretty well with almost no flaws at all. SQ 's operations are usually behind the scenes where the management team already preset a number of systems to make sure the airline operations goes smoothly without giving the CEO any headaches at all.

As for SQ joining Skyteam this year , I think it 's highly unlikely as SQ will kind of look down on airlines that are not as good as them as SQ is a pretty snobbish airline.
 
Nomik
Topic Author
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RE: AF/ KL In Serious Financial Trouble

Wed Jan 11, 2012 6:20 pm

The man at the helm is not cut out to save AF.
Juniac is an high-flying technocrat but no specialist at running an airline and especially one as troubled as Air France.
 
nyc2theworld
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RE: AF/ KL In Serious Financial Trouble

Wed Jan 11, 2012 6:25 pm

Quoting Cysafan (Reply 35):
Well.. To be honest AF 's onboard service apart from catering are pretty pathetic. The Business class seats are totally outdated. Airlines like SQ , Delta , Swiss and US already made the effort to upgrade the J class seats to fully-flat concept which is more advanced than angled flat concept and they introduce a better seat configuration.. 1-2-1 instead of 2-3-2 which is pretty cramp for today 's demanding standards. Secondly , AF really needs to improve on it 's IFE options. The AVOD on their aircraft are pretty much a joke compared to the likes of LH and fellow partner KLM who has a superior system compared to it 's partner.

I just flew LH in F on a 346 and let me tell you their AVOD is laughable. The responsiveness of the touchscreen is horrible and comparatively few selections to that of a CO 757. While I have not flown AF in any class it would take a lot to be worse than LH. In addition, you cannot use your own headphones on LH in F as they have permanently attached noise-canceling headsets. I much prefer my Bose to what they have.
Always wonderers if this "last and final boarding call" is in fact THE last and final boarding call.
 
airbazar
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RE: AF/ KL In Serious Financial Trouble

Wed Jan 11, 2012 6:32 pm

Quoting DALCE (Reply 16):
Still, for the general public this means something like. Air France is bad, they lost 3 big aircraft in less than 10 years.

I doubt anyone of the general public ever checks an airline's safety before buying a plane ticket, least of all check www.planecrash.info.
 
N14AZ
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RE: AF/ KL In Serious Financial Trouble

Wed Jan 11, 2012 6:55 pm

Quoting kl911 (Reply 20):
Just because an A330 plunged in the ocean for unknown reason you avoid AF

For unknown reasons? Although the final report has not yet been issued I think it's almost clear what happened, or do you prefer to discuss this with Tommytoys?  
 
PezySPU
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RE: AF/ KL In Serious Financial Trouble

Wed Jan 11, 2012 7:24 pm

Quoting aaexecplat (Reply 8):
I can't speak to AF's financial situation as I don't know enough, but I will say that I would not feel comfortable flying AF with my family given their safety record relative to its peers over the last few years...

I wouldn't say AF is less safe than any other major airline. I'd say most of the accidents they had in recent years were bad luck. In other words, it could have happened to any other airline. I seriously doubt AF would save on maintenance and overall safety. Very little airlines do that.

QF is similar, there are all sorts of incidents happening all the time, but they never lost a single aircraft.

Quoting kl911 (Reply 22):
Why has the title changed to AF / KL ? Is KL in trouble as well? Dont fforget AF and KLM are two seperate brands under one parent holding.

Financially, as a group, yes. It is estimated that AF-KL could make a loss of around €300 million in 2011. It has been widely discussed in this thread:

AF/KL Possible Large Operating Loss (by Mortyman Dec 26 2011 in Civil Aviation)

Quoting MaverickM11 (Reply 33):
Quoting ual777uk (Reply 24):
Its a bloody nightmare on long haul,

So are fares, so something has to give

  
 
SEPilot
Posts: 4919
Joined: Sat Dec 30, 2006 10:21 pm

RE: AF/ KL In Serious Financial Trouble

Wed Jan 11, 2012 7:38 pm

Quoting PezySPU (Reply 40):
I wouldn't say AF is less safe than any other major airline. I'd say most of the accidents they had in recent years were bad luck.

Perhaps, but both AF447 and the Toronto A340 seem to have been primarily pilot error, and having two such accidents in such a short time is troubling, especially as there have been no other such accidents by ANY major Western airline in the same period-both appear pretty egregious and indicate lax standards. It is absolutely miraculous that all of the passengers of the A340 got off safely.
The problem with making things foolproof is that fools are so doggone ingenious...Dan Keebler
 
superjeff
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RE: AF/ KL In Serious Financial Trouble

Wed Jan 11, 2012 7:55 pm

Quoting LondonCity (Reply 4):
Installing 10-across on its B777s is not the way to go in economy class.
[quote=LondonCity,reply=4]

Agreed. I've personally avoided AF Y to CDG specifically because of that. I'd rather put up with 10 hours in an AA 763 without AVOD, or a flight via IAH (CO/UA), via CLT or PHL (US), or via ORD (AA or CO/UA) or even over Toronto on AC or BA via London to avoid 10 across in a 77W.
 
fraapproach
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RE: AF/ KL In Serious Financial Trouble

Wed Jan 11, 2012 8:09 pm

Coming back to the original subject:
What is the real reason for AFs misery, especially to their peers like LH and BA? They could do pretty well considering the following:
- France is the worlds top tourist destination. Paris has a huge O&D market.
- They operate a pretty modern fleet.
- They dont have as much competition on their home turf like BA (e.g. EK, VS, Asian an US carriers, less LCC)
- Does the 'safety issue' really impact their loads? I would assume their loads are on par with their peers.

I think they must have a higher cost base and attract a lower yielding traffic to fill their seats. The latter may have to do with poor service levels and a discount in pricing they may need to make due to the 'safety issues' in order to attract pax. It may also be related to poor fuel hedging.

As much as I remember AF has a history of being unprofitable with some really bad years in the 90s where the company was on the brink of bankruptcy.

Any ideas whats going wrong with them?
 
1stfl94
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RE: AF/ KL In Serious Financial Trouble

Wed Jan 11, 2012 8:26 pm

I think AF need to take a look at some of the activities on the side and start seriously looking at these. Dedicate services might mean you can fly non stop to Pointe Noire but is it cheaper than flying an A330 via another point or finding a local partner to transder? I know AF has historical connections in the Caribbean and Indian Ocean but is flying a 470 seat 77W there profitable, especially when you consider that BA flies to equivalent destinations with a 275 seat 772 with three times as much business capacity. There are also a lot of things that are very high cost at AF, for example those very attractive Christian Lacroix uniforms apparently cost around $600 per wearer, you can understand why the US carriers make their staff wear polyster! Small point buts details like this that need looking at.

For transfer passengers, CDG has a pretty horrendous reputation which AMS is generally considered much better which might be part of the reason why KLM doesn't seem to be suffering as much. Something that AF and ADP need to work hard on.
 
TGV
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RE: AF/ KL In Serious Financial Trouble

Wed Jan 11, 2012 8:30 pm

Quoting ual777uk (Reply 24):
Its a bloody nightmare on long haul, end of. I would avoid any carrier promoting 10 across in Y on a 777. You might do it once, but never again

I totally agree.
        

And now many leisure travellers know this and, except those looking for the cheapest prices, avoid AF as much as possible (probably even when flights are not operated by 777, 330/340/380 remain perfectly OK in Y in my opinion).
Avoid 777 with 3-4-3 config in Y ! They are real sardine cans. (AF/KL for example)
 
airproxx
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RE: AF/ KL In Serious Financial Trouble

Wed Jan 11, 2012 8:34 pm

Quoting Nomik (Thread starter):
The January print edition of www.capital.fr exposes AF's financial dire straits.
It has accumalated debts since March 2009 of over €6.5BN compared with LH's €1.6BN.
AF pilots fly an average of 620HRS P/A versus LH 700HRS P/A and both earn an average of €110K.
EZ pilots fly 800HRS and earn €100K.
AF pilots cost 34% more.
In 2011,AF shareprice has dropped by 70%!.
On European routes,it loses €600M P/A!
The restruction plan by the new CEO,Juniac will be met by strong resistance from powerful unions and if François Hollande wins in May,there will be none.
Last year,LH surpassed AF/KLM in terms of PAX.
The other issue is safety and www.planecrash.info gives AF a massive thumbs down.
IMO,AF must go really upmarket for longhaul and totally downmarket for shorthaul in order to be economically viable.
The other problem is image:AF does not get anybody's rocks off!
CEO Juniac admires SQ and rumour has that it will join SkyTeam this year.

Talking about pilots salaries @ AF is clearly a bit od nonsense...

AF Pilots fly less than others? Why?? Because AF network has been cut drastically over the last two years...
Ask to an AF pilots if HE wants to fly more, he's gonna reply, YES!! PLEASE!!
This is clearly not the biggest issue @ AF.
The main problem comes from the Number of employees versus the Number of Flying people.
This ratio is definitely too low, an average of 40% is a good figure for an healthy airline.
AF is running a current rough 30%, with a giant amount of office dudes working for nothing...
Like a friend said a few times ago: " AF's problem?... Too many chiefs for too less Indians!"....

That speaks for itself..

AF must revise its administration staff number of employees in order to get a better financial shape...
If you can meet with triumph and disaster, and treat those two impostors just the same
 
ual747den
Posts: 1472
Joined: Sat Dec 27, 2003 1:29 pm

RE: AF/ KL In Serious Financial Trouble

Wed Jan 11, 2012 8:39 pm

Quoting Nomik (Thread starter):
CEO Juniac admires SQ and rumour has that it will join SkyTeam this year.

I think this statement alone disqualifies everything else you wrote because it is so completely false! Where did you come up with such a laughable statement? STAR would have to completely fall apart before SQ would join SkyTeam! Why would a world class airline just leave the leading alliance for something else? I really hope you are not trying to say that SQ is so impressed by AF that they would jump ship for SK because of them!

Quoting thegoldenargosy (Reply 2):
According to the OP, Singapore Airlines. Does anyone think they'll leave the Star Alliance?

NO
/// UNITED AIRLINES
 
Nomik
Topic Author
Posts: 52
Joined: Wed Dec 14, 2011 8:00 am

RE: AF/ KL In Serious Financial Trouble

Wed Jan 11, 2012 8:42 pm

Quoting fraapproach (Reply 43):
Paris has a huge O&D market.

What is O&D?
Many thanks!
 
varig md-11
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Joined: Mon Jul 17, 2000 7:17 pm

RE: AF/ KL In Serious Financial Trouble

Wed Jan 11, 2012 8:49 pm

Quoting fraapproach (Reply 43):
I think they must have a higher cost base and attract a lower yielding traffic to fill their seats.

Correct! labour cost and lack of productivity is THE big itch: workforce 20% less productive compared to LH

Quoting fraapproach (Reply 43):
The latter may have to do with poor service levels and a discount in pricing they may need to make due to the 'safety issues' in order to attract pax.

I don't think so...contrarily to us the general public doesn't remember YYZ crash and considers Concorde as horrific chain of event not related to carelessness or anything

Quoting fraapproach (Reply 43):
It may also be related to poor fuel hedging.

Correc! they lost big €€ on fuel hedging

Quoting fraapproach (Reply 43):
As much as I remember AF has a history of being unprofitable with some really bad years in the 90s where the company was on the brink of bankruptcy.

AF staff were not so long ago "covered" by the state....the circus could go on and taxpayers would sponge the excentricities: bad habits are engraved in some practices

Quoting 1stfl94 (Reply 44):
I know AF has historical connections in the Caribbean and Indian Ocean but is flying a 470 seat 77W there profitable, especially when you consider that BA flies to equivalent destinations with a 275 seat 772 with three times as much business capacity.

No, you cannot compare: French west indies and Reunion are French departement with the € and everything like in metropolitan France unlike ex-UK territories.
Customers are different too: its VFR at 90% on our side, therefore the 77W COI config which is a huge eco 77W

Quoting 1stfl94 (Reply 44):
There are also a lot of things that are very high cost at AF, for example those very attractive Christian Lacroix uniforms apparently cost around $600 per wearer

That's one big problem: these "hidden" costs that add up to generate a river of money flowing out of the bank account...why can't AF recruit a cost killer? a lot has to be done.....
AF TW AA NW DL UA CO BA U2 TP UX LH SK AZ MP KL SN VY HV LS SS TK SQ PC RG IW SE LI TN

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