dirk88
Topic Author
Posts: 65
Joined: Mon Jun 27, 2016 2:10 pm

Air France loses money on 33% of longhaul flights

Mon Dec 26, 2016 9:57 pm

Manually translated from Dutch (quick & dirty), couldn't find an English source

https://www.upinthesky.nl/2016/12/26/ee ... ance-geld/

One in three long haul flights are lossmakers

The French state wants to give Air France tax benefits to make the company profitable again. The minister of Transportation said so in the French newspaper La Tribune.

Long Haul
Of all long-haul flights, the company is losing money on 35% of them, according to minister Alain Vidalies. He says it's a good idea to make those routes profitable again: "Air France currently profits, just like the other airlines, of low oil prices. Despite the beneficial circumstances there are many lossmaking routes. The plan for a new airline, Boost, which could offer these routes with a lower cost base is a smart plan, according to Vidalies. He adds that the market is changing rapidly and hopes that management and unions quickly find common ground.

Benefits
The minister says that the state has already contributed 130 million euros to Air France through tax benefits. Half of which is due to a tax advantage rule on competivity, the other half through lowering civil aviation taxes. "All companies can profit from it, but due to it's size Air France is the biggest benificiary.

Vidalies says he is a supporter of state support of the airline. In a letter, the French government told Air France that if they manage to become more profitable, the government will also contribute more. "It must be within proportion.", says the minister. "It cannot be the case that Air France makes very small steps while the government is substantially increasing their contribution. The most important method to give benefits to Air France is by setting a maximum amount of tax per airline.

If employees, shareholders and the French state together want to decrease spending by 500 million in 2020, this is on the table, according to the minister.
 
User avatar
LAXintl
Posts: 24063
Joined: Wed May 24, 2000 12:12 pm

Re: Air France loses money on 33% of longhaul flights

Mon Dec 26, 2016 10:04 pm

1 out 3 is not bad. Its actually good.

Its extremely common that many routes are loss making on standalone basis.

Most airlines these days look at a routes larger contribution to the network (connection feed, revenue, marketshare, prestige etc) when judging viability of route.
Heck I even know airlines where bulk of their longaul flying is loss making but provide incredible benefit via feed for their short/medium routes allowing much higher frequency, marketshare and profitability on such short/medium flying as result.
From the desert to the sea, to all of Southern California
 
User avatar
SR380
Posts: 780
Joined: Fri Sep 20, 2013 2:57 pm

Re: Air France loses money on 33% of longhaul flights

Mon Dec 26, 2016 10:06 pm

Is that even legal? In Switzerland we had to change all of our company taxes to match EU rules whiles we are not part of it. How come Air France, wich is privately owned, can benefit from such arrangements?
 
StTim
Posts: 3552
Joined: Thu Aug 08, 2013 7:39 am

Re: Air France loses money on 33% of longhaul flights

Mon Dec 26, 2016 10:10 pm

Because the French refuse to play by the rules they define. I know this is a sweeping generalisation but there is a good nugget of truth in there.
 
User avatar
mercure1
Posts: 4593
Joined: Sun Jul 13, 2008 5:13 am

Re: Air France loses money on 33% of longhaul flights

Mon Dec 26, 2016 10:16 pm

Not sure where the news is here. Regarding loss making routes, I think this is pretty normal.

AF also in unique situation that it operates many social routes particularly to Africa and colonial markets to maintain link to metropolitan France.

SR380 wrote:
Is that even legal? In Switzerland we had to change all of our company taxes to match EU rules whiles we are not part of it. How come Air France, wich is privately owned, can benefit from such arrangements?

Whats illegal with changing broader corporate and aviation regimes? As article states:

"All companies can profit from it, but due to it's size Air France is the biggest beneficiary."

Also remember French state is a key shareholder in AFKL, so it can has many levers to influence and assist company if it desires. Plus remember much of corporate France is reliant on state for various things such as contracts, land leases, regulatory approvals, etc.
mercure f-wtcc
 
simairlinenet
Posts: 793
Joined: Sat Oct 29, 2005 2:24 am

Re: Air France loses money on 33% of longhaul flights

Mon Dec 26, 2016 10:19 pm

LAXintl wrote:
1 out 3 is not bad. Its actually good.

Its extremely common that many routes are loss making on standalone basis.

Agreed. In addition, if you have no unprofitable routes, you likely also have no investments in the future.
 
vinniewinnie
Posts: 722
Joined: Mon Nov 28, 2005 4:23 am

Re: Air France loses money on 33% of longhaul flights

Mon Dec 26, 2016 10:27 pm

mercure1 wrote:
Not sure where the news is here. Regarding loss making routes, I think this is pretty normal.

AF also in unique situation that it operates many social routes particularly to Africa and colonial markets to maintain link to metropolitan France.


Do u a have proof for what you are saying?

I can tell you that as a heavy user of Air France to Subsaharan Africa, flights are neither empty nor cheap.

And what might be backwaters for you are actually oil routes or military routes. (And agreed some oil routes have suffered recently)

I hope you can expand on what you are saying!
 
Varsity1
Posts: 2102
Joined: Mon May 02, 2016 4:55 am

Re: Air France loses money on 33% of longhaul flights

Mon Dec 26, 2016 10:28 pm

Breaking even isn't good either. Airlines need to earn a firm specific risk premium in line with the overall financial markets. The only ones that currently do are the US carriers. Heavy consolidation is needed in europe.
"PPRuNe will no longer allow discussions regarding Etihad Airlines, its employees, executives, agents, or other representatives. Such threads will be deleted." - ME3 thug airlines suing anyone who brings negative information public..
 
User avatar
PatrickZ80
Posts: 4045
Joined: Tue Jul 13, 2010 5:33 am

Re: Air France loses money on 33% of longhaul flights

Mon Dec 26, 2016 10:55 pm

Varsity1 wrote:
Breaking even isn't good either. Airlines need to earn a firm specific risk premium in line with the overall financial markets. The only ones that currently do are the US carriers. Heavy consolidation is needed in europe.


A typically American reaction. If you were from anywhere in Europe you'd know that consolidation doesn't work in Europe, specially for flag carriers like Air France. People need to associate them with their countries. The European aviation market is just different from the American aviation market.

Let's imagine the USA and Canada would become one single market, allowing Canadian airlines to operate in and out of the USA and the other way around. Would you think of Air Canada for a direct flight between Europe and the USA? No, you wouldn't. You'd feel like Air Canada doesn't belong in the USA, they belong in Canada. Well, that's the same thing for European countries and their airlines. Air France belongs in France, any base for them outside France wouldn't work because it's not France. KLM couldn't possibly have a base outside the Netherlands and Lufthansa only works in Germany. That's what I mean consolidation isn't possible, people just wouldn't accept it.

It is possible however on smaller airlines that are not flag carriers. They've got less association with their countries, for that reason Ryanair is able to open bases all over Europe. Ryanair may be Irish, but they're not the flag carrier of Ireland. Aer Lingus is, therefor Aer Lingus is much stronger associated with Ireland than Ryanair.
 
User avatar
Siren
Posts: 775
Joined: Sun Aug 20, 2006 6:50 am

Re: Air France loses money on 33% of longhaul flights

Mon Dec 26, 2016 11:13 pm

LAXintl wrote:
1 out 3 is not bad. Its actually good.

Its extremely common that many routes are loss making on standalone basis.


Exactly! There's also tertiary and ancillary benefits on many flights which are "loss making" on the 'main' bottom line - but provide benefits elsewhere in the balance sheet. For example, when it comes to brokering long term fuel contracts for the entire fleet and locking prices in, that is heavily determined by the expected volume of fuel to be used. If they were to suddenly cut 33% of long haul flying, that's 33% (in theory) less fuel usage - could be more, or less, depending on the specific route, but here's the rub: you no longer get the same economy of scale benefit. You're buying less fuel overall, and at a higher cost per unit. This has ramifications throughout the entire operation.

Further ancillary benefits are related to matters of "prestige" - AF is the flag carrier, and they represent the empire in the colonies. Whether or not they are profitable on those runs (and I imagine most of them are, and wildly so, if not just on pax revenues, but cargo especially), it is an important feather in their cap.

Most of the routes that are likely to not be profitable would be the heavily trafficked routes with stiff competition - ie: CDG-JFK, CDG-HKG, CDG-PEK, etc etc. It's going to be on those runs that pax yields are lower in general, due to a general oversupply of seats on the market, and airlines slashing their prices to fill the seats. This is why planes like the 787 have been such a game changer - enabling airlines to right-size their long haul ops, and pare down overcapacity. Competition for cargo on those trunk routes is also very stiff... If we had a breakdown of exactly which long haul routes are loss makers for them, I think a lot of eyebrows would be raised.

Other routes likely to be at break-even or even loss-making status would be the Tahiti flights, and the Reunion flights - with competition from Air Tahiti Nui and Air Austral respectively, and very small markets. The saving grace on those would almost certainly be cargo revenue.
 
User avatar
Aesma
Posts: 12277
Joined: Sat Nov 14, 2009 6:14 am

Re: Air France loses money on 33% of longhaul flights

Mon Dec 26, 2016 11:22 pm

Varsity1 wrote:
Breaking even isn't good either. Airlines need to earn a firm specific risk premium in line with the overall financial markets. The only ones that currently do are the US carriers. Heavy consolidation is needed in europe.


The overall financial market is completely disconnected from reality, there is no reason to try and follow its lead. Unless you want to crash with it, that is.
New Technology is the name we give to stuff that doesn't work yet. Douglas Adams
 
mham001
Posts: 5677
Joined: Thu Feb 03, 2005 4:52 am

Re: Air France loses money on 33% of longhaul flights

Mon Dec 26, 2016 11:25 pm

PatrickZ80 wrote:
Varsity1 wrote:
Breaking even isn't good either. Airlines need to earn a firm specific risk premium in line with the overall financial markets. The only ones that currently do are the US carriers. Heavy consolidation is needed in europe.


A typically American reaction. If you were from anywhere in Europe you'd know that consolidation doesn't work in Europe, specially for flag carriers like Air France. People need to associate them with their countries. The European aviation market is just different from the American aviation market.

Let's imagine the USA and Canada would become one single market, allowing Canadian airlines to operate in and out of the USA and the other way around. Would you think of Air Canada for a direct flight between Europe and the USA? No, you wouldn't. You'd feel like Air Canada doesn't belong in the USA, they belong in Canada. Well, that's the same thing for European countries and their airlines. Air France belongs in France, any base for them outside France wouldn't work because it's not France. KLM couldn't possibly have a base outside the Netherlands and Lufthansa only works in Germany. That's what I mean consolidation isn't possible, people just wouldn't accept it.

It is possible however on smaller airlines that are not flag carriers. They've got less association with their countries, for that reason Ryanair is able to open bases all over Europe. Ryanair may be Irish, but they're not the flag carrier of Ireland. Aer Lingus is, therefor Aer Lingus is much stronger associated with Ireland than Ryanair.


A typical European reaction, telling people what they "need". Who said airline customers "need" a country carrier? Supposedly, your are one market now, isn't that the great tout of the European Union? Are you really claiming that Europeans would simply stop flying if their airplanes were a different livery? If the pilots wore different color uniforms? What will Italians do when Alitalia is sold to Arabs?
Last edited by mham001 on Mon Dec 26, 2016 11:30 pm, edited 2 times in total.
 
User avatar
mercure1
Posts: 4593
Joined: Sun Jul 13, 2008 5:13 am

Re: Air France loses money on 33% of longhaul flights

Mon Dec 26, 2016 11:26 pm

vinniewinnie wrote:
mercure1 wrote:
Not sure where the news is here. Regarding loss making routes, I think this is pretty normal.

AF also in unique situation that it operates many social routes particularly to Africa and colonial markets to maintain link to metropolitan France.


Do u a have proof for what you are saying?

I can tell you that as a heavy user of Air France to Subsaharan Africa, flights are neither empty nor cheap.

And what might be backwaters for you are actually oil routes or military routes. (And agreed some oil routes have suffered recently)

I hope you can expand on what you are saying!


It is well know that much of Africa, colonial or simply put historic Francophone routes are heavy loss making. AF management has stated this many times. I've witness this in management presentations and staff news periodicals.

Heavy loads and higher fares hide the fact of very high cost to operate such services.

For instance many AF Africa cities have large number of AF ground staff members; 20-40+ for airport and city office staff as local agents cannot be relied upon. There is high cost for security in many markets (either local or French expats including security agents onboard), there are issues with fuel which leads to high cost or need to ferry fuel from France. There is high cost for crews for things like their hotel, food, security and even pay as some routes earn supplemental due perceived lack of safety.

AF over years has attempted to manage losses via various methods such as aircraft capacity adjustments (remember the A319 "Dedicate" service), plus they have also tried to cut markets entirely such as Tahiti in 2013 and 2015 but faced protest.

Its been stated that French government applies strong pressure on AF to retain such services to provide national link. For instance on Carribean route which AF wanted to drop few years back due heavy competition from people like Air Carabais and Corsair, French government stated it would remove French state travel contracts in other markets from AF as retaliation. So airline kept the route.

It is blatantly clear an Air France route map flown strictly based on commercial lines would look different than the route map we see today.
Certainly there is no guarantee or even need for all routes will make money, but AF does have unique position of having been stuck with historic it must maintain.
mercure f-wtcc
 
User avatar
Aesma
Posts: 12277
Joined: Sat Nov 14, 2009 6:14 am

Re: Air France loses money on 33% of longhaul flights

Mon Dec 26, 2016 11:40 pm

StTim wrote:
Because the French refuse to play by the rules they define. I know this is a sweeping generalisation but there is a good nugget of truth in there.


There is nothing illegal here, and the rules are perfectly followed.

The CICE is a tax reduction that benefits 100% of French based businesses. It's basically a lowering of the French payroll tax. 70 millions € in the case of AF.

Then another tax didn't even exist in some other countries : connecting passengers don't pay the civil aviation tax anymore : 60 millions € for AF.

What the minister is now talking about is again a tax that doesn't necessarily exist elsewhere, the "Chirac tax" that finances UNITAID. That tax has a ceiling as it's supposed to finance UNITAID to the tune of 200 millions per year, and it is now bringing in more money than that, and that's expected to grow with traffic. Currently the surplus money was just getting into the public coffers, but an amendment has been passed to redistribute it to the aviation sector, so all airlines are benefiting, not just AF.
New Technology is the name we give to stuff that doesn't work yet. Douglas Adams
 
User avatar
Aesma
Posts: 12277
Joined: Sat Nov 14, 2009 6:14 am

Re: Air France loses money on 33% of longhaul flights

Mon Dec 26, 2016 11:43 pm

mham001 wrote:
A typical European reaction, telling people what they "need". Who said airline customers "need" a country carrier? Supposedly, your are one market now, isn't that the great tout of the European Union? Are you really claiming that Europeans would simply stop flying if their airplanes were a different livery? If the pilots wore different color uniforms? What will Italians do when Alitalia is sold to Arabs?


Can you explain why all your airlines have gone through bankruptcy multiple times ? Doesn't the US taxpayer deserve losers to fail instead of picking up the tab ?
New Technology is the name we give to stuff that doesn't work yet. Douglas Adams
 
BestWestern
Posts: 8348
Joined: Fri Sep 08, 2000 8:46 pm

Re: Air France loses money on 33% of longhaul flights

Mon Dec 26, 2016 11:44 pm

When I hear of airlines dropping "profitable" routes (EWR-OSL for example), I always think that airlines don't drop profitable routes.
Greetings from Hong Kong.... a subsidiary of China Inc.
 
Varsity1
Posts: 2102
Joined: Mon May 02, 2016 4:55 am

Re: Air France loses money on 33% of longhaul flights

Tue Dec 27, 2016 12:00 am

PatrickZ80 wrote:
Varsity1 wrote:
Breaking even isn't good either. Airlines need to earn a firm specific risk premium in line with the overall financial markets. The only ones that currently do are the US carriers. Heavy consolidation is needed in europe.


A typically American reaction. If you were from anywhere in Europe you'd know that consolidation doesn't work in Europe, specially for flag carriers like Air France. People need to associate them with their countries. The European aviation market is just different from the American aviation market.

Let's imagine the USA and Canada would become one single market, allowing Canadian airlines to operate in and out of the USA and the other way around. Would you think of Air Canada for a direct flight between Europe and the USA? No, you wouldn't. You'd feel like Air Canada doesn't belong in the USA, they belong in Canada. Well, that's the same thing for European countries and their airlines. Air France belongs in France, any base for them outside France wouldn't work because it's not France. KLM couldn't possibly have a base outside the Netherlands and Lufthansa only works in Germany. That's what I mean consolidation isn't possible, people just wouldn't accept it.

It is possible however on smaller airlines that are not flag carriers. They've got less association with their countries, for that reason Ryanair is able to open bases all over Europe. Ryanair may be Irish, but they're not the flag carrier of Ireland. Aer Lingus is, therefor Aer Lingus is much stronger associated with Ireland than Ryanair.


It "doesn't work" because you don't want it to. Europeans hide behind medieval tribalism and call it "culture". You don't need AF, you don't need Lufthansa, you don't need BA. Look at the U.S. 50 years ago. Our perennial heavy hitters (Pan AM, TWA, Eastern) are all gone, replaced by even larger more successful airlines that fit the business climate of today.

Until Europe can get over themselves and let these dinosaurs sink or swim, there won't be any improvement. They make the market less efficient and worse.
"PPRuNe will no longer allow discussions regarding Etihad Airlines, its employees, executives, agents, or other representatives. Such threads will be deleted." - ME3 thug airlines suing anyone who brings negative information public..
 
User avatar
piedmontf284000
Posts: 427
Joined: Wed Jun 15, 2016 12:00 pm

Re: Air France loses money on 33% of longhaul flights

Tue Dec 27, 2016 12:02 am

Aesma wrote:
mham001 wrote:
A typical European reaction, telling people what they "need". Who said airline customers "need" a country carrier? Supposedly, your are one market now, isn't that the great tout of the European Union? Are you really claiming that Europeans would simply stop flying if their airplanes were a different livery? If the pilots wore different color uniforms? What will Italians do when Alitalia is sold to Arabs?


Can you explain why all your airlines have gone through bankruptcy multiple times ? Doesn't the US taxpayer deserve losers to fail instead of picking up the tab ?


American taxpayers do not 'pick up the tab'. The creditors are the ones that lose out. The employees especially get the shaft in a bankruptcy followed closely by suppliers. The taxpayer doesn't get billed for a privately funded company protecting their assets.

PatrickZ80 wrote:
Varsity1 wrote:
Breaking even isn't good either. Airlines need to earn a firm specific risk premium in line with the overall financial markets. The only ones that currently do are the US carriers. Heavy consolidation is needed in europe.


A typically American reaction. If you were from anywhere in Europe you'd know that consolidation doesn't work in Europe, specially for flag carriers like Air France. People need to associate them with their countries. The European aviation market is just different from the American aviation market.

Let's imagine the USA and Canada would become one single market, allowing Canadian airlines to operate in and out of the USA and the other way around. Would you think of Air Canada for a direct flight between Europe and the USA? No, you wouldn't. You'd feel like Air Canada doesn't belong in the USA, they belong in Canada. Well, that's the same thing for European countries and their airlines. Air France belongs in France, any base for them outside France wouldn't work because it's not France. KLM couldn't possibly have a base outside the Netherlands and Lufthansa only works in Germany. That's what I mean consolidation isn't possible, people just wouldn't accept it.

It is possible however on smaller airlines that are not flag carriers. They've got less association with their countries, for that reason Ryanair is able to open bases all over Europe. Ryanair may be Irish, but they're not the flag carrier of Ireland. Aer Lingus is, therefor Aer Lingus is much stronger associated with Ireland than Ryanair.


And some Europeans still don't understand why the majority of people in Britain voted to leave the Europe Union.
 
Varsity1
Posts: 2102
Joined: Mon May 02, 2016 4:55 am

Re: Air France loses money on 33% of longhaul flights

Tue Dec 27, 2016 12:02 am

Aesma wrote:
mham001 wrote:
A typical European reaction, telling people what they "need". Who said airline customers "need" a country carrier? Supposedly, your are one market now, isn't that the great tout of the European Union? Are you really claiming that Europeans would simply stop flying if their airplanes were a different livery? If the pilots wore different color uniforms? What will Italians do when Alitalia is sold to Arabs?


Can you explain why all your airlines have gone through bankruptcy multiple times ? Doesn't the US taxpayer deserve losers to fail instead of picking up the tab ?


Because their business models sucked, just like the european legacies do now. They have since been allowed to consolidate and rearrange assets in a much more efficient manner, the whole purpose of bankruptcy. The taxpayer hasn't "picked up the tab". That's a european thing. In the U.S. banks, shareholders, creditors and employees take the fall when businesses fail.

ETA: They did fail, look at the list of airlines that are gone: AirTran, Northwest, Continental, TWA, US Airways, Pan Am, Braniff, Eastern, Piedmont, PSA, Ozark etc..
Last edited by Varsity1 on Tue Dec 27, 2016 12:16 am, edited 1 time in total.
"PPRuNe will no longer allow discussions regarding Etihad Airlines, its employees, executives, agents, or other representatives. Such threads will be deleted." - ME3 thug airlines suing anyone who brings negative information public..
 
DfwRevolution
Posts: 9285
Joined: Sat Jan 09, 2010 7:31 pm

Re: Air France loses money on 33% of longhaul flights

Tue Dec 27, 2016 12:04 am

Aesma wrote:
mham001 wrote:
A typical European reaction, telling people what they "need". Who said airline customers "need" a country carrier? Supposedly, your are one market now, isn't that the great tout of the European Union? Are you really claiming that Europeans would simply stop flying if their airplanes were a different livery? If the pilots wore different color uniforms? What will Italians do when Alitalia is sold to Arabs?


Doesn't the US taxpayer deserve losers to fail instead of picking up the tab ?


Uh, yes? Taxpayers don't "pick-up the tab" for anyone going through Chapter 11 bankruptcy.
I have a three post per topic limit. You're welcome to have the last word.
 
Varsity1
Posts: 2102
Joined: Mon May 02, 2016 4:55 am

Re: Air France loses money on 33% of longhaul flights

Tue Dec 27, 2016 12:10 am

Aesma wrote:
Varsity1 wrote:
Breaking even isn't good either. Airlines need to earn a firm specific risk premium in line with the overall financial markets. The only ones that currently do are the US carriers. Heavy consolidation is needed in europe.


The overall financial market is completely disconnected from reality, there is no reason to try and follow its lead. Unless you want to crash with it, that is.


You are clearly clueless as to what a risk premium is.

If I have $1 to invest in an airline or a water company, which do you believe is more likely to fail and lose my money? The airline. Airlines are risky businesses. As a result I expect a higher return from the airline on my investment (Ie: $1.50 back in on year as opposed to $1.10 from the stable and safe water company.

If airlines can't meet this premium they will not attract capital in the markets and die off. Hence why these Euro carriers need to be propped up constantly.

If the weaker euro legacies were allowed to die off (AF, Alitalia, Air Berlin) and the reduced competition allow the remainder to increase prices and generate a higher return. Those remaining would become self sustaining businesses in the capital markets and no longer require infusions.
"PPRuNe will no longer allow discussions regarding Etihad Airlines, its employees, executives, agents, or other representatives. Such threads will be deleted." - ME3 thug airlines suing anyone who brings negative information public..
 
User avatar
Aesma
Posts: 12277
Joined: Sat Nov 14, 2009 6:14 am

Re: Air France loses money on 33% of longhaul flights

Tue Dec 27, 2016 12:38 am

I'm not clueless, I'm saying I disagree with that way of seeing the world through crazy financial markets, and if populism is gaining ground in Europe it's in part because people disagree too. In the US you don't have any political party telling people it's possible to do things differently so you end up electing a robber baron to screw you more.
New Technology is the name we give to stuff that doesn't work yet. Douglas Adams
 
UltimoTiger777
Posts: 458
Joined: Sun Jul 17, 2016 5:19 pm

Re: Air France loses money on 33% of longhaul flights

Tue Dec 27, 2016 12:59 am

Varsity1 wrote:

It "doesn't work" because you don't want it to. Europeans hide behind medieval tribalism and call it "culture". You don't need AF, you don't need Lufthansa, you don't need BA. Look at the U.S. 50 years ago. Our perennial heavy hitters (Pan AM, TWA, Eastern) are all gone, replaced by even larger more successful airlines that fit the business climate of today.

Until Europe can get over themselves and let these dinosaurs sink or swim, there won't be any improvement. They make the market less efficient and worse.


Ummmmm.........BA is a profitable, larger, successful airline. Ain't no bailouts of airlines here in the UK.
 
mham001
Posts: 5677
Joined: Thu Feb 03, 2005 4:52 am

Re: Air France loses money on 33% of longhaul flights

Tue Dec 27, 2016 1:27 am

UltimoTiger777 wrote:
Varsity1 wrote:

It "doesn't work" because you don't want it to. Europeans hide behind medieval tribalism and call it "culture". You don't need AF, you don't need Lufthansa, you don't need BA. Look at the U.S. 50 years ago. Our perennial heavy hitters (Pan AM, TWA, Eastern) are all gone, replaced by even larger more successful airlines that fit the business climate of today.

Until Europe can get over themselves and let these dinosaurs sink or swim, there won't be any improvement. They make the market less efficient and worse.


Ummmmm.........BA is a profitable, larger, successful airline. Ain't no bailouts of airlines here in the UK.


Not quite.

http://www.tourmag.com/Subsidies-the-st ... 67729.html
 
User avatar
BobPatterson
Posts: 3416
Joined: Thu Nov 26, 2015 7:18 am

Re: Air France loses money on 33% of longhaul flights

Tue Dec 27, 2016 1:41 am

Aesma wrote:
I'm not clueless, I'm saying I disagree with that way of seeing the world through crazy financial markets, and if populism is gaining ground in Europe it's in part because people disagree too. In the US you don't have any political party telling people it's possible to do things differently so you end up electing a robber baron to screw you more.


Aesma, I'm trying to understand what you really are driving at.

How are the financial markets "crazy" with respect to the airlines or aviation industry? Are you trying to say that the airlines can/should operate outside "normal" market forces?

What kinds of things do you think the American political parties should be telling the people? How are the people presently being "screwed?"

Please calm down a bit and leave terms such as "robber baron" out of the discussion.

Thank you. I look forward to your complete responses.
Facts are fragile things. Treat them with care. Sources are important. Alternative facts do not exist.
 
User avatar
kitplane01
Posts: 1410
Joined: Thu Jun 16, 2016 5:58 am

Re: Air France loses money on 33% of longhaul flights

Tue Dec 27, 2016 1:57 am

PatrickZ80 wrote:

A typically American reaction. If you were from anywhere in Europe you'd know that consolidation doesn't work in Europe, specially for flag carriers like Air France. People need to associate them with their countries. ...
Let's imagine the USA and Canada would become one single market, allowing Canadian airlines to operate in and out of the USA and the other way around. Would you think of Air Canada for a direct flight between Europe and the USA? No, you wouldn't. You'd feel like Air Canada doesn't belong in the USA, they belong in Canada.


I'd buy the cheapest/best airfare. Why would I spend *more* money to fly American Airlines than Air Canada?

Also, why would I feel like "Air Canada does not belong in the US"? My nationalism does not extend to boycotting Canadian companies.

I'd be very surprised if most Europeans feel as you do.
 
IndianicWorld
Posts: 3310
Joined: Mon Jun 04, 2001 11:32 am

Re: Air France loses money on 33% of longhaul flights

Tue Dec 27, 2016 2:07 am

Not sure why Americans are lecturing to Europe on here. They are very different places.

from my experience living in Europe, it might be a single market but they are still separate countries, and as such many have very different drivers in the mindset of the population towards national brands,

At the end of the day things are not as simple from far away until you experience it yourself.

As for Airfrance, they are often more a victim of union and governmental control in their decision making processes. Many plans have been devised and scrapped over time to make it more competitive but have come to nothing due to stakeholder pressure. Not an easy process.
 
klm617
Posts: 4676
Joined: Sat Jul 04, 2015 8:57 pm

Re: Air France loses money on 33% of longhaul flights

Tue Dec 27, 2016 2:26 am

Varsity1 wrote:
Breaking even isn't good either. Airlines need to earn a firm specific risk premium in line with the overall financial markets. The only ones that currently do are the US carriers. Heavy consolidation is needed in europe.



Right because customers have very little choice and have to deal with the rules these big corporation's make. Last I checked America was built on the foundation that every one would be looked after not just investors so that the could gain a maximum return on their investment. As far as I am concerned the American aviation industry really has done a disservice to the American consumer as a whole with even during the time of regulation the customer received a much better product than it does today and more communities had airline service and employee's had much better working conditions.
the truth does matter, guys. too bad it's often quite subjective. the truth is beyond the mere facts and figures. it's beyond good and bad, right and wrong...
 
presidential
Posts: 8
Joined: Fri Jun 10, 2005 10:50 am

Re: Air France loses money on 33% of longhaul flights

Tue Dec 27, 2016 2:29 am

PatrickZ80 wrote:
Varsity1 wrote:
Breaking even isn't good either. Airlines need to earn a firm specific risk premium in line with the overall financial markets. The only ones that currently do are the US carriers. Heavy consolidation is needed in europe.


A typically American reaction. If you were from anywhere in Europe you'd know that consolidation doesn't work in Europe, specially for flag carriers like Air France. People need to associate them with their countries. The European aviation market is just different from the American aviation market.

Let's imagine the USA and Canada would become one single market, allowing Canadian airlines to operate in and out of the USA and the other way around. Would you think of Air Canada for a direct flight between Europe and the USA? No, you wouldn't. You'd feel like Air Canada doesn't belong in the USA, they belong in Canada. Well, that's the same thing for European countries and their airlines. Air France belongs in France, any base for them outside France wouldn't work because it's not France. KLM couldn't possibly have a base outside the Netherlands and Lufthansa only works in Germany. That's what I mean consolidation isn't possible, people just wouldn't accept it..


I fly to Europe 5-6 times a year from Charlotte, NC. I fly Lufthansa every time, even though this is an American Airlines hub. The flight times, airports and level of service for the price count far more than then fact that AA is based in the US.

I guess by your logic Alaska Airlines can only fly in Alaska ..
 
UltimoTiger777
Posts: 458
Joined: Sun Jul 17, 2016 5:19 pm

Re: Air France loses money on 33% of longhaul flights

Tue Dec 27, 2016 2:36 am

mham001 wrote:


Oh come on that was pre-privatisation ;)
 
ubeema
Posts: 407
Joined: Thu Aug 23, 2012 3:48 am

Re: Air France loses money on 33% of longhaul flights

Tue Dec 27, 2016 3:04 am

mercure1 wrote:
It is well know that much of Africa, colonial or simply put historic Francophone routes are heavy loss making. AF management has stated this many times. I've witness this in management presentations and staff news periodicals.

Heavy loads and higher fares hide the fact of very high cost to operate such services.

For instance many AF Africa cities have large number of AF ground staff members; 20-40+ for airport and city office staff as local agents cannot be relied upon. There is high cost for security in many markets (either local or French expats including security agents onboard), there are issues with fuel which leads to high cost or need to ferry fuel from France. There is high cost for crews for things like their hotel, food, security and even pay as some routes earn supplemental due perceived lack of safety.

AF over years has attempted to manage losses via various methods such as aircraft capacity adjustments (remember the A319 "Dedicate" service), plus they have also tried to cut markets entirely such as Tahiti in 2013 and 2015 but faced protest.

Its been stated that French government applies strong pressure on AF to retain such services to provide national link. For instance on Carribean route which AF wanted to drop few years back due heavy competition from people like Air Carabais and Corsair, French government stated it would remove French state travel contracts in other markets from AF as retaliation. So airline kept the route.

It is blatantly clear an Air France route map flown strictly based on commercial lines would look different than the route map we see today.
Certainly there is no guarantee or even need for all routes will make money, but AF does have unique position of having been stuck with historic it must maintain.

Mercure1 given your insights. Knowing that former French colonies are both generally in 1)subsaharan Africa and 2)Caribbean/Oceania/Indian ocean are you able to clarify if both areas are equally not profitable? Really thought destinations like ABJ were gold for AF. And I believe AF send 380 there as well unless it has changed.

But I have to say though colonization will continue to haunt French government and businesses it support for a long time. Some call it Karma. Weird because on one hand they have competitive edge on the other its Achille tendons.
 
eielef
Posts: 722
Joined: Tue Oct 09, 2007 4:07 am

Re: Air France loses money on 33% of longhaul flights

Tue Dec 27, 2016 3:40 am

I thought AF made LOTS of money flying to Africa, as IB made LOTS of money flying to Latin America. Isn't it the case any more?
 
Varsity1
Posts: 2102
Joined: Mon May 02, 2016 4:55 am

Re: Air France loses money on 33% of longhaul flights

Tue Dec 27, 2016 4:46 am

IndianicWorld wrote:
Not sure why Americans are lecturing to Europe on here. They are very different places.

from my experience living in Europe, it might be a single market but they are still separate countries, and as such many have very different drivers in the mindset of the population towards national brands,

At the end of the day things are not as simple from far away until you experience it yourself.

As for Airfrance, they are often more a victim of union and governmental control in their decision making processes. Many plans have been devised and scrapped over time to make it more competitive but have come to nothing due to stakeholder pressure. Not an easy process.



They might be different, but both abide by the laws of economics.

Besides, we can't pass up a chance to bash them while they're sleeping. I expect a full anti-US sh!tstorm in a few hours. :lol:
"PPRuNe will no longer allow discussions regarding Etihad Airlines, its employees, executives, agents, or other representatives. Such threads will be deleted." - ME3 thug airlines suing anyone who brings negative information public..
 
IndianicWorld
Posts: 3310
Joined: Mon Jun 04, 2001 11:32 am

Re: Air France loses money on 33% of longhaul flights

Tue Dec 27, 2016 5:10 am

Varsity1 wrote:
IndianicWorld wrote:
Not sure why Americans are lecturing to Europe on here. They are very different places.

from my experience living in Europe, it might be a single market but they are still separate countries, and as such many have very different drivers in the mindset of the population towards national brands,

At the end of the day things are not as simple from far away until you experience it yourself.

As for Airfrance, they are often more a victim of union and governmental control in their decision making processes. Many plans have been devised and scrapped over time to make it more competitive but have come to nothing due to stakeholder pressure. Not an easy process.



They might be different, but both abide by the laws of economics.

Besides, we can't pass up a chance to bash them while they're sleeping. I expect a full anti-US sh!tstorm in a few hours. :lol:


If you say things like you have though its only to be expected that people will react.

To me it does rankly sound like you are playing the trolling game than anything else in some of the posts.

without looking at situations in context, trying to apply what one considers the right solution may actually be a flawed concept. In the case of national airlines, over time consolidation is occurring in Europe (BA/IB/EI, Af/KL, LH/OS/LX/SN), but as you can notice these still keep individual brands for good reason. Their core markets will not respond well to losing their national icon, as much as some want to paint that as backward it is the reality that is in play.

Airlines like Norwegian, Ryanair, Easyjet and wizzair are the industry disruptors that have had an opportunity to muscle in on a market segment and grow that across the continent and beyond in some cases.They have well and truly taken advantage of some of the legacy carriers limitations, but the mindset of many countries still remains resolute that they want their national icon to stay.

Any changes take time to evolve as they are more engrained in Europe than the US. Applying an economic argument without looking at the current general context is not going to be the solution no matter how it is spun.
 
User avatar
XLA2008
Posts: 414
Joined: Mon May 30, 2016 8:53 pm

Re: Air France loses money on 33% of longhaul flights

Tue Dec 27, 2016 5:22 am

All this arguing about European carriers consolidating like US carriers have etc... that wouldn't work in Europe for multiple multiple reasons, one reason being that people are patriotic to their nation, the fact that flag carriers are a symbol of a nation, example of British Airways being a huge part of the United Kingdom and British culture, and Aer Lingus the people of Ireland are loyal to Aer Lingus and see that airline as a symbol and status of their nation, you can't just consolidate airlines and say have Air France merge with British Airways and become one airline, say under the Air France name, the people and government of the U.K. Wouldn't stand for it!! You need to remember that in America you consolidated your airlines within ONE nation! Under the same laws, under the same regulations... under the same AOC regulations, it doesn't work like that in Europe! For airlines like Ryanair their crews and staff are trained to Irish regulations etc. they are also not a national carrier or status symbol of a nation, second to that how would you like it if AeroMexico bought out American Airlines and Delta and AeroMexico became the brand name and status airline of the United States!? Because that's how it would be in Europe, Nope I can certainly see that would go down like a sack of s**t in America and I'm pretty sure the US government would put a stop to that, just like the French government would if British Airways decided to buy and rebrand Air France to British Airways!

And being a member of the EU does not mean that the EU is ONE country... so for the idiot that decided to comment saying something along the lines of, well your all part of the EU so why couldn't you... oh well America is a part of the UN like all the other nations, so that must make us all one nations so let's just merge all the airlines within the UN, I would recommend reading up what the EU is before posting silly things like that!

So stop the arguing about how logical and illogical it would be and how it could and couldn't work... this is the real world and it isn't going to happen... ever!

Oh and for Americans boasting and banging on about how great the airlines are in America now after consolidation, just remember your airlines have had the easy way out with chapter 11, your airlines are also the last to catch on with onboard products that the rest of the world has had for years, also remember your competition level is next to nothing compared to Europe and also kindly remember your airlines are also by far the WORST when it comes to customer service... hence why they keep going bankrupt, argue that all you like but that is the truth, and before you go on about me being European, I'm not! I'm American!
Last edited by XLA2008 on Tue Dec 27, 2016 5:30 am, edited 1 time in total.
“For once you have tasted flight you will walk the earth with your eyes turned skywards, for there you have been and there you will long to return.“
 
Varsity1
Posts: 2102
Joined: Mon May 02, 2016 4:55 am

Re: Air France loses money on 33% of longhaul flights

Tue Dec 27, 2016 5:29 am

Icon this, Icon that. lol At some point it's a business. Billon dollar ICONs should not be a priority when your countries are running unemployment 10-15-20+%. If Aeromexico and AC nuked AA/UA/DL fair and square then the losers get what they deserve, just like the losers of TWA, Northwest, Continental, Pan Am and Eastern got what they deserved. Capitalism.
"PPRuNe will no longer allow discussions regarding Etihad Airlines, its employees, executives, agents, or other representatives. Such threads will be deleted." - ME3 thug airlines suing anyone who brings negative information public..
 
User avatar
XLA2008
Posts: 414
Joined: Mon May 30, 2016 8:53 pm

Re: Air France loses money on 33% of longhaul flights

Tue Dec 27, 2016 5:34 am

Varsity1 wrote:
Icon this, Icon that. lol At some point it's a business. Billon dollar ICONs should not be a priority when your countries are running unemployment 10-15-20+%. If Aeromexico and AC nuked AA/UA/DL fair and square then the losers get what they deserve, just like the losers of TWA, Northwest, Continental, Pan Am and Eastern got what they deserved. Capitalism.


lol an icon is a Business... a brand is a business a status is business, I can pretty much assure you first off that AeroMexico and Air Canada would NEVER be able to buy a US carrier nor would they ever be able to rebrand them under another nations flag carrier, why? Because despite that being "business" the US government wouldn't allow it, I'd be willing to bet that the US would allow American Airlines to go bankrupt before they allowed AeroMexico to buy and rebrand them! Down to the fact that they are removing a US identity! Along with tax reasons and several others!! Because America is protecting what is American! Just like the European nations!

Also airlines like TWA, Eastern etc were all carriers within the same nation so that doesn't really count, I'm pretty sure if Air France became British Airways they would loose a lot of money, because they have lost their identity and are no longer the icon they once were, and no longer represent France!
“For once you have tasted flight you will walk the earth with your eyes turned skywards, for there you have been and there you will long to return.“
 
IndianicWorld
Posts: 3310
Joined: Mon Jun 04, 2001 11:32 am

Re: Air France loses money on 33% of longhaul flights

Tue Dec 27, 2016 5:56 am

Varsity1 wrote:
Icon this, Icon that. lol At some point it's a business. Billon dollar ICONs should not be a priority when your countries are running unemployment 10-15-20+%. If Aeromexico and AC nuked AA/UA/DL fair and square then the losers get what they deserve, just like the losers of TWA, Northwest, Continental, Pan Am and Eastern got what they deserved. Capitalism.


That post even after people have tried to explain to you just reeks of trolling.

You may not like it but it is clear you are making statements that ignore the reality over and over.
 
Planesmart
Posts: 2891
Joined: Sun Dec 05, 2004 3:18 am

Re: Air France loses money on 33% of longhaul flights

Tue Dec 27, 2016 6:19 am

LAXintl wrote:
1 out 3 is not bad. Its actually good.

Its extremely common that many routes are loss making on standalone basis.


But they are quite possibly not achieving a sustainable rate of return on most of the remaining 65% either.
 
vinniewinnie
Posts: 722
Joined: Mon Nov 28, 2005 4:23 am

Re: Air France loses money on 33% of longhaul flights

Tue Dec 27, 2016 9:27 am

mercure1 wrote:
vinniewinnie wrote:
mercure1 wrote:
Not sure where the news is here. Regarding loss making routes, I think this is pretty normal.

AF also in unique situation that it operates many social routes particularly to Africa and colonial markets to maintain link to metropolitan France.


Do u a have proof for what you are saying?

I can tell you that as a heavy user of Air France to Subsaharan Africa, flights are neither empty nor cheap.

And what might be backwaters for you are actually oil routes or military routes. (And agreed some oil routes have suffered recently)

I hope you can expand on what you are saying!


It is well know that much of Africa, colonial or simply put historic Francophone routes are heavy loss making. AF management has stated this many times. I've witness this in management presentations and staff news periodicals.

Heavy loads and higher fares hide the fact of very high cost to operate such services.

For instance many AF Africa cities have large number of AF ground staff members; 20-40+ for airport and city office staff as local agents cannot be relied upon. There is high cost for security in many markets (either local or French expats including security agents onboard), there are issues with fuel which leads to high cost or need to ferry fuel from France. There is high cost for crews for things like their hotel, food, security and even pay as some routes earn supplemental due perceived lack of safety.

AF over years has attempted to manage losses via various methods such as aircraft capacity adjustments (remember the A319 "Dedicate" service), plus they have also tried to cut markets entirely such as Tahiti in 2013 and 2015 but faced protest.

Its been stated that French government applies strong pressure on AF to retain such services to provide national link. For instance on Carribean route which AF wanted to drop few years back due heavy competition from people like Air Carabais and Corsair, French government stated it would remove French state travel contracts in other markets from AF as retaliation. So airline kept the route.

It is blatantly clear an Air France route map flown strictly based on commercial lines would look different than the route map we see today.
Certainly there is no guarantee or even need for all routes will make money, but AF does have unique position of having been stuck with historic it must maintain.


Im not buying into this. How is SN able to make money on its African network operating to destinations with less P2P trafic & less feed at a lower frequency to the same destinations? (And AT much lower average prices)

Truth is Air France is bogged down by high cost and a lack of flexibility.

For example, It's one thing to need expat staff on the ground for example, but the question is at what price?
 
WIederling
Posts: 9307
Joined: Sun Sep 13, 2015 2:15 pm

Re: Air France loses money on 33% of longhaul flights

Tue Dec 27, 2016 9:48 am

PatrickZ80 wrote:
Varsity1 wrote:
Breaking even isn't good either. Airlines need to earn a firm specific risk premium in line with the overall financial markets. The only ones that currently do are the US carriers. Heavy consolidation is needed in europe.


A typically American reaction.


All the gory details of the "true Market" Chap 11 bankruptcy.
Even though fuel prices are low that "firm specific risk premium" is contracting.
i.e. what you see as "earned risk premium" is nothing
but the short term gain from dorking your creditors and your workforce.

SuperSchlau.
Murphy is an optimist
 
VolvoBus
Posts: 220
Joined: Fri Sep 30, 2016 5:47 pm

Re: Air France loses money on 33% of longhaul flights

Tue Dec 27, 2016 10:45 am

WIederling wrote:
PatrickZ80 wrote:
Varsity1 wrote:
Breaking even isn't good either. Airlines need to earn a firm specific risk premium in line with the overall financial markets. The only ones that currently do are the US carriers. Heavy consolidation is needed in europe.


A typically American reaction.


All the gory details of the "true Market" Chap 11 bankruptcy.
Even though fuel prices are low that "firm specific risk premium" is contracting.
i.e. what you see as "earned risk premium" is nothing
but the short term gain from dorking your creditors and your workforce.

SuperSchlau.


Repeal the Railway Labor Act and how successful would the American airlines be ?
 
User avatar
Aesma
Posts: 12277
Joined: Sat Nov 14, 2009 6:14 am

Re: Air France loses money on 33% of longhaul flights

Tue Dec 27, 2016 10:55 am

BobPatterson wrote:
Aesma wrote:
I'm not clueless, I'm saying I disagree with that way of seeing the world through crazy financial markets, and if populism is gaining ground in Europe it's in part because people disagree too. In the US you don't have any political party telling people it's possible to do things differently so you end up electing a robber baron to screw you more.


Aesma, I'm trying to understand what you really are driving at.

How are the financial markets "crazy" with respect to the airlines or aviation industry? Are you trying to say that the airlines can/should operate outside "normal" market forces?

What kinds of things do you think the American political parties should be telling the people? How are the people presently being "screwed?"

Please calm down a bit and leave terms such as "robber baron" out of the discussion.

Thank you. I look forward to your complete responses.


I'm saying financialization of the economy is not normal, it doesn't work and leads to crash after crash, causing misery across the planet.

Republicans in the US like to call Democrats "liberals" but they're liberal too, they favor individualism, "freedom", less government, less taxes, that's the definition of liberalism. That's what really matters, not their stupid "values" over what people do with their bodies.

Meanwhile no one is saying what I'm saying. Even Bernie the socialist was very tame, and would have probably been totally ineffective at changing things, because you need people to understand the problem first, then you need candidates at all levels that can deliver, the president is not enough in the US.

The funny thing is that in France I'm a liberal, I want less regulation where there is too much of it, but not over aviation or healthcare for example.
New Technology is the name we give to stuff that doesn't work yet. Douglas Adams
 
G-CIVP
Posts: 1563
Joined: Tue Mar 20, 2001 6:38 am

Re: Air France loses money on 33% of longhaul flights

Tue Dec 27, 2016 12:04 pm

"The minister says that the state has already contributed 130 million euros to Air France through tax benefits".

So in short, tax breaks funded by the French taxpayer. Surely this is a subsidy by any other name?
 
dcaviation
Posts: 475
Joined: Thu Aug 25, 2011 12:26 am

Re: Air France loses money on 33% of longhaul flights

Tue Dec 27, 2016 1:23 pm

So now French companies are above EU law? Government subsidies in any form are illegal.
Why they blocked of subsidies to Malev? When LOT Polish got their "tax break" from the government, they were not allowed to open new routes for 2 years and they had to cut down some of the European routes.

I want the same thing for Air France. WTF? They are King Louis' second child that they can do whatever the hell they want?
 
User avatar
enilria
Posts: 9856
Joined: Fri Feb 22, 2008 7:15 pm

Re: Air France loses money on 33% of longhaul flights

Tue Dec 27, 2016 1:26 pm

LAXintl wrote:
1 out 3 is not bad. Its actually good.

Its extremely common that many routes are loss making on standalone basis.

Most airlines these days look at a routes larger contribution to the network (connection feed, revenue, marketshare, prestige etc) when judging viability of route.
Heck I even know airlines where bulk of their longaul flying is loss making but provide incredible benefit via feed for their short/medium routes allowing much higher frequency, marketshare and profitability on such short/medium flying as result.

I actually have a great deal of doubt it would really be that low. I suspect they are using beyond/network profitability rather than a more conventional measure.
 
MIflyer12
Posts: 6638
Joined: Mon Feb 18, 2013 11:58 pm

Re: Air France loses money on 33% of longhaul flights

Tue Dec 27, 2016 1:26 pm

VolvoBus wrote:
Repeal the Railway Labor Act and how successful would the American airlines be ?


So your criticism is that the U.S. has some intelligent law that keeps employees working and passengers flying?
 
StTim
Posts: 3552
Joined: Thu Aug 08, 2013 7:39 am

Re: Air France loses money on 33% of longhaul flights

Tue Dec 27, 2016 1:28 pm

dcaviation wrote:
So now French companies are above EU law? Government subsidies in any form are illegal.
Why they blocked of subsidies to Malev? When LOT Polish got their "tax break" from the government, they were not allowed to open new routes for 2 years and they had to cut down some of the European routes.

I want the same thing for Air France. WTF? They are King Louis' second child that they can do whatever the hell they want?


Exactly one rule for France - one for everyone else.
 
vv701
Posts: 5895
Joined: Fri Aug 19, 2005 10:54 am

Re: Air France loses money on 33% of longhaul flights

Tue Dec 27, 2016 1:29 pm

mham001 wrote:
UltimoTiger777 wrote:
Varsity1 wrote:


Ummmmm.........BA is a profitable, larger, successful airline. Ain't no bailouts of airlines here in the UK.


Not quite.

http://www.tourmag.com/Subsidies-the-st ... 67729.html


Pre-privatisation when BA was owned and controlled by the British government it was not simply a commercial airline. It was also an instrument used to control British civil aviation policy.

Everything changed in July 1979. Then the government announced its plan to privatise BA. Until that announcement BA (and before that BEA and BOAC) ordered the aircraft that the government and not the airlines had selected as an instrument of British aviation policy.

Neither BEA nor BA had operated a non-British short-haul aircraft since BEA operated the DC-3 Pioneer in the post World War 2 period. Instead the Airspeed Ambassador was followed into service by the Vickers Viscount 700 and 800, the Vickers Vanguard, the Hawker Siddeley Trident and the BAC 1-11.

BOAC operated the 707 and 747. But their was strong government influence in its selection of the de Havilland Comet, the Bristol Britannia, the Vickers VC-10 and Concorde.

Since July 1979 nothing has been the same. Orders for first the Boeing 737 and then the 757 quickly followed. BA built its operational fleet of 747s to 57.

So this is why you needed to go back more than 37 years to make what was then more than a valid point. However going back over 37 years when everything was so different in order to refute a claim saying 'BA IS a profitable . . . airline' is in my view a little excessive. Since July 1979 BA has stood on its own two feet while other like EA, PA and TW have fallen.

Of course BA has had its own problems in those 37+ years as have nearly all airlines. Indeed the changes in the market place over the last 15 years have been great. So, for example, BA carried 44.5 million passengers in 2000 (pre 9/11) but only 31.8 million in 2009 before it returned to growth. In 2015 BA carried 43.3 million passengers, still below its 2000 peak despite buying BD. However by pruning its operations it avoided the bankruptcy suffered by many others.
 
User avatar
Aesma
Posts: 12277
Joined: Sat Nov 14, 2009 6:14 am

Re: Air France loses money on 33% of longhaul flights

Tue Dec 27, 2016 1:49 pm

G-CIVP wrote:
"The minister says that the state has already contributed 130 million euros to Air France through tax benefits".

So in short, tax breaks funded by the French taxpayer. Surely this is a subsidy by any other name?


Tax breaks for ALL COMPANIES BASED IN FRANCE. Millions of companies benefited. Not a subsidy, and not designed to help AF.

dcaviation wrote:
So now French companies are above EU law? Government subsidies in any form are illegal.
Why they blocked of subsidies to Malev? When LOT Polish got their "tax break" from the government, they were not allowed to open new routes for 2 years and they had to cut down some of the European routes.

I want the same thing for Air France. WTF? They are King Louis' second child that they can do whatever the hell they want?


There is no subsidy for AF. All companies benefited from the CICE, and all airlines do not have to pay tax on connecting passengers anymore.

European countries can change taxes how they want as long as taxes are broad, that's a big flaw of the EU but that's how it is, the UK in particular (and Ireland, Luxembourg, Netherlands) don't want united European taxes.

StTim wrote:
Exactly one rule for France - one for everyone else.


Wrong. You're thinking of the UK.
New Technology is the name we give to stuff that doesn't work yet. Douglas Adams

Popular Searches On Airliners.net

Top Photos of Last:   24 Hours  •  48 Hours  •  7 Days  •  30 Days  •  180 Days  •  365 Days  •  All Time

Military Aircraft Every type from fighters to helicopters from air forces around the globe

Classic Airliners Props and jets from the good old days

Flight Decks Views from inside the cockpit

Aircraft Cabins Passenger cabin shots showing seat arrangements as well as cargo aircraft interior

Cargo Aircraft Pictures of great freighter aircraft

Government Aircraft Aircraft flying government officials

Helicopters Our large helicopter section. Both military and civil versions

Blimps / Airships Everything from the Goodyear blimp to the Zeppelin

Night Photos Beautiful shots taken while the sun is below the horizon

Accidents Accident, incident and crash related photos

Air to Air Photos taken by airborne photographers of airborne aircraft

Special Paint Schemes Aircraft painted in beautiful and original liveries

Airport Overviews Airport overviews from the air or ground

Tails and Winglets Tail and Winglet closeups with beautiful airline logos