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KarelXWB
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AF: Only 50% Of Long-haul Routes Are Profitable

Thu Jul 16, 2015 12:44 pm

Air France says only 50% of their long-haul routes are currently profitable. The carrier is aiming to increase the number to 80%. But if the unions refuse to cooperate, more routes will be axed.

Source (in French):
http://bourse.lesechos.fr/infos-cons...s-lignes-long-courrier-1067845.php
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RE: AF: Only 50% Of Long-haul Routes Are Profitable

Thu Jul 16, 2015 12:54 pm

I doubt they make much money on short haul.
 
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RE: AF: Only 50% Of Long-haul Routes Are Profitable

Thu Jul 16, 2015 1:17 pm

Would this include the transatlantic JV routes they operate with DL/KL/AZ, or just the long haul routes they operate on their own?
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RE: AF: Only 50% Of Long-haul Routes Are Profitable

Thu Jul 16, 2015 1:27 pm

Quoting KarelXWB (Thread starter):

Air France says only 50% of their long-haul routes are currently profitable. The carrier is aiming to increase the number to 80%. But if the unions refuse to cooperate, more routes will be axed.

Source (in French):
http://bourse.lesechos.fr/infos-cons...s-lignes-long-courrier-1067845.php


What kind of company aims to have only 80% of its operations profitable? Surely the aim should be to have 100% of long-haul routes returning net positive cash? These aren't like short hops around Europe that can (sometimes justifiably) be operated at a loss for the sake of supplying feed to long-haul routes.

In essence, they are admitting that 20% of their long-haul routes are showing very little potential for future improvement; so why not just drop many of these routes and be done with it? It is this lack of aggressiveness that will continue to prevent a full successful turnaround at AF. The thought of culling long-haul routes is a network planner's worst nightmare, but there can be no room for sentimentality. If the routes are dogs they should just be dropped.
 
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RE: AF: Only 50% Of Long-haul Routes Are Profitable

Thu Jul 16, 2015 1:30 pm

Does it say which routes are unprofitable?

They do have so many African routes - is a full cargo hold making up the missing income generated by pax? Probably not. Just flying there because of historic ties isn't too good for an airline like AF.
 
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RE: AF: Only 50% Of Long-haul Routes Are Profitable

Thu Jul 16, 2015 1:34 pm

Quoting KarelXWB (Thread starter):
The carrier is aiming to increase the number to 80%. But if the unions refuse to cooperate, more routes will be axed.

If I remember correctly, the ruckus with the pilots earlier was to make the domestic operation profitable, now they are having the same problem on the international front which generates higher margins?
So a blue chipper cannot command a fair price to cover its operations, so when they lower cost, does it also mean service will be lower or they expect the same level of service?
Translated article does not give details, would be interested in seeing the thought process.
Things I can think of, cut routes, cut fleet or at least remove less fuel efficient a/c, pay staff to stay at home if they cannot lower the numbers, (if you have to pay them you don't have to incur the other expenses such as fuel, landing fees etc), give more traffic to partner airlines, create a long haul LCC subsidiary and push traffic over.
 
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RE: AF: Only 50% Of Long-haul Routes Are Profitable

Thu Jul 16, 2015 1:38 pm

Quoting par13del (Reply 5):
So a blue chipper cannot command a fair price to cover its operations, so when they lower cost, does it also mean service will be lower or they expect the same level of service?

Look to the US carriers, who where in a similar situation ~10 years ago. Service levels go down, fees go up.
 
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RE: AF: Only 50% Of Long-haul Routes Are Profitable

Thu Jul 16, 2015 1:47 pm

Quoting EI320 (Reply 3):
What kind of company aims to have only 80% of its operations profitable? Surely the aim should be to have 100% of long-haul routes returning net positive cash? These aren't like short hops around Europe that can (sometimes justifiably) be operated at a loss for the sake of supplying feed to long-haul routes.

In essence, they are admitting that 20% of their long-haul routes are showing very little potential for future improvement; so why not just drop many of these routes and be done with it? It is this lack of aggressiveness that will continue to prevent a full successful turnaround at AF. The thought of culling long-haul routes is a network planner's worst nightmare, but there can be no room for sentimentality. If the routes are dogs they should just be dropped.

I suspect there are very few airlines with 100% profit on every route. Some routes operate at a loss; but are important feeder routes for other profitable routes. i.e.; you loose more money by eliminating the non-profitable feeder route than by continuing to operate it at a loss.

I think 80% of profitable routes is probably acceptable. 50% is not.

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RE: AF: Only 50% Of Long-haul Routes Are Profitable

Thu Jul 16, 2015 1:50 pm

Quoting par13del (Reply 5):
was to make the domestic operation profitable

They're still on it IIRC. All the regional bases except for (?) are supposed to be closed soonish.
 
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RE: AF: Only 50% Of Long-haul Routes Are Profitable

Thu Jul 16, 2015 1:59 pm

Quoting EI320 (Reply 3):
What kind of company aims to have only 80% of its operations profitable? Surely the aim should be to have 100% of long-haul routes returning net positive cash? These aren't like short hops around Europe that can (sometimes justifiably) be operated at a loss for the sake of supplying feed to long-haul routes.

In essence, they are admitting that 20% of their long-haul routes are showing very little potential for future improvement; so why not just drop many of these routes and be done with it? It is this lack of aggressiveness that will continue to prevent a full successful turnaround at AF. The thought of culling long-haul routes is a network planner's worst nightmare, but there can be no room for sentimentality. If the routes are dogs they should just be dropped.

While some routes are unprofitable, they make contribution to other routes for connecting traffic.
Aixing them mean lost of those traffics = loss of revenues and may make more routes unprofitable.

For network carrier, they need to maintain their network to ensure the profitability of their system-wide network,
unless the routes are lossing tonnes of money (hopeless) which can not justify the benefits brought to the company as a whole.

For example, during SARS outbreak in Asia, while CX cut the frequenties from every route seriously,
they insisted to ensure that each of their destination had at lease 1 flight per day to HK just to maintain their network's completeness while basically every single flight was lossing money seriously.
 
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RE: AF: Only 50% Of Long-haul Routes Are Profitable

Thu Jul 16, 2015 2:03 pm

Quoting Marvinhsv (Reply 4):

Does it say which routes are unprofitable?

They do have so many African routes - is a full cargo hold making up the missing income generated by pax? Probably not. Just flying there because of historic ties isn't too good for an airline like AF.

Believe it or not some odd flight can be very profitable. Look at CDG - NIM - OUA. Business is always around 6000 - 7000 euros, Economy does not go lower that 800 euros with average price about 1200 euros, and for a short stay (Monday to friday), U'r looking at a 1800 euros minimum. requent flier points awarded are ridiculous, so not long term liabilities created by those flights either...

Now from my experience taking these flight several times, flight is always full in Economy, premium econonomy and business...
 
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RE: AF: Only 50% Of Long-haul Routes Are Profitable

Thu Jul 16, 2015 2:09 pm

Quoting KarelXWB (Thread starter):

50% is not much worse than most airlines, because it's misleading. Usually 60% make money and 40% lose. They won't get to 80%. The reason it's misleading is because routes have widely varying frequencies. Airlines tend to fly the best routes multiple times per day and the worst ones less than daily. So while it may be 50-50 in terms of route profitability, it's probably 70-30 or 80-20 by ASMs.
 
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RE: AF: Only 50% Of Long-haul Routes Are Profitable

Thu Jul 16, 2015 2:10 pm

Quoting 2175301 (Reply 7):
I think 80% of profitable routes is probably acceptable. 50% is not.

I agree. The 50% number is clearly not sufficient. So they need to improve that, one way or the other. Because they are already in a troublesome situation when it comes to their financial performance. The very strong position of the unions in France does make that task quite hard. Harder as it should be imho.
 
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RE: AF: Only 50% Of Long-haul Routes Are Profitable

Thu Jul 16, 2015 2:12 pm

Quoting vinniewinnie (Reply 10):

Yes, most of the African routes are likely profitable due to the very limited competition. The Asian routes on the other hand...
 
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RE: AF: Only 50% Of Long-haul Routes Are Profitable

Thu Jul 16, 2015 2:19 pm

Quoting 2175301 (Reply 7):
I suspect there are very few airlines with 100% profit on every route. Some routes operate at a loss; but are important feeder routes for other profitable routes. i.e.; you loose more money by eliminating the non-profitable feeder route than by continuing to operate it at a loss.
Quoting hongkongflyer (Reply 9):
While some routes are unprofitable, they make contribution to other routes for connecting traffic.
Aixing them mean lost of those traffics = loss of revenues and may make more routes unprofitable.

For network carrier, they need to maintain their network to ensure the profitability of their system-wide network,
unless the routes are lossing tonnes of money (hopeless) which can not justify the benefits brought to the company as a whole.

  

The days of is simply judging standalone route segment profitability is gone. Its all about how broader network contribution.

This is the simple basis of hub/spoke operations. A good number of spokes will by nature lose money on their own, but provide important contribution for the greater network by flowing traffic to other spokes and pushing them into the green.


So 50% is not that bad on its own. I know a major and profitable global airline whose essentially entire longhaul network is a loss maker but critically important for feed for its profitable short/medium haul network and without the longhaul feed its regional network could never be as large as it is.

At the end its all about how one flows traffic/revenue across the network.

Sounds like AF simply has a poor network mix and too many segments that fail to contribute much let alone cover their own operations.
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RE: AF: Only 50% Of Long-haul Routes Are Profitable

Thu Jul 16, 2015 2:20 pm

Quoting 2175301 (Reply 7):
I suspect there are very few airlines with 100% profit on every route. Some routes operate at a loss; but are important feeder routes for other profitable routes. i.e.; you loose more money by eliminating the non-profitable feeder route than by continuing to operate it at a loss.
Quoting hongkongflyer (Reply 9):
While some routes are unprofitable, they make contribution to other routes for connecting traffic.
Aixing them mean lost of those traffics = loss of revenues and may make more routes unprofitable.

For network carrier, they need to maintain their network to ensure the profitability of their system-wide network,
unless the routes are lossing tonnes of money (hopeless) which can not justify the benefits brought to the company as a whole.

Certainly a big consideration, but my feeling is that the group's wider financial performance indicates that the network contribution of certain long-haul routes may still be insufficient to justify their retention. Naturally, as an outsider looking in, it is impossible to see the full picture.
 
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RE: AF: Only 50% Of Long-haul Routes Are Profitable

Thu Jul 16, 2015 2:28 pm

Quoting hongkongflyer (Reply 9):
While some routes are unprofitable, they make contribution to other routes for connecting traffic.
Quoting LAXintl (Reply 14):
At the end its all about how one flows traffic/revenue across the network.

That may all be true, yet AF seems to be unhappy with its current long-haul network and wants to increase profitable routes. And if they fail to do so, some of those routes will be axed. The article quotes AF CEO Frédéric Gagey, saying 'we have no other choice'.
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RE: AF: Only 50% Of Long-haul Routes Are Profitable

Thu Jul 16, 2015 2:31 pm

I haven't even considered flying AF because their flight from MIA arrives too late for many meaningful connections. Maybe they should look into this and see if there are other places in the network that has similar problems.
 
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RE: AF: Only 50% Of Long-haul Routes Are Profitable

Thu Jul 16, 2015 2:37 pm

This is Air France management trying to distract things.

This week in almost unheard of fashion, 14 separate trade groups that represent virtually every local Air France employee jointly called on the French state to intervene and denounce the actions of the management team as they slowly disassemble the airline with a strategy of poor choices which combined compromise the viability of the enterprise.
Current management team have no strategy besides cut, cut and cut which eliminates AF presence in market place to growing degree with harm to its personal and ultimately French state.

Regarding specific routes, remember a segment of AF routes are still to degree social contributions and required to Francophone links. From Africa, to overseas departments and territories. I see only routes to places like USA and Far East built on commercial criteria.
So its no surprise that 50% of longhaul might be loss maker to the airline.
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RE: AF: Only 50% Of Long-haul Routes Are Profitable

Thu Jul 16, 2015 2:57 pm

Quoting hongkongflyer (Reply 9):
While some routes are unprofitable, they make contribution to other routes for connecting traffic.
Quoting LAXintl (Reply 14):

At the end its all about how one flows traffic/revenue across the network.

This is about more than simple hub mechanics.

Plenty of routes -- including at AF -- lose money including at the contribution level. What then?

I would submit that airlines are unlikely to cut "cornerstone" routes no matter what the profitability.

For example, let's say AA and UA lose money on LGA-ORD. They probably don't, but let's say they do. Will they stop serving Chicago to New York? No! They will not.

Similar for CDG-NRT on AF. Say it loses money (but I doubt that). If they stop serving it, customers could desert the whole airline, because it no longer sells an adequate assortment of product.
 
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RE: AF: Only 50% Of Long-haul Routes Are Profitable

Thu Jul 16, 2015 3:00 pm

Quoting Polot (Reply 13):
Yes, most of the African routes are likely profitable due to the very limited competition.

On the other hand, some African routes are very expensive to operate due to the poor state of local infrastructure. Higher revenue doesn't always translate into higher profitability.
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RE: AF: Only 50% Of Long-haul Routes Are Profitable

Thu Jul 16, 2015 4:04 pm

Quoting EI320 (Reply 3):
What kind of company aims to have only 80% of its operations profitable? Surely the aim should be to have 100% of long-haul routes returning net positive cash? These aren't like short hops around Europe that can (sometimes justifiably) be operated at a loss for the sake of supplying feed to long-haul routes

Apart from the network contribution mentioned earlier up-thread, one can also thee them as investment. New routes may need some time to develop to build a customer base. Depending on the losses per route, growth potential etc, 80% may not be unreasonable. 50% on long standing routs is a different matter of course.

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RE: AF: Only 50% Of Long-haul Routes Are Profitable

Thu Jul 16, 2015 5:20 pm

Quoting vinniewinnie (Reply 10):
Believe it or not some odd flight can be very profitable. Look at CDG - NIM - OUA. Business is always around 6000 - 7000 euros, Economy does not go lower that 800 euros with average price about 1200 euros, and for a short stay (Monday to friday), U'r looking at a 1800 euros minimum. requent flier points awarded are ridiculous, so not long term liabilities created by those flights either...

Now from my experience taking these flight several times, flight is always full in Economy, premium econonomy and business...

I think this is likely true for West Africa, esp where there are ties because of French colonialism, but some other African routes, Djibouti, Antananarivo, Reunion, I don't think as much. Also I think that there is more competition than there used to be. Brussels flies to a lot of the West African cities that used to be Air France cash cows. Even Royal Air Maroc can get you from Europe or even New York to almost any capitol in West Africa. Sure it isn't non-stop, but a lot of travelers are probably very price sensitive and will take a one-stopper if much cheaper.

True those pax might not be profitable in the first place.
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SelseyBill
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RE: AF: Only 50% Of Long-haul Routes Are Profitable

Thu Jul 16, 2015 5:23 pm

Quoting KarelXWB (Thread starter):
Air France says only 50% of their long-haul routes are currently profitable.

I'd imagine the folks over at Schipol are just thrilled to read this.

Perhaps KLM married the wrong girl ?
 
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RE: AF: Only 50% Of Long-haul Routes Are Profitable

Thu Jul 16, 2015 5:28 pm

Quoting KarelXWB (Thread starter):
Air France says only 50% of their long-haul routes are currently profitable

They fly A380's on 50% of their routes? Say it isn't so ....     

Rgds
 
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RE: AF: Only 50% Of Long-haul Routes Are Profitable

Thu Jul 16, 2015 5:34 pm

Quoting LAXintl (Reply 14):
. I know a major and profitable global airline whose essentially entire longhaul network is a loss maker but critically important for feed for its profitable short/medium haul network and without the longhaul feed its regional network could never be as large as it is.

How come that sounds so much like Qantas and SAA ?
 
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RE: AF: Only 50% Of Long-haul Routes Are Profitable

Thu Jul 16, 2015 5:41 pm

Quoting csavel (Reply 22):
I think this is likely true for West Africa, esp where there are ties because of French colonialism, but some other African routes, Djibouti, Antananarivo, Reunion, I don't think as much

Reunion is not an ex-colony, it is an integral part of France itself, votes in French elections etc. As a result a lot of people need to go between it and Paris on business.
 
laca773
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RE: AF: Only 50% Of Long-haul Routes Are Profitable

Thu Jul 16, 2015 5:43 pm

AF management has already said the A380 wasn't, isn't a good match for them and their network needs. Obviously, the A380 is too large for their network and I suspect does hurt their bottom line/profits. I wouldn't be surprised if the A380s are eventually parked and routes that have been flown with it, will be done with 77Ws.
 
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RE: AF: Only 50% Of Long-haul Routes Are Profitable

Thu Jul 16, 2015 6:01 pm

Quoting laca773 (Reply 27):
AF management has already said the A380 wasn't, isn't a good match for them and their network needs. Obviously, the A380 is too large for their network and I suspect does hurt their bottom line/profits. I wouldn't be surprised if the A380s are eventually parked and routes that have been flown with it, will be done with 77Ws.

Yes, they have repeated that. However, I think there are destinations that should definitely work, such as LAX, JNB, etc.

It is very telling that MEX (AF's last 744 destination) is becoming a 77W / A380 route as of Jan. 16th as per another thread on the forums.

I would not say that the airlines that find the A380 to be too much plane for their needs today will continue to do so in the future. The world population, the world economy and the aviation industry will continue to grow. A route where a daily 77E was enough in 2014 might need at least a daily A380 in 2020. Emphasis on at least.
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2175301
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RE: AF: Only 50% Of Long-haul Routes Are Profitable

Thu Jul 16, 2015 6:14 pm

Quoting EddieDude (Reply 28):
I would not say that the airlines that find the A380 to be too much plane for their needs today will continue to do so in the future. The world population, the world economy and the aviation industry will continue to grow.

I disagree. Just because the world population is increasing does not mean that the population is increasing in all areas. Quite the contrary. Most of the industrialized world has a fairly stable population. Existing airline routes will not grow based on population growth in these areas; which just happens to be many of the trunk routes between the US, Europe, and other places.

Most of the population growth in the world is in areas that do not have much air transportation infrastructure. There will be airline growth in those areas; but, it will first be narrow bodies, then wide bodies. It will not start with an A380 sized plane. Now it may be that growth in those countries may mean that an A380 sized trunk route might develop. But, that comes later (if ever).

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RE: AF: Only 50% Of Long-haul Routes Are Profitable

Thu Jul 16, 2015 6:22 pm

I say it

Quoting astuteman (Reply 24):
They fly A380's on 50% of their routes? Say it isn't so

and it happens ...

Quoting laca773 (Reply 27):
AF management has already said the A380 wasn't, isn't a good match for them and their network needs. Obviously, the A380 is too large for their network

I didn't really expect it to. I should have though, I guess

Rgds
 
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RE: AF: Only 50% Of Long-haul Routes Are Profitable

Thu Jul 16, 2015 6:26 pm

Quoting astuteman (Reply 24):
They fly A380's on 50% of their routes? Say it isn't so ....

Now, now, there's no call for turning this into another A380 bashfest. -ir

Edited to add: Oooops, I see I'm too late with my admonition.

[Edited 2015-07-16 11:28:18]
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RE: AF: Only 50% Of Long-haul Routes Are Profitable

Thu Jul 16, 2015 6:55 pm

Quoting 2175301 (Reply 29):
Most of the industrialized world has a fairly stable population.

But look at the BRICS and MIST countries.

The choice of AF to fly the A380 to JNB, PVG, HKG and MEX as of 2016 is very telling.
Upcoming flights:
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August: KL MEX-AMS 74M (J), KQ AMS-NBO 788 (J).
 
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RE: AF: Only 50% Of Long-haul Routes Are Profitable

Thu Jul 16, 2015 6:59 pm

Size is rarely the answer these days. You can utilize frequency instead for growth.
Frequency is not only beneficial for the passenger by giving them choice, but it strengthens the hub by increasing connectivity options.
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EddieDude
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RE: AF: Only 50% Of Long-haul Routes Are Profitable

Thu Jul 16, 2015 7:04 pm

Quoting LAXintl (Reply 33):
Size is rarely the answer these days. You can utilize frequency instead for growth.
Frequency is not only beneficial for the passenger by giving them choice, but it strengthens the hub by increasing connectivity options.

I'd say it is a case by case situation.

NYC-LON yes, of course. Frequency is king.
BA at MEX-LON for expample is better served by offering daily or less than daily (as it currently happens) with a very large aircraft because (i) the demand for more than that is just not there; and (ii) there are slot issues that make it more importante to haul as many people as possible in one single flight, than offer three low density flights and take up all those valuable slots.
Upcoming flights:
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August: KL MEX-AMS 74M (J), KQ AMS-NBO 788 (J).
 
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RE: AF: Only 50% Of Long-haul Routes Are Profitable

Thu Jul 16, 2015 7:07 pm

Air France longhaul future is with the 787/A350 and maybe something like the 77X.

AF has speed up its 744 retirements and CEO clearly said the A380 is not the best fit.
AF deferred delivery of its 12th frames and not been in hurry to acquire current fleet by stretching out deliveries over 6-year period.

Today it basically operates the A380 to places where it will do the least harm. Future optimal longhaul capacity size is more in the 275-350 seat range, not 516 like A380.



Air France: Airbus A380 Not A Good Fit For Network (by LAXintl Oct 1 2013 in Civil Aviation)
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Egerton
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RE: AF: Only 50% Of Long-haul Routes Are Profitable

Thu Jul 16, 2015 7:37 pm

AF's problem is that it is flying in a Bermuda Triangle.

There are commercial issues well known to management, unions seeking to avoid a free market in pay, and an elected Government frozen in the headlights of oncoming economic reality.

It is a lot to ask each party, but they must between them adjust the AF rate of decent without delay.

SINK RATE whoop whoop SINK RATE whoop whoop PULL UP whoop whoop PULL UP. . . . . to be continued?

[Edited 2015-07-16 12:43:32]
 
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RE: AF: Only 50% Of Long-haul Routes Are Profitable

Thu Jul 16, 2015 7:53 pm

Quoting SelseyBill (Reply 23):

Now there is a thought.  
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RE: AF: Only 50% Of Long-haul Routes Are Profitable

Thu Jul 16, 2015 7:59 pm

Talk to a route planner at any airline...

50% of routes at said airline lose money.

Just the way it is. That is why maximizing yield on your profitable routes is so important.

This number is not out of whack with industry norms...at all.

What is out of whack, is that it is focused on international long haul routes...which are usually cash cows for airlines depending on time of year
 
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RE: AF: Only 50% Of Long-haul Routes Are Profitable

Thu Jul 16, 2015 9:16 pm

Quoting Andy33 (Reply 26):
Reunion is not an ex-colony, it is an integral part of France itself, votes in French elections etc. As a result a lot of people need to go between it and Paris on business.

It can still be an ex-colony and be an integral part of France today, not mutually exclusive. But more to the point at hand, I suspect that the traffice between those two places are mostly vacationers, far fewere business people. An analogy (not perfect but no analogies are) might be between the US mainland and Hawaii. Great tourist destination, but yields not so hot, probably a relatively low number of big shots filling the front (and that is notwithstanding the fact that Hawaii actually does do a fair amount of agricultural export to fill up plane bellies.)
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RE: AF: Only 50% Of Long-haul Routes Are Profitable

Thu Jul 16, 2015 10:45 pm

Quoting EI320 (Reply 3):
What kind of company aims to have only 80% of its operations profitable? Surely the aim should be to have 100% of long-haul routes returning net positive cash?

Lets say you are a US airline. You might operate from NYC to London at a loss with pure joy because it preserves valuable assets (slots at both ends). You might operate it because you own the plane, and would lose more money doing anything else with it. You also might see the benefit of losing money on a customer on that trip. But then they fly other trips to other destinations with you that make profit.

That said, 50% needs worked on. Might be overall profitable, but its not the way to secure the future of your company.
 
behramjee
Posts: 4963
Joined: Sat Aug 02, 2003 4:56 am

RE: AF: Only 50% Of Long-haul Routes Are Profitable

Thu Jul 16, 2015 10:57 pm

Two questions:

1. When AF means profitable, does it mean operating profit (cash positive after just covering variable costs) or net profit (after covering all costs). If it is the latter, then I highly doubt that the number is even 50% !

2. Also do the medium haul 6-7 hour flights into West/Central Africa/Middle East constitute being long haul for them?

And as someone correctly mentioned earlier on in this thread, not a single airline operating today has 100% of its long haul operations profitable (net profit).
 
travelhound
Posts: 1864
Joined: Fri May 23, 2008 9:13 pm

RE: AF: Only 50% Of Long-haul Routes Are Profitable

Thu Jul 16, 2015 11:36 pm

Quoting laca773 (Reply 27):
AF management has already said the A380 wasn't, isn't a good match for them and their network needs. Obviously, the A380 is too large for their network and I suspect does hurt their bottom line/profits. I wouldn't be surprised if the A380s are eventually parked and routes that have been flown with it, will be done with 77Ws.

Using Wiki and Seatguru as a guide the A380 represents 10 aircraft out of a fleet of 108 (9.3%) wide bodies (long haul), but approximately 16% of available long haul seats.

If we use a worse case scenario of 65% of A380 flights being unprofitable, unprofitable A380 flights represents something like 20% of all unprofitable flights.

To put this in to greater perspective, using the same maths, the 777-200ER would represent 25% of all unprofitable flights flown.

Considering there are only six aircraft types in AF's fleet and of those six 18 aircraft are old generation 747 and A340 models and would with all things considered be more likely unprofitable, the A380 probably isn't doing too bad for itself.

To have such a low number of profitable flights with such a broad mix of aircraft types and sizes suggest there are other factors at play.

[Edited 2015-07-16 16:38:32]
 
EMB170
Posts: 328
Joined: Fri Nov 09, 2007 1:16 pm

RE: AF: Only 50% Of Long-haul Routes Are Profitable

Fri Jul 17, 2015 12:11 am

This seems somewhat confusing...and is what I was attempting to get at in my post on the other thread. On the one hand, AF management says that half of their long haul network is not profitable. On the other, DL is saying that they cannot fulfill their end of the JV as metrics are currently calculated and want to recalculate it in a way that has some in the DL pilots' union concerned that their jobs may be "outsourced to Air France". How is DL going to give more long haul flying to AF if DL is making money and AF isn't?
IND ORD ATL MCO PIT EWR BUF CVG DEN RNO JFK DTW BOS BDL BWI IAD RDU CLT MYR CHS TPA CID MSP STL MSY DFW IAH AUS SLC LAS
 
Byrdluvs747
Posts: 2500
Joined: Thu Jul 15, 2004 5:25 am

RE: AF: Only 50% Of Long-haul Routes Are Profitable

Fri Jul 17, 2015 1:00 am

Quoting laca773 (Reply 27):
I wouldn't be surprised if the A380s are eventually parked

It would be quite the sight to see AF park the Toulouse Goose. Im sure Airbus doesn't want to see global carriers like AF parking their flagship plane.
The 747: The hands who designed it were guided by god.
 
RogerMurdock
Posts: 152
Joined: Sat Aug 23, 2014 9:01 pm

RE: AF: Only 50% Of Long-haul Routes Are Profitable

Fri Jul 17, 2015 1:29 am

Quoting EI320 (Reply 3):
there can be no room for sentimentality.

There frequently is plenty of sentimentality and politics when a flag carrier is involved.
 
centrex
Posts: 45
Joined: Sat Apr 25, 2015 12:03 pm

RE: AF: Only 50% Of Long-haul Routes Are Profitable

Fri Jul 17, 2015 1:43 am

Remember SEA. DL took that CDG route over from Air France some 3 years ago, not really sure. Lower cost at DL
 
incitatus
Posts: 3308
Joined: Wed Feb 09, 2005 1:49 am

RE: AF: Only 50% Of Long-haul Routes Are Profitable

Fri Jul 17, 2015 2:17 am

50%? AF seems to be doing well. I talked to someone from Turkish and he said TK loses money on the majority of long-haul routes. The route to Brazil is a money sinkhole.
I do not consume Murdoch products including the Wall Street Journal
 
CHI787ORD
Posts: 817
Joined: Sat Jun 11, 2005 11:27 am

RE: AF: Only 50% Of Long-haul Routes Are Profitable

Fri Jul 17, 2015 3:22 am

Quoting centrex (Reply 46):

Remember SEA. DL took that CDG route over from Air France some 3 years ago, not really sure. Lower cost at DL

Well its no secret either that ORD hasn't been a great performer for AF in quite some time. I'm wondering then if some of these 50% include North American JV destinations
 
jfk777
Posts: 7044
Joined: Tue Aug 22, 2006 7:23 am

RE: AF: Only 50% Of Long-haul Routes Are Profitable

Fri Jul 17, 2015 3:42 am

IS flying all the way from CDG to Lima, Santiago and Buenos Aires nonstop profitable.

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