Air France-KLM recently appointed a new CEO, Ben Smith. Ben used to be the President & COO at Air Canada, and he’s one of the brightest guys in the airline industry. I think this appointment was a brilliant decision by the Air France-KLM board. Their old strategy wasn’t working, and it was time they brought in an outsider who can take a fresh look at things, rather than just more of the same.
When Ben was appointed I wrote about why I have so much respect for him and what he has done at Air Canada. I’d say so far he has made incredible progress at Air France-KLM. Air France’s biggest issue for a long time has been labor, and in a few short weeks they’ve reached a labor deal with 76% of their workforce.
That’s extremely impressive, though I’m not surprised Ben was able to accomplish that. I can guarantee he approached this very differently than any of the management team previously did.
Obviously it’s going to take him a while to get fully settled into his role, though there are now some more insights into the changes that are under consideration. Les Echos has a story (in French) that talks about some of the changes are apparently under discussion among the new management team.
What’s potentially on the radar for the new management team?
- The number of management employees at Air France and KLM is “excessive,” as there are too many duplicate roles at the two airlines, so management roles could almost be cut in half
- The roles of the main brands (Air France and KLM) need to be emphasized more, rather than focusing on Joon, Transavia, and HOP!
- Along those lines, apparently the concept of Joon is on the chopping block; as many of us have said from the beginning, this was initially done so they could hire flight attendants with lower labor costs, but it’s increasingly not seeming worth it for the confusion it causes customers
- The efficiency of the CDG hub needs to be improved; while AMS is saturated, the CDG hub goes between having way more flights than it should handle at peak hours, to having virtually no traffic at other hours, so the airport seems to be a bit too “banked”
- The Air France and KLM fleets are far too complex, with both Air France and KLM having A350s on order; it could be that all A350s will end up going to Air France, because it doesn’t make sense to have such an inconsistent fleet; in exchange, some of the remaining 787 orders for Air France could go to KLM
- Air France has said that they’ll start retrofitting their A380s with new seats in 2020, though it looks like that’s being reconsidered; it would cost about 45 million Euros to reconfigure each A380, so my guess is that these planes may just be retired sooner rather than later
It’s nice to have a no-nonsense person at the head of Air France-KLM who can take an objective look at the operation and act accordingly. Like I said, none of the above are sure bets. Rather they’re mostly quotes from people at the company sharing what internal discussions have been about.
But most of these things sound logical and like they’re necessary for Air France-KLM to succeed, and I can’t wait to see how all this goes.
What do you make of the possible changes that are being considered at Air France-KLM?