Big Changes Could Be Coming To Air France-KLM With New CEO

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

Bottom line

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?

Comments

  1. Or he could copy the business model of Ryanair for AF and BA’s for KLM. Both,the most profitable airlines in Europe.

  2. He should fly overnight from JFK to CDG, and then go through the connecting process to another city in Europe, say VIE or MAD, as a normal (non-employee) customer. He should also choose a connection that’s 90 minutes long, so it’d seem like enough time – and then, after missing his connecting flight like I did, he can fix all the signage in the airport that doesn’t tell you what to do or where to go, and he can train the airline employees to be helpful and friendly. HAHAHA. I crack myself up. #neveragain

  3. @Neil S – Amen to that! CDG is an absolute hell hole for connections. I’ll pay extra to avoid it. They’re still dealing with what is essentially an early 70’s airport that wasn’t designed for the traffic and hub activity it now receives.

  4. @gregg it’s far better than it was and 2e was opened in 2004 not the 70s. And the satellites opened in 2007 and 2012.

    You allude to 1 and 2ABCD which are much older and not used by AF

    There is now even an airside hotel in 2e. They just need to improve the food options

  5. I fly back and forth regularly between homes in eastern Canada and southern France, mostly connecting through CDG, and I always allow a minimum of THREE HOURS for Air France-to-Air France connections, which is absurd – but necessary.

    Kudos to Ben Smith for his efforts to improve Air France, which in my experience performs brilliantly in the air, but falls short on the ground due to the poor design of it’s hub airport.

    Joon was a poorly-conceived idea and I hope it is gone by 2020.

  6. Yes CDG is a disaster to connect through.

    I might hope that KLM ends up with the 350’s instead of the Boeings, there is quite a differnce in comfort although the 787 is not too bad either.

    If it were not for KLM, AF would have been bankrupt years ago. I hope KLM does not get sucked into a black hole by AF as it is a pretty decent and pleasant airline.

  7. I’ve only recently discovered KLM Air France and tried it over BA as the business class on BA intra Europe causes me knee pain the leg room is so tight
    I like KLM
    The
    One thing they do is stop their expiring miles and I would have confidence to do a large amount of business over the coming years
    Hop jive Transylvania all their weird sub brands need to go it’s just brand confusion and I start to think they are trying to be Ryanair or easy jet

  8. I recently had a roundtrip from JFK, the outbound via AMS on KLM’s 787 and the return via CDG on AF’s A380 – both in Business.

    Night and freaking day in terms of both hard product and soft product. KLM’s 787s are gorgeous and have a fantastic hard product in business. The KLM crew was elegant, polished, and attentive, addressing me by name and checking in regularly to make sure everything was satisfactory. The lavatories were spotless and food was great, and the ground experience at Schiphol was so easy too – the airport is airy and clean, and the lounge staff were all smiles and ready to help.

    The return on AF was inferior on every level. The A380 hard product is a joke; J seats are old and grimy and you’re packed in like sardines. Both my seatmate and I used the hot towel to wipe down the arm rests, and the towel was gray when we were done. Entertainment system felt clunky and dated. The crew was robotic and unsmiling, and CDG is just sort of…gross. I will say the renovated Air France lounge is beautiful, but the staff were unhelpful and unfriendly, and made me feel like I was imposing by asking for a new boarding pass or for directions to my new gate.

    Anyway, sorry for the rant – just want to say there is a lot of work to be done on this joint venture, and I hope Ben Smith is up for the challenge.

  9. @Icarus – It may be far better but it’s still not acceptable. And it doesn’t matter how nice the lounges and terminals are when you are running flat out past and through them, and waiting – with hundreds of other pax – to be bused over to 3 waiting A380s. You know how many buses that takes? I don’t – and neither apparently does AF. I only made the flight back to JFK because the outbound was delayed 45 minutes, as it had landed late. #neveragain

  10. He’s ruined AC with high-density planes, basic economy, and sour employees who are afraid of management’s wrath when assisting a customer. Zero empowerment to solve any issues because of fear of disciplining. He leaves behind a rotten culture. So watch out AF/KL

  11. According to an interview he gave to Reuters (i think that’s where i read it this morning) it seems that he wants to expand the Transavia brand which has been very profitable. He’s yet to meet with the Pilot Unions and deal with them. Remember they are the ones who have so far prevented Air France from growing any subsidiaries.

    I think we’ll see Transavia expand to even long haul like he did with Air Canada Rouge. Wishing him all best to bring the changes needed at AF.

  12. Air France has said that they’ll start retrofitting their A380s with new seats in 2020, though it looks like that’s being reconsidered.

    – Hmm, KLM’s ‘new’ business class doesn’t even have direct aisle access except on the new 787.

    The Air France and KLM fleets are far too complex.

    Doesn’t matter where the A350 or 787 goes. The need to align their hard product. Way too many 777 configs.

  13. Hold on – 45 Million Euros for EACH A380 to update the seats? That seems like it would be more than the entire plane’s fair value. Are you sure the number doesn’t refer to their entire A380 fleet?

  14. Unfortunately, you have misunderstood what was agreed to. These are temporary agreements. Ben Smith was not responsible for the current short term labour agreements signed with SOME of the unions. The hard work was started long before Ben Smith arrived and took up his job in September. Are you aware that agreements are only for one year? Air France and the unions will be back in contract negotiations by next October. More importantly, the two unions who have been the cause of most of the service disruptions are the flight crews and the pilots. Air France will start its negotiations with them in the first week of November. None of this is a secret as it is all stated in the Air France press releases. Wait. The fun has yet to begin.

  15. He may do a lot to improve AF but there is little he can do to improve CDG…which is horrible airport, with terrible management and the most unfriendly and incompetent staff.

  16. He needs to work with ADP to improve the connection experience at CDG. AF has a robust network in the Middle East and Africa. If it was easier to connect at CDG *without buses* then the airline would be more attractive. There’s no point in having all the fancy boutiques in the airport terminals when the passengers are just running by to get their connections.

  17. Seems like none of you have ever tried connecting at Heathrow or Frankfurt … talking about walking a few miles in a hurry !

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