Air France-KLM recently released its 2013 fiscal results, so we went to meet Frédéric GAGEY, the CEO of the French national airline to get a little more feedback regarding the latest Air France news; in particular their restructuration plan, move upmarket, and problems with onboard incivilities.
Frédéric GAGEY, hello, two years after the launch of your Transform 2015 Restructuration Plan, the financial state of Air France-KLM has improved. The group has published its results indicating a return to positive operating income in 2013 that had not been the case the previous year; do you think you are now on the right track ?
Frédéric GAGEY - Air France CEO
"Yes, indeed we are, for Air France-KLM it's very good news, with an operating income of € 130 million, and then on top of that a debt reduction that was beyond even that which we expected, of course it's encouraging ! However, I could note that Air France is not yet in equilibrium in terms of operating margin, even though Air France has made significant progress compared to 2012, there's still a little more to do before we find ourselves on a stabilized economic trajectory."
Where are you regarding the voluntary departures for ground staff and cabin crew ?
Frédéric GAGEY - Air France CEO
"The last voluntary plans for ground personnel was launched in October 2013 departures, and concerns about 1,800 people; discussions with our social partners were finalized in December 2013, and now there are meetings with employees who have been informed of the possibility of re-deployment, of the possibility of leaving or career changes, so I think things are going well. Concerning cabin crews, we are currently in discussions with the unions to consider a voluntary redundancy plan that could take place during the course of this year."
Regarding investments, Air France is currently investing € 500 million for the upgrading of its classes. The new First Class seat will also be introduced in May at Shanghai, is this a strategic move ?
Frédéric GAGEY - Air France CEO
"You are obviously well informed about the presentation in Shanghai. You know that we very recently presented the new Business Class seat, and also that for the Economy class last September, and so I think it's an approach that's falls, at one and the same time, into an approach to upgrading our product, cabin renovation, together with upgrading the business class with an innovative and extremely comfortable seat ! And soon, there will be the implementation of a new cabin to be unveiled in Shanghai but I can't say more about that because it hasn't yet been presented to the press."
Does this upmarket move apply to the whole Air France long-haul fleet or just its Boeing 777's ?
Frédéric GAGEY - Air France CEO
"In the long term, of course. You know a fleet is a living entity, seats are replaced, and cabins are renovated, so obviously, in the long term, clearly, this upgrading will concern all Air France aircraft. Investment programmes follow one after the other. So at first, we are renovating the Boeing 777 cabins, of which there are a great number in the Air France fleet, and we are already considering renovating the Airbus A-380 cabins."
For the A380, do you have a clear idea of what you want to do yet?
Frédéric GAGEY - Air France CEO
"Not yet, of course we still have to introduce the new First and Economy Class seats, but the programme has not yet been fully defined, but it's a project that is already under consideration."
A last anecdotal question - the former lead NTM singer, Joey Starr was taken off an Air France flight this weekend. The company has filed a complaint for "unacceptable behavior under the influence of alcohol". Is this a tightening of Air France's policy towards these onboard incivilities that have increased over the last five years throughtout the world ?
Frédéric GAGEY - Air France CEO
"No, we haven't noticed an increase in incivility on board, but it is true that whenever certain behavior poses a problem, the captain may decide to have a passenger removed. In this case the commander took that decision, and he has laid a complaint, because he is compelled to do so, whenever he has to involve the police in the removal of a passenger ! Obviously I regret this kind of behavior !"
Frédéric GAGEY, Thank you.
