Chris Jasper/LONDON Julian Moxon/PARIS
Air France is conducting a sweeping fleet, route and strategy review of its ailing regional network in the face of an onslaught from the rival TGV (high-speed train) express rail service, with wholly-owned Brit Air suspending a regional jet order and the flag-carrier ruling out a rescue bid for rival SAirGroup's French interests.
Air France chairman and chief executive Jean Cyril Spinetta says that while Lyon-based Brit Air is profitable and Dublin-based CityJet is breaking even, its three other regional operators, wholly-owned Proteus Airlines and Regional Airlines, and part-owned Flandre Air (due to be formed into a Nantes-based wholly-owned single carrier with a hub at Clermont Ferrand) are "a big problem".
The three will be combined under a new identity, Régional, from 1 April, with 80 aircraft, 1,200 staff, anticipated sales this year of Fr2.5 billion and Jacques Bankir, formerly of CityJet, as president. Spinetta says, however, that Bankir must "restore them to profitability" before a full merger.
Air France says it is "undergoing a full reorganisation of regional and European activities", with Spinetta adding that while no European domestic market delivers a ready profit, the French is tougher than most: "We all compete with a low-cost carrier - the TGV, a tough competitor, with 60% of the market".
Air France claims a 75-80% share of the domestic air market, but the carrier's chief operating officer Pierre-Henri Gourgeon says it is planning to cut some domestic frequencies because of the TGV's success. "The effect has only slightly diminished our sales but we're looking at rapidly growing TGV passenger popularity as the network spreads," he says. "Our strategy is to aim for higher yield on quality routes."
Frequencies to Marseilles, to be served by the TGV from Lyon from 10 June, will be reduced, but the airline will ramp up daily service between Paris Orly and Montpellier, Nice, Bordeaux and Biarritz. Nîmes services will be moved to Charles de Gaulle.
Brit Air president Xavier Leclerc has revealed that deliveries of four Bombardier CRJ900s ( it also has eight options), due from early 2003, will be delayed to the end of that year, adding Air France "needs more time to see how the 900 fits into Brit Air's fleet plans".
Spinetta says he is "not surprised" by the crisis facing SAir carriers Air Littoral, Air Liberté and AOM, but sources close to Air France confirm it has no interest in buying any of them - AOM and Air Liberté in particular will "probably have to die". The source adds that SAir "tried to buy its way into the French market at the wrong time and paid too much money".
Source: Flight International
