Transavia will "fail" to become a leading low-cost European leisure carrier unless it ensures that it remains focused exclusively on leisure passengers, its chief executive Bram Graber warns.
Speaking in Paris as the group unveiled growth of the leisure unit as a central part of its new Perform 2020 business plan, Graber said it was imperative that an expanded Transavia focus on the European leisure market, while Air France and KLM’s mainline fleets concentrate on serving key business routes. He says Transavia needs to have a “simple, one positioning” business model that is “less segmented than the major airlines” in order for it to effectively compete with low-cost rivals.
“At Transavia [we] focusing on the leisure segment, we have to be very consistent and do everything that belongs to that. If you make it very grey, and do a little bit on the one or the other then I think in both cases we will fail.”
Under Perform 2020 Transavia is to be expanded to operate some 100 aircraft carrying 20 million passengers by 2017. This will include three divisions: Transavia Netherlands, Transavia France and a future Transavia Europe, with roughly 30 aircraft each.
Transavia Europe will have a separate AOC and Graber confirms that it will operate from “between five and 10 bases outside France and the Netherlands" opening over the coming three years. Air France-KLM says it has identified 15-20 airports in Europe "fitting criteria for base selection" but would not divulge details.
Transavia France will continue "fast growth" at Paris Orly and will get new slots at the airport from Air France. At each base, Transavia will seek to become the second or third biggest operator by market share with three to 10 aircraft deployed at each one.
Graber says the expanded Transavia will operate with a fleet of Boeing 737-800s in a 189 seat configuration, noting these will be a “very simple, standardised 737-800, exactly the same specification as we have in Transavia today because that is the most efficient way to build the network.”
By 2017, Transavia will deliver €40 million ($52 million) of synergies and contribute €100 million of EBITDAR to the Air France-KLM group and its chief executive - Alexandre de Juniac - says the airline will be positioned as primarily a “defensive tool” against the expansion of low-cost rivals into the group’s traditional markets. “We are subjected to high competition by low-cost carriers in traditional airports and regional stations and cannot afford not to advance in that,” he says.
Transavia’s expansion will be financed from the recent €339 million proceeds from Air France-KLM’s sale of shares in airline technology firm Amadeus.
Source: Cirium Dashboard
