Air France has already announced it will phase out its ten Airbus A380s by 2022. Rarely has an airline been as unhappy with the Airbus giant as the French, who are in general taking every Airbus aircraft. CEO Anne Rigail talked exclusively with AirlineRatings during the recent inaugural A350 flight from Paris to Toronto.
It seems the A380 was always more a burden than a vehicle of choice for Air France, do you agree?
Anne Rigail: I would not say that it was a burden from the beginning. I don’t know if anyone would have been able to forecast it at the time, but the A350 and the Dreamliner just made the A380 totally obsolete, too expensive, too big. Operationally it has always been a very difficult aircraft, you need specific ramp equipment, you need to rebuild runways and taxiways, you need special boarding ramps. I say this because I was working at our CDG hub when the A380 arrived – operationally it has always been problematic. Because you even need special training for everyone on the ramp, I have never seen this before. In comparison, it’s so easy to train people to handle an A350. But when the A380 came to Air France in 2009, it replaced two aircraft types, so on the cost side, it wasn’t too bad. Since the efficiency of the A350 and the 787 is the same, but with less capacity and more flexibility, you can put them on any route. So, of course, the A380 is no longer useful. And we have all kinds of problems with it – related to the structure, the engines. And not only now when the aircraft get older – it has always been difficult with the A380.
But still, it creates positive emotions for passengers.
Rigail: Customers love this aircraft and they still do. It’s quiet, it’s big, it’s beautiful. I like to see A380s in the morning when they take off. But now we feel it’s a constraint, but it’s a bit sad that Airbus now stops production. We still like this aircraft, but it’s not suitable to keep it while pursuing our strategy because you must put it on your busiest routes. The investment for cabin upgrades is huge – it would cost us €35m per aircraft, I did the research myself.
Air France always promised an upgrade of the 2009-vintage cabins would start “soon”…
Rigail: Yes, I said that myself and we were quite committed to do it. But when you look at the overall investment when you add the refurbishment and the heavy maintenance checks due soon, the cost is so high that we think it’s better to renew the fleet. It is just more beneficial for the years to come to have new generation aircraft. I think the A380 is just outdated now.
Air France still goes with Airbus, has just ordered the A220, are you also considering the A321XLR?
Rigail: Our medium-haul fleet will consist of one half of the Airbus A220 of which we will get 60 delivered between 2021 and 2025. The other half will be A320s and A321s that we will keep. The answer to the question by which aircraft type this half of the fleet will ultimately be replaced is in progress, we haven’t decided anything yet, but the A321XLR is an option. We know it is a fantastic aircraft. It can bring a new market proposition and we look at it with a special focus and are doing our studies. It would replace the older part of the fleet and it is a flexible aircraft. It is not a short-term priority, but rather the partial renewal of the medium-haul fleet replacing A318s and A319s with the A220s. That’s the first step. The next step will be to replace the A380, we study which aircraft will be suitable. Half our total fleet will be renewed by 2025, that’s a lot of aircraft, creating a huge pressure to build up the investment. So we focus to reduce our fixed costs.
But beyond this Air France is in the middle of a transformation process…
Rigail: We have to transform an old airline with all its management layers to achieve more efficient processes in operations. And what’s new is that we want to design our new organization and revamped processes engaging with the people that live these processes on a day-to-day basis. This is a total cultural change. It is not only Air France engaging in a cultural transformation; if you go to all the big companies in France, everyone has the same targets – to work quicker, to digitize and change the decision-making processes.
KLM seems to be far ahead of Air France not only in this respect. When do you expect Air France to be on eye level with KLM?
Rigail: I expect our core profit margin to match that of KLM within five years, by 2024. But the question remains if we will be able to totally eliminate the current gap between Air France and KLM with the economical context of France, the level of taxes and social charges in France. To totally eliminate this gap we need a strong alignment with the government on the strategy of the French transport industry. We just had two airline bankruptcies (Aigle Azur and XL Airways, the editor) and we will have a new eco tax like in Germany. But we need to work with the government to create a level playing field for competition.
Air France has taken over all of the group’s Airbus A350 orders. Aren’t there more unused synergies like this with KLM?
Rigail: This is an example of fleet simplification and this swap was a good move even if we keep the 787s in our long haul fleet as well, which is big enough for different types of aircraft. We are getting rid of the A340s and A380s and stay with A330s and A350s, and of course our large Boeing 777 fleet, plus ten 787-9s by early 2020. With three different kinds of cockpit crews, it will be a lot better than now. And in many other areas, both companies and also myself, we live synergies every day.