Along with KLM, Air France created one of the world leaders in air transport – passengers, cargo, and maintenance.
With the attacks on the World Trade Center (2001) and the United States' war in Iraq (2003), traffic fell and the price of oil climbed. The air industry fell into one of the worst crises in its history. Once again, the biggest players were the worst exposed, and were simultaneously under threat from the arrival of low-cost airlines. On the domestic market, Air France also had to compete with the rise of the TGV train.
It was goodbye to Concorde. The 'beautiful white bird' made its last commercial flight on 31 May 2003, nearly three years after the crash at Gonesse in France.
With its policy of 'sustainable growth', Air France adapted. Better still, it became stronger. Internationally, the airline redeployed itself in Asia and Africa. In France, it bought regional airlines (BritAir and Régional) and took a complementary approach to the French railway system, connecting the TGV to the Paris-Charles de Gaulle hub.
Air France's upscaling was also due to its strategy of building alliances. From 2000, it was at the heart of SkyTeam, a global alliance forged with Delta Airlines, Aéromexico, and Korean Air. SkyTeam now has 20 member airlines.
A group is born
In 2004, Air France launched a public exchange offer for KLM shares, which led to the two companies merging. The birth of the Air France-KLM group was followed by the privatization of Air France the same year. In this period, the Group became the number one airline worldwide in terms of turnover, and the third-largest in terms of the number of passengers transported (66 million on 550 aircraft in 2003). Air France-KLM's global network was coordinated around the two hubs at Paris-Charles de Gaulle and Amsterdam-Schiphol, which are among the four biggest hubs in Europe. Flights to or from these European hubs are organized around six or seven connecting banks. Currently, around 45% of Air France customers are connecting passengers, and this figure stands at 60% for KLM Royal Dutch Airlines.
After the merger, the Air France-KLM logo was placed on the noses of aircraft, and the winged seahorse was placed on the engines. The AF acronym figures prominently on the airline's flag and logos. The new livery was adopted in February 2009, the same date as a change to the Air France brand's graphics: the font, AIRFRANCE as a single word in capital letters, and the red accent after the name.
With its 24.5 million members, Flying Blue – the Air France-KLM Group's loyalty programme – brings together 35 airlines and over 100 non-airline partners. It is made even more attractive by the fact that it is the most powerful loyalty programme in Europe.
In 2007, Air France launched its own low-cost subsidiary, Transavia, based at Orly airport.
Set up in 2008, Air France, Delta and Alitalia’s joint venture is now the most advanced cooperation model. It involved the joint operations and the sharing of revenue and costs of over 250 transatlantic flights operated on a daily basis by Air France, Delta and Alitalia.
At the end of the 2000s, Air France was faced with new challenges. In 2009, flight AF447 between Rio and Paris crashed into the sea. In addition, the economic context was worsening considerably. The airline responded with a restructuring plan.
The Air France-KLM Group found itself in a worrying economic situation, with debt that had tripled in four years, increasing losses, and a product that was beginning to lose ground compared to the best market standards. To return to competitiveness, the airline initiated a development plan, Transform 2015, based on productivity and cost reduction. The efforts made put Air France-KLM back on track.
Although the Transform 2015 plan allowed the airline to begin to reduce cost gaps, competitive pressure (low-cost airlines in Europe, Gulf airlines to the East) and situational difficulties (lower revenue from passengers) encouraged Air France to continue and step up its efforts.
Meeting the challenges of growth and creating the conditions to win back markets. Air France-KLM's ambition is to strengthen its position as a global giant with a European basis: “becoming closer to Europe, bringing the world to Europe, and welcoming the world in Europe”. Perform 2020 allows the airline to act on major drivers: competitiveness – improving operational performance and costs; a focus on the customer (investments devoted to improving the customer experience: lounges, new cabins, in-flight entertainment, meals on the ground and on board, digital elements); our way of working – a fresh look at our organizational methods in order to optimize them, becoming even more efficient, flexible and responsive.
Air France-KLM is relying on a number of its assets to support its transformation work: innovation, openness, winning spirit, a caring attitude and reliability all run through its culture and its history. Its international network – which it is continuing to expand – and its current and future alliances help Air France-KLM to overcome these new challenges.
The Group uses its portfolio of 7 brands (Air France, KLM Royal Dutch Airlines, HOP!, Transavia, AFI KLM E&M, Air France-KLM Martinair Cargo, Servair) to enable the Group to meet all the market's needs with offers that are both well-positioned and complementary. Each of these brands innovates and develops in line with customer requirements, providing unique services.
The Art of travel à la Française
Air France is a caring, French-inspired global airline whose high standards turn travelling into a moment of enjoyment and elegance – the best possible travel experience. The promise is reinforced by Air France's slogan: France is in the Air.
Air France is moving its products and services upmarket with a new spirit – French-style art of travel. This new phase is taking shape through three key values: attention, high quality, and enjoyment. For customers, these values confirm our caring attitude and demonstrate Air France’s expertise.
In March 2016, 30 Boeing 777s will be fitted with new cabins and will fly to 28 destinations around the world. Each cabin has been meticulously redesigned so customers can travel in optimum comfort in all cabins: La Première offers a designer cabin, Business has been transformed into a cocoon in the sky, Premium Economy is more comfortable than ever, and Economy has new seats. This move upmarket can also be seen on the medium-haul network. Since April 2015, it has boasted a new offer and new, entirely redesigned seats have been fitted in 24 Airbus A319s – and from the first half of 2016, 25 Airbus A320s, totaling 7,800 seats, will get the same treatment. Last but not least, HOP! Air France has redesigned its entire Navette shuttle service to meet customers' needs in terms of flexibility and punctuality.