Air France takes cue from low-cost operators and cuts fares

Ziarul Financiar 16.11.2009
Airline operator Air France-KLM, which operates five daily flights on the Bucharest-Paris route and three flights on the Bucharest-Amsterdam route, will cut 20% off business class ticket fares starting in April 2010. "Almost 60% of the passengers are business travellers, while the rest are holidaymakers. With the new fares that we are introducing next year on all routes, we are trying to win back clients, as well as target potential clients in small and medium-sized enterprises, who tend to travel low-cost," said Erik Varwijk, deputy general manager of Air France-KLM, who added that the new business model entailed lower fares on all aeroplane tickets. He added Air France-KLM was "fighting" both low-cost airlines, and high-speed trains in European countries, with competition being very strong. "The entire air transportation market is on a decline. The 10-15% revenue decline as a result of price cuts is in line with the general trend of the market. Next year we will come with 20% lower prices on average, both for the business class and for the economy class," specified Varwijk, adding that the new price policy would apply to all European routes, including those operated in Romania. The business model of low-cost carriers, which generates traffic rises even in a year of crisis, has been increasingly used by large traditional airlines. Amid a decline in the number of passengers carried, companies such as British Airways, Air France-KLM, as well as Romanian national carrier Tarom found themselves having to draw from the price policy of low-cost operators.