Air France-KLM’s new chief executive has made clear he doesn’t understand the millennial-oriented carrier’s identity.
Air France-KLM is considering shutting down its newest brand, sources in the company have told the news agency Reuters and the French newspaper Le Figaro – a move that could help the group’s new CEO Ben Smith tackle Air France’s underperformance.
A decision to scrap the millennial-oriented Joon has not yet been made, but even thinking about it is a sign of the Canadian chief executive’s determination to work head-on to turn around Air France’s weak profitability instead of simply offering lower-cost products.
In the Nordics, Joon flies between its base at Paris Charles de Gaulle and both Oslo and Bergen, with flights to Stockholm due to start on March 31, 2019.
The new boss “has made clear he doesn’t understand the positioning or identity of Joon”, an Air France source tells Reuters. “It’s a question he’s raised internally, several times.”
“The intention to get rid of Joon would be understandable,” according to an HSBC aviation analyst questioned on the issue by Reuters. “You’ve got a whole new business created with all the complexity and cost, just to get a handful of cheap cabin crew – that’s not rational.”
“What’s this Joon thing?”
Unions say that there is growing discontent among the ranks of Joon’s cabin crew over pay and conditions.
“When Ben Smith got here, he said to us, ‘What is this Joon thing?’” an Air France union representative recalls. “That’s more or less what we’ve been saying all along.”
Smith was hired in August after a mercurial period at Air Canada, to try to bring prosperity back to the group following an era of costly strikes and the resignation of his predecessor.
He has said he wants to bring the two parts of the company closer together, in effect making Air France, which recorded a 3.7% profit margin last year, a bit more like KLM, whose 8.8% margin was more than double Air France’s.