Air France-KLM believes it is in a good position to fend off competition from low-cost carriers who are keen to build capacity in Europe again.
Speaking to Bloomberg, Ben Smith, group CEO, said saturation in terms of capacity at both Amsterdam Schipol and Paris left no room for low-cost carriers.
He added that the relatively small size of KLM’s business cabins in Europe leaves it less exposed than British Airways or Lufthansa.
“In Paris - France is the largest inbound tourist market in the world, we have Orly for local traffic and Orly is saturated so low-cost airlines that would like to increase capacity cannot do so at Orly, and Charles de Gaulle is very expensive to operate out of and we’ve seen limited interest on the part of the low-cost carriers.”
Smith also said previous pilot union restrictions on its own low-cost brand Transavia had now lifted and added: “we now have a low-cost unit that can help us fend off some of this low-cost aggression.”
Responding to a question about potential conflict in Ukraine, Smith said the group was watching the situation very closely and would “adapt when and if necessary.”
Last week KLM cancelled a flight to Kiev and said at the time that it was unclear when the carrier would fly to the destination again.
He also commented on the group’s plan to raise funds to pay back state aid: “The assumption right now is that Asia will remain closed at least for the next few quarters. We are looking at how we can redeploy our capacity. There are fewer airlines that used to fly transatlantic so we see a nice opening for us to redeploy some capacity on the transatlantic route. Paris is a big leisure market so we’re not as affected by business traffic, so we think the timing is right to get into perhaps a rights issue or something along those lines.”
Smiths comments came after the group announced its Q4 and full-year 2021 earnings.