Air France KLM began flights to its ninth Chinese destination – Wuhan – from Paris yesterday. UK & Ireland general manager Henri Hourcade tells ABTN about the company’s expansion to key business travel destinations and its regional strategy around the UK
Why has Air France chosen Wuhan as its latest Chinese destination?
Wuhan is the biggest city in central China with a population of 10 million. It’s an industrial city with a lot of science and automotive businesses. It’s also a big hub as it’s on the Yangtze river. It’s bigger than Chengdu which we started in 2008 with KLM from Amsterdam. We think it will be a strong business travel destination. It’s our ninth destination in Greater China which includes Taipei in Taiwan. We are flying three times a week from Paris Charles de Gaulle with a Boeing 777. KLM is also making the Amsterdam-Taipei service direct instead of going via Bangkok. This started last week and makes KLM the only carrier linking Taiwan to Europe directly. China Airlines stopped flying on the route in March.
How important is China as a destination to Air France KLM?
We started flying to China a long time ago – it was 1966 when we became the first European airline to open Shanghai. Last year we carried two million passengers on Air France and KLM between Europe and China. Our China flights link very well with our regional flights from around the UK – we fly from 20 airports in the UK to our two hubs in Paris and Amsterdam. We are the biggest European carrier to China, especially when you take into account our joint ventures with China Southern and China Eastern, which gives us a 40% market share from Europe to China.
What is your strategy for your UK business over the next few years?
We have a very strong regional strategy which we use to feed our two hubs – we fly from more UK airports than British Airways. For example, we have 11 flights a day from Birmingham where there is no BA and we fly from Cardiff and Bristol where there is also no BA. We also fly from airports such as Norwich and Durham Tees Valley. We offer passengers the opportunity to fly from their doorstep with easier connections than going through Heathrow.
What’s your view on the impact of IAG buying Bmi on the UK aviation market?
It will reinforce the position of BA in London which is one of the biggest markets and has a very saturated infrastructure. BA is buying the slots and you can see why it is a rational move for them. BA will be a strong opponent for Air France-KLM.
How has business been for Air France KLM during 2012 so far?
We can all be afraid of what tomorrow will bring, but the overall situation is so far, so good during the first three months. We are booming out of the destinations we are developing in China, South America and Africa. But overall global capacity will not grow and may be reduced by 1-2%. The major reasons for this is the rising cost of fuel and the fact that we have promised to reduce our costs drastically as we look to reduce our debt by around €2 billion. For example, we may reduce North America by using more Delta capacity over the Atlantic.
Apart from China, which other areas are you expanding in around the world?
We are also increasing in Africa and South America. We are opening Lusaka (Zambia) and Luanda (Angola) from Amsterdam. Luanda is a big oil and gas destination and we are becoming a strong actor there with four weekly flights. BA has twice a week from Heathrow to Luanda but the oil and gas industry is not mainly in London, it’s around Aberdeen and the north-east coast where we are very strong because we have flights from Norwich, Humberside, Teesside, Newcastle, Edinburgh and Aberdeen. We have the best network for oil and gas as no other airline has this coverage along the North Sea. Brazil has also been booming for us.
What onboard innovations are you planning across both airlines?
Air France’s Premium Voyageur which is a premium economy seat – offering 40% more space - is being rolled out on all long-haul aircraft. On KLM, we have Economy Comfort on long-haul flights which is the same seat as economy but has more legroom. These products are working very well as a lot of customers are looking for an intermediate solution to flying in business. For business class, we are looking at putting in a new generation of seats in 2013 for both airlines which will be a fully lie-flat bed. Gastronomy is very important for us – Air France is always expected to have good food and we are currently working with Michelin-starred chef Joel Robuchon while we also have a Michelin-starred Dutch chef working with KLM. We have a new lounge opening at Charles de Gaulle in July as part of the hub enhancements which will make connections faster at the airport. The lounge will be the largest in the network at 3,000 square metres and includes a Michelin-starred restaurant.
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