Air France eyes late Q3 FY17 launch for Boost project carrier
Feb 11, 2017: Franck Terner, CEO, Air France (AF, Paris CDG), has formally presented a draft of the carrier's low-cost long-haul virtual carrier project to its SNPL and SPAF pilot unions for consideration.
It is open for signature until 24 February. This period could be extended if the unions opt for a consultation with the pilots.
A cornerstone of Air France-KLM Royal Dutch Airlines chief executive Jean-Marc Janaillac's Trust Together restructuring plan, the Boost project will allow Air France to compete with the Low-Cost and Gulf carriers in "ultra-competitive" medium-/long-haul markets ex-Paris CDG where it has been forced to withdraw.
This draft agreement should enable the creation of the “NewCo”, a wholly-owned subsidiary of Air France. With the Boost project, Air France will be able to resume the long-haul offensive and defend the feeder network at its Paris-Charles de Gaulle hub, with lower costs.
To placate union concerns about any shift in Air France's market focus, NewCo’s fleet will not exceed eighteen medium-haul and ten long-haul aircraft. Air France will also retain ownership of the traffic rights the NewCo carrier uses.
Under the proposed labour contract, the NewCo’s flights will be operated by Air France pilots according to Air France-stipulated rules of use and pay. Productivity and efficiency improvement incentives will ensure Boost’s pilot cost-savings and will also contribute to Air France’s overall competitiveness. Additionally, a profit-sharing bonus will be offered to all Air France staff this year, dependent on Air France's results.
“This draft agreement is a balanced compromise which reflects the constructive spirit in which we have conducted these negotiations. It must enable us to build the future of Air France, with the pilots and all company staff, on the basis of a solid project of growth and recovery” said Terner.
Cabin crews will also be recruited and paid at market costs which are reported to be 40 percent cheaper than Air France's mainline unit.
Air France's pilots' unions have the ability to block any project modifying the airline's business scope - including that of Boost, in wake of their majority voting power.