Air France will cut its short-haul domestic capacity by 15 percent over the next two years, citing competition from other airlines and France’s growing high-speed railway network as the main reasons. The decision had been anticipated for some time but announced on May 13 after AF CEO Ben Smith met with the Central Social and Economic Works Council.
The reduction will affect a maximum of 465 jobs on the domestic network, especially ground personal which has been over-staffed. All reductions will be made on a voluntary basis in consultation with unions.
Cutting the domestic network is an inevitable step for Air France as the airline has been confronted with a major change of its internal landscape. Air France HOP connects 36 airports on a daily basis, while also offering the Navette product for business travelers from Paris Orly to Marseille, Nice, Toulouse, Bordeaux, and Montpellier. Last November, HOP announced its link-up with OUIBUS shuttle bus services via Lyon to six cities.
Over the years intra-France air travel has seen increasing competition from the TGV high-speed network that connects the North to the South. The completion of new routes from 2020 is expected to make another 4.7 million passengers opt for travel by train, which will be well received by environmentalists. Already Air France claims to have lost 90 percent market share on routes to Paris under a two-hour journey.
The arrival of more low-cost competitors has also hurt Air France HOP. On average the national carrier still has a 65 percent market share but nevertheless, it has lost EUR 717 million on its domestic network since 2013. Last year, domestic operations were loss-making at EUR -185 million, despite restructuring the network and capping capacity. Also, on February 1, Air France announced it would remarket HOP! as Air France HOP to increase clarity with passengers.
Air France has not announced how the network reductions will affect the domestic fleet, which on January 1 consisted of 82 aircraft (13 ATR turboprops, 25 Canadair CRJs, and 44 Embraers). In 2018, 11 regional aircraft left the fleet.
