How important are the Caribbean and South American markets for Air France (AF)?
They are very important for Air France-KLM because South American countries are seeing tremendous economic growth; air traffic is also growing, especially to Europe and Asia, where we are well positioned in terms of routes, frequencies and market share.
At present, AF-KLM’s market share between Europe and Latin America stands at 15%; this increases to 30% with other SkyTeam members, and this is much higher than competitors such as Iberia and Lufthansa. Turnover on these routes is approximately €1 billion annually and is increasing 15% year on year.
How are you working with KLM to optimise your respective networks?
We are always looking for new ways to compliment one another’s networks.
When the airlines were merged in 2004, Air France’s South American network was much bigger than KLM’s and each had its own niche market; with AF very strong in services to the French Indies islands of Martinique, Guadeloupe and St Maarten (this was shared with KLM), while KLM was dominant on routes to Curaçao, the Dutch Antilles and Bonaire. In South America, coverage was more mixed, with both carriers operating to the major capital cities, with a much bigger part for AF.
Today that trend continues with AF controlling some 70% of the group’s operations to South America and the Caribbean.
Can you tell us more about your Brazilian operations?
Brazil is one of our most promising markets. It represents 50% of our total Latin American operations with 28 weekly frequencies from Paris and generates approximately €500 million annual revenue, and we expect both traffic and revenue to increase when Brazil hosts the 2014 FIFA World Cup.
Because we are operating the maximum number of frequencies allowed, AF now flies the biggest possible aircraft on this route, the B747 and B777, and we are currently awaiting clearance to operate the A380 to Rio, which we hope to begin in 2014.
In addition, we have operated a codeshare with Brazilian carrier Gol Transportes Aéreos since 2009 on a number of domestic routes.
When assessing the viability of a new route, what elements do you typically look for?
The current competitors, the potential market share calculated by Quality Service Index (QSI), including traffic induction and connections, the unit revenue, costs and profitability and its compatibility with AF and KLM’s existing networks.
Are you considering deploying an A380 in these markets? Yes, we are looking at operating an A380 to Rio de Janeiro, São Paulo and Mexico City in 2014–2016. A lot will depend on whether the necessary airport infrastructure to handle the aircraft is put in place in time. We are also keeping a watching brief on the situation with regard to the ongoing privatisation of Brazil’s main airports and the modernisation of others in the region.
How would you describe yourself in three words?
Professional, passionate and faithful.
How is doing business in Latin America different to Europe?
Personal relationships are more important in Latin America than they are elsewhere. It is a dynamic, exciting and emerging market and, as such, doesn’t have the capacity-limiting constraints of the more established regions of Europe and North America. If you are dedicated and a hard worker, there is great potential out there.
Why did you decide to join the aviation industry?
After studying engineering and business administration I joined Air France in 1979 because I was passionate about aviation. It connects people of different countries and cultures, it is interesting from an international legal and economic context, and it is a constantly developing industry where new ideas and innovation is welcome. I have been very lucky to have been offered many different jobs in my more than 30 years here.