In the week of International Women’s Day, it was apt for one of the key interviewees at this week’s CAPA Live virtual conference to be Anne Rigail, CEO of Air France. Rigail was interviewed by Jonathan Wober, CAPA’s Chief Financial Analyst.
In the wide-ranging interview, Rigail looked back at her 30 years at Air France and at Air Inter before that. When asked about the major changes she has seen during this time, Rigail focused on three things – the growth of the Air France hub at Charles de Gaulle (CDG,) the growth and impact of low-cost carriers and finally, the impact high-speed train services have had particularly on demand for domestic flights.
The pandemic has had an impact on the whole aviation world and Air France’s current capacity is running at 40% of ‘normal. This drops to around 30% for medium-haul and domestic flights. VFR traffic has held up better and this explains why Air France’s capacity has not been cut as much as other EU airlines. “Air France has a diverse network across business and leisure routes” Rigail noted. “Geographically, the Caribbean, Indian Ocean and Africa have proved resilient during the crisis due to strong VFR traffic.”
Harmonised policy for travel
Regarding full network recovery, Rigail says that “it would be a good thing” if Air France could get back to 70% capacity by Q3 this year. Rigail’s expectations are that full demand will not return until 2024 and business demand will start to return “from mid to end 2021.”
The recovery for Air France and in Europe in general has been delayed by a few factors including new Covid-19 variants, leading to the tightening of travel rules around Europe and beyond. Rigail has called for governments, especially in Europe, to have a harmonised travel policy, so that recovery in the spring and summer this year can happen in an organised way.
Vaccination passports have been proposed by several airlines, with Qantas one of the first to advise that all passengers travelling to Australia, when borders reopen, will require one. Rigail very much supports this approach to get passengers back in the air.
There has been a lot of debate as to whether the pandemic will change the way people travel through hubs, but Rigail is adamant that hubs have a future. The hub model has proved to be “quite resilient during the crisis,” says Rigail. “The flows (into the CDG hub) were narrow, but the hub helps us focus on what flights (to operate) and allowed us to have a positive contribution from a flight, thanks to the hub.”
Referencing the two airports Air France operates into in Paris, Rigail stated that the carrier continues to see a role for both CDG and Orly (ORY.) CDG “is a total hub,” says Rigail. “50% of the (passenger) flows are connecting and 40% are point to point traffic. CDG is both a hub and a local airport.” Going forward, flights into ORY will continue but Air France has ceased operating any unprofitable flights.
Aviation and sustainability
Moving onto the subject of aviation and sustainability, Rigail warmed to the idea in the future of flying both electric and hydrogen powered planes and noted that “they could be used on short-haul domestic routes to drive down emissions.” In the interim, Rigail noted, that under the government loans secured last year to help Air France through the pandemic, there is a requirement to replace domestic services with trains for routes with a duration of up to two hours, which will help the carrier meet the government’s target of a 50% reduction in aircraft emissions by 2030. In addition, sustainable aviation fuels will also help drive down emissions and the introduction of new, more efficient aircraft such as the A220 will also help. Rigail noted that “we need to be competitive to be sustainable and to get passengers, we need to be sustainable. They are inextricably linked.”
Rigail’s interview covered a lot in the 34 minutes but what was clear is that aviation will survive and Air France will remain a key international airline but the industry we know today may look a little different in 30 years’ time.
CAPA’s next live event takes place on 14 April. Click here for more details and for free access to the event.