Air France will lay-off 465 domestic ground staff and reduce by 15% its short-haul capacity. The decision comes following the airline’s new goals to cope with the competitive nature of the transport industry in Europe. (…)
The airline conceded that two main things were causing these lay-offs to happen. Firstly, there is the rapid development of low-cost carriers in the region, which has seen “aggressive pricing policies and often with the help of public authorities.”
About 90% of Air France’ staff are based in France, meaning that the majority of airlines growing in the country have “not contributed to developing employment in the regions where they operate, taking advantage of European mobility and basing employees in jurisdictions with lower labor costs,” as noted by Rigail.
The second element comes from its own domestic competitors: high-speed trains. The past five years have seen Air France’s domestic network become affected by high-speed train routes.
The French Government has said that that high-speed train capacity has expanded over the years, and conceded that it “has become Air France’s main rival on the domestic network.”
The trains have also been able to operate freely without taxes or charges that target the air transport industry in France.
Statistics show that the launch of four new high-speed train routes in 2016/17 will attract up to 4.7 million passengers by next year—most of which could easily be deducted from Air France’s forecasted capacity.
The introduction of these new train alternatives translated into an approximate loss of 90% of market share in the domestic front.
However, the airline can still claim it has about 65% market share in France, although this figure may continue to drop at increased rates.