"I do not want to discourage you from investing in the airlines one day - quite the contrary - but it is true that when prosperous margins remain low, the average net result of our industry generally does not rise more than that of a 2% turnover."
Jean Cyril Spinetta, lecturer at the Columbia University, New York, November 16, 2004.
In the early 1990s, the airlines industry was experiencing serious difficulties. The economic downturn occured simultaneously with the liberalization of the sector. In 1993, Air France was sinking into crisis. Yet, within a decade, the company merged with KLM in 2004, only to become the European leader since 2000 and the world's leading company in terms of turnover. Today, Air France-KLM has been encountering problems of growing competition and an unfavorable environment.
The statement by Jean Cyril Spinetta, current CEO of Air France KLM at Columbia University, is symptomatic of the difficulties faced by the aviation sector. Interest in aviation is questioning why airlines can not generally be very profitable. Time leads to the concentration of airlines to increase their profitability. Merging Air France and KLM has enabled the group to become a leader in its field. What strategy can the leader envisage to maintain the lead in an increasingly competitive environment while generating high margins?
[...] Its history: Air France was founded in 1933 following the merger of the four largest airlines at the time: Air Orient, Air Union, the C.I.D.N.A and the Farman lines. The State holds 25% of the shares. The power of Air France increased following the acquisition of the company Aeropostale the same year. Logo of Air France before the merger Then at the end of the Second World War, Air France was nationalized and became State property. The company was entrusted with the entire French air network to the State. [...]
[...] Good image in the eyes of Low return on capital clients: proof of quality and employed reliability. Personnel expenses increase Diversified offers. day by day Relatively new fleet introduced on a regular basis. Bibliography Internet The blog of consumer marketing. New Air France autumn 2008 campaign. http://www.aboutmarketing.fr/2008/10/31/nouvelle-campagne-air-france- rentree-2008/ accessed 12/07/2008 National Federation of Commercial Aviation. The competitiveness of air transport in France.
[...] It is through innovations such as service quality and proximity to its customers that Air France - KLM hopes to compete with low-cost airlines and TGV for the medium-haul and US companies and new competitors such as companies in the Gulf and emerging ones in Asia for the long haul. Concorde 380 The Skyteam alliance has enabled the group to offer its customers a wider range since the primary purpose of the alliance is to allow code sharing between different members allowing a client to travel around the world through one of the other alliance airlines of Air France - KLM. [...]
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