Air France Unveils Marseille as First Regional Base

Air France has confirmed that Marseille has been selected as the airline’s first regional base as it looks to expand its network from outside of the capital, Paris. The carrier has been discussing the revised business model over the past year, looking at offering point-to-point services from the regions to international markets, fighting to win back some of the market share it has lost to low-cost rivals over the last few years.

Under the title ‘The Air France offensive in Marseille’, the airline confirms that from October 2 it will introduce 13 new non-stop flights from the southern French city, increasing seat capacity by almost a third. The new flights include domestic links to Mulhouse (located on the border with Switzerland), Biarritz and Brest; flights to Athens, Copenhagen, Düsseldorf, Eindhoven, Milan Malpensa, Moscow and Prague; Casablanca in Morocco and the Mediterranean destinations of Beirut and Istanbul. It will also boost capacity to existing domestic markets with over 80 per cent more seats available on some routes.

“With this new project involving all its employees in France, Europe and the Mediterranean, Air France intends to initiate a virtuous circle that will enable its medium-haul operations to regain profitable growth, the foundation of the Air France-KLM group's strategy, while offering customers attractive fares and ensuring long-term employment” said Pierre-Henri Gourgeon, Chief Executive Officer, Air France-KLM.

The implementation of this new business strategy is based on achieving a significant reduction in operational costs, of around 15 per cent, according to the carrier. This will be achieved by using a single aircraft type (Airbus A320 with between 142 and 178 seats), optimising fuel consumption and rationalising maintenance costs; an optimised daily use of aircraft with departures earlier in the morning and return flights later in the evening as well as turnaround times reduced by five minutes at stations; cabin and flight crews based in the provinces; and optimised use of human and material resources on the ground throughout the day.

Marseille is likely to the be the first of four regional hubs that Air France will develop in the country; the others are likely to be Bordeaux, Nice and Toulouse and new services to destinations across Europe and the Mediterranean could be added from these cities for summer 2012. “In the long term, Air France intends to increase seat capacity by over 30 per cent by launching 54 new non-stop routes on departure from Marseille, Toulouse, Nice and Bordeaux to major cities in Europe and the Mediterranean as well as by increasing capacity on domestic routes,” said the carrier.

The French national carrier has come under increasing pressure in both the domestic French and intra-European markets. Over the past five years its share of the domestic market has slipped from 90.5 per cent to 80.7 per cent. Its main competitors have been easyJet which has grown from a 5.9 per cent share to 12.8 per cent of the traffic and Ryanair which now has a 3.2 per cent share. It is the same when you look at the wider European market (including France). Five years ago Air France had a 45.9 per cent share of this market, a figure that fell to 38.5 per cent in the past 12 months. Again, it has been the low-cost carriers that have hit its traffic; easyJet and Ryanair have succeeded in diluting Air France’s traffic with growth of 6.9 per cent and 2.2 per cent respectively during that period.

At Marseille Provence Airport, Air France remains the largest operator with over 250 weekly flights to 12 domestic and international destinations, but has faced increased competition since the opening of the facility’s dedicated budget airline terminal, MP2, in September 2006. The table below shows the airline’s estimated O&D traffic from/to Marseille and how it has changed over the past five years. The impact of low-cost rivals, in this case Ryanair which opened a base from winter 2006, is clearly evident as its share of traffic has slipped by almost a quarter from 50.3 per cent in 2006 to just 37.8 per cent last year.

Almost half of the new routes from Marseille will be to destinations not currently served although two will place Air France in direct competition with Ryanair. These are the flights to Brest and Eindhoven, destinations served seven and four times weekly by the Irish budget carrier, respectively. Other routes it will face competition comprise Casablanca (Royal Air Maroc and Jet4you), Prague (Fellow SkyTeam member Czech Airlines) and Mulhouse and Milan Malpensa (regional carrier Twinjet).