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By Tim Hepher
PARIS, Sept 4 Air France-KLM announced
plans on Thursday to speed up the development of its low-cost
unit and cut back freighter operations in its latest efforts to
Europe's second-largest traditional carrier by revenue said
its board had approved a plan to open new bases under the
Transavia low-cost brand in Europe.
By expanding its low-cost operations, Air France-KLM is
following the example of German rival Lufthansa, which
is expanding budget services via its little-known Eurowings
carrier and considering a budget long-haul unit.
The project is part of the Franco-Dutch group's new
strategic plan, Perform 2020.
Few details of the plan were announced ahead of a
presentation on Sept 11. French daily Les Echos earlier reported
that new bases would be opened in Lisbon, Porto and Munich.
In July, Air France-KLM had pledged action to recapture
market share from low-cost rivals.
Meeting on Thursday, the airline's board also agreed to
reduce its fleet of all-cargo planes following a strategic
review of the loss-making business.
By the end of 2016, the group expects to have cut the fleet
to five full freighters - two Boeing 777Fs in Paris and 3
Boeing 747ERFs in Amsterdam - from 14 in 2013.
Full-service European airlines have been squeezed by
competition from both low-cost carriers and fast-growing Middle
Freight carriers have also lost business to shipping and to
the bellies of larger passenger planes, hurting volumes and
profits for cargo-only airlines.
But Lufthansa and Air France, which have both warned on
profit in recent months, are hampered by powerful unions in
their efforts to lower costs.
Pilots at Lufthansa on Thursday announced more strike action
in a row over retirement benefits, while Air France pilots are
planning a week-long strike later this month.
Stepping up the pace of full-freighter cuts already
underway, the airline said it had been forced to act by a
"slower-than-expected recovery in demand".
(Reporting by Tim Hepher, Victoria Bryan, Maya Nikolaeva,
Editing by Laurence Frost)