Air France to reposition itself in medium-haul market

Air France (AF, Paris CDG) is reportedly considering a dramatic overhaul of its medium-haul network as part of its new "Perform 2020" five-year growth plan. The market segment accounts for 40% of the airline's overall revenue but, despite four years of its "Transform 2015" comprehensive transformation plan, has yet to return to profitability.

Quoting unnamed sources close to the carrier's operations, the Les Echos newspaper says the new plan will see Air France transfer its entire European leisure market to its budget subsidiary, Transavia France (TO, Paris Orly), while all non-Paris CDG point-to-point flights will come under the domain of HOP! (France) (A5, Paris CDG).

Air France will transfer most of its Paris Orly domestic routes - excepting Nice, Marseilles, Toulouse Blagnac - and some European destinations to HOP! from next summer. In anticipation of the move, Air France will equip HOP!'s fleet with twenty of its A320-200s which, while operating in HOP! colours, will be manned by Air France crew.

In a bid to wrestle back some market share lost to the likes of Ryanair (FR, Dublin International), easyJet (London Luton), and Wizz Air (W6, Budapest), Transavia France could be merged with its sister KLM Royal Dutch Airlines (KL, Amsterdam Schiphol) subsidiary, Transavia Airlines (HV, Amsterdam Schiphol), to create a more potent budget carrier with a fleet that could grow to 200 aircraft in the medium term. Seven additional B737-800s are already scheduled to arrive during summer 2015 adding to the 14 already in service. However, owing to funding constraints, the airline would be open to joint-ventures with other entities.