Air France Swot analysis – Swot analysis of Air France: Air France is a subsidiary of Air France-KLM Group. It is located in Tremblay-en-France. It was established in the year 1933 alongside KLM which was among the biggest air carriers in the world in terms of passengers and revenue.
The airline is worldwide and provides passenger and cargo services to 314 destinations across 116 countries. The airline has three thousand pilots as well as 25,000 staff on the ground working in tandem, and in 2017 it transported 98.7 million people. The airline places the needs of its passengers at the center of its strategy and has been awarded numerous times across a range of areas.
Air France fun facts: In 1972, Air France set up a cargo division and developed this activity, which grew considerably. In 1974 the Boeing 747 freighter, known as the Super Pelican joined the fleet of Boeing 707 freighters known as the Pelican (1965). Air France thus became one of the leading airlines for the transport of air freight and mail.
About Air France – SWOT analysis of Air France
Company: Air France, S.A.
CEO: Anne Rigail
Founder: Air France–KLM Group
Year founded: 7 October 1933, Paris, France
Headquarters: Tremblay-en-France, France
Annual Revenue: Euro€16.1 billion
Profit | Net income: Euro€266 million
Number of employees: 84,602
Products & Services: A full-service airline typically offers passengers in-flight entertainment, checked baggage, meals, beverages, and comforts such as blankets and pillows at the ticket price.
Air France Competitors
Competitors: Southwest Airlines | Delta Air Lines | Lufthansa Group | Turkish Airlines | American Airlines | International Airlines Group | British Airways | Kenya Airways | Air Canada | JetBlue | KLM
SWOT analysis of Air France – Air France SWOT analysis
SWOT Analysis Of Air France is brand-based. SWOT Analysis of Air France evaluates the brand’s strengths, weaknesses, opportunities, and threats. Advantages and disadvantages can be attributed to internal factors while opportunities and threats can be attributed to external factors. We will be discussing Air France’s SWOT Analysis. Below is the detailed SWOT Analysis of Air France.
Let’s talk about Air France’s SWOT assessment.
Strengths of Air France – Air France SWOT analysis
1.) Customer Service
The airline has employed technologies to offer top-quality services to its clients. The app is mobile-friendly as well as a beautiful website accessible in 9 languages. All services are offered via these platforms. It has harnessed the power of the digital age.
On flights, passengers can send emails to others or friends and can take advantage of a broader selection of in-flight entertainment. Additionally, food ordering is possible using the app. The airline provides its customers with a luxurious flight experience, complete by offering a new and comfortable cabin experience. They also have special airport lounges for customers from all over the world and make use of the latest technology to improve the traveling experience.
2.) Airline’s hubs
It is the CDG (Paris CDG) and AMS (Amsterdam Schiphol) both are listed as Europe’s top five airports according to the total number of seats. Air France is the leading airline in both airports. Air France uses a hub and spoke models to run their operation as well as has developed experience in integrated twin hubs. Both airports have efficient schedules that are coordinated and provide a strategic advantage for airlines
3.) Technology integration
Air France has recently launched Joon which is a brand new low-cost subsidiary. It has targeted younger consumers and has been designed to attract young people. Technology allows the user to design a unique journey that improves the user experience.
The primary plan for Joon is to emphasize Artificial Intelligence and onboard connectivity. Joon is currently working on a customer-centric strategy to increase interactions between customers and its business and is using AI-enabled chatbots and working on e-tags as well as bag tracking software.
Weaknesses of Air France – SWOT Analysis Of Air France
The airlines are facing a lot of opposition from LCC airlines as well as the declining preference of customers to travel through trains and other modes of transportation like carpooling, etc. The airline is facing increasing competition in the flow of traffic across Europe, the Asia Pacific region, and Europe through the global super-connectors called”the Gulf Three: Qatar Airways, Emirates & Etihad as well as airlines like the Turkish airlines. One method Air France can compact such competition is by forming joint ventures with local airlines. Other competitors comprise British airlines, Virgin Atlantic and United Airlines.
Lufthansa earns $8.7B more in revenue than Air France-KLM. Delta airlines earn 163% of the revenues of Air France-KLM. When the offset season for passengers begins in order to ensure regular cash flows to the activities that Air France sold its catering operations and cut the capacity of its cargo, lapses such as this are the reason why it isn’t as successful as its rivals.
2.) Insufficient performance and poor management of subsidiary companies
The airline is struggling with high operating costs as well as strategic mistakes and unhealthy relations with the labor. Its Airlines recently announced a reduction in the number of flights it operates from Paris to Tehran after it switched its operations to Joon, it’s subsidiary. Joon.
Although Air France is the region’s largest carrier in terms of passenger miles, it trails behind its competition Lufthansa as well as the International Airlines Group (IAG), and Air France generates one-third of the revenue of the two. Joon, the millennial-friendly low-cost carrier offers virtual reality headsets and craft beers to its customers. However, it’s causing branding operational confusion for airlines. Air France needs to be an independent, unifying LCC.
3) Pilot strikes
The strike of Air France pilots had a negative impact on the airline’s operational performance, leading to losses. The airline had planned to establish its low-cost subsidiary Transavia in France however due to the conflict, the management had to pull back plans for the planned launch activities. The agreement with pilots would permit the launch, but it would restrict Transavia, France to grow its fleet to 40 aircraft. Since the whole authority was given to pilots, the airlines were required to restrict their strategic goals.
Opportunities of Air France – Air France SWOT analysis
1.) The business can be repaid to make a profit.
The point-to-point and medium-haul point-to-point trade are still causing losses for airlines. The majority of losses come from Air France’s regional headquarters in France.
In order to compete with LCC, Air France is being portrayed as an excellent value brand. Air France has been looking to break even for its short and medium-distance point-to-point network. The airline has been enhancing its network and cutting down on them, as well as decreasing costs and restructuring its structure of operations.
2.) Joint Partnership together with Chinese Airlines.
The company’s network extends that extends from Europe across the Asia Pacific and its biggest area includes China. However, it is also facing stiff opposition from Gulf Three( Etihad, Qatar Airways, and Emirates). The joint partnership together with Chinese partners such as China Eastern and China Southern will bring significant strategic advantages for the company. Additional partnerships like this could aid Air France KLM in increasing its revenue and traffic to China.
3) Cost reduction
One of the primary reasons for the poor profit for Air France is that its unit costs are expensive when compared to the unit revenues it is generating. The high level of competition in the aviation industry means it is difficult to rely on the growth of unit revenue. Sir France’s Perform 2020 plan aims at the reduction of unit costs and has no expectation of the growth in unit revenue. The airline has to reduce costs, operate KLM’s and Air France’s units independently and combine strategies to protect their Paris hub.
Threats of Air France – SWOT analysis of Air France
1.) LCC competition remains
With the addition of Transavia and the introduction of Transavia, Air France is expanding their presence in its LCC market. marketplace. But the operation is limited to the top destinations of the Mediterranean as well as Europe that are operated by France. The other European LCCs are pan-European operations and are growing in their array of business operations, and are more profitable than Transavia. The increasing LCC competition poses a significant danger to the Air France subsidiary. Air Frace, seems to be in constant dispute with its employees and must reduce costs to be able to compete with the growing power of discount flyers such as EasyJet Plc. And Ryanair Holdings.
2.) The high cost of fuel affects Margins
The airline has had to contend with the rising cost of fuel and rising pay rates. Profits for the company in its second quarter in 2018 dropped by EUR167 million because the company was hit by an increase in prices for oil as well as currency effects, and strikes. The strike which was in force for 12 days cost 260 million during the second quarter. Air France’s revenue affected the overall revenue but higher performance from Transavia and KLM allowed the group to compete with fewer passengers in Air France. A constant rise in fuel costs has been affecting the earnings of Air France.
3.) Competition is high in long-haul routes
The airlines such as Qatar, Etihad, and Emirates are thought of as “Excellence airlines” by customers. To make life more difficult the airlines like Air France and the LCC airlines like WOW air and French Bee are entering the long-haul market in Paris. Air France is not able to protect its market share from the LCC competitors. As the cost of the long haul increases, it will make it even more difficult for Air France to defend its position in the case of its subsidiary Joon which is a medium and long haul and is not aiming to be an LCC.
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Overview Template of Air France SWOT analysis
Air France-KLM is pursuing a strategy of customer-focused profitable growth, based on ongoing cost focus and the synergy between the two airlines. A prerequisite for profitable growth is operating on a level playing field. The complementarity of Air France and KLM in their three businesses (passenger, cargo, and maintenance) is a source of significant synergies
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