Air France to design a new long-haul unit

Air France-KLM Group will establish a new division intended for long distance flights in order to compete against rival operators in the Persian Gulf, simplify short-haul operations and work more closely with staff as new Chief Executive Officer Jean-Marc Janaillac seeks to put his stamp on a company riven by internal strife as its market share ebbs, reports Bloomberg.

The group will establish a French arm parallel to Air France aimed at turning a profit in “ultra-competitive” long-haul markets, Janaillac, who took over July 4, said Thursday, adding that the carrier, named Boost, “will not be low cost.” The unit will get 10 jets by 2020, with new routes comprising a third of flights.

The group will establish a French arm parallel to Air France aimed at turning a profit in “ultra-competitive” long-haul markets, Janaillac, who took over July 4, said Thursday, adding that the carrier, named Boost, “will not be low cost.” The unit will get 10 jets by 2020, with new routes comprising a third of flights.

Oddo Securities analyst Yan Derocles said the nine-point strategic plan, which envisages revenue of 28 billion euros ($31 billion) by 2020 and an annual cost reduction of at least 1.5 percent was a underwhelming. “It’s all stuff that was put in place by the previous management,” he said. “The only new element is Boost, but it’s not clear how that will be profitable. And they haven’t even negotiated the creation of the new airline with unions.”