Joon enables Air France-KLM to expand its low cost offering

By Bjorn Fehrm

December 13, 2017, ©. Leeham Co: Air France-KLM, or really Air France, has after a long dialogue with its trade unions set up Joon, a new LCC operation in the group. The new airline flew its first flight, Paris Charles de Gaulle (CDG) – Barcelona, on December 1st.

Air France-KLM has already an LCC daughter, Transavia. So why Joon?

The motivation for Joon

When Air France and KLM merged 2004, KLM had the year before acquired 100% of Transavia, its charter and low-cost daughter.

Gradually, Transavia expanded its Dutch hubs to France, with hubs at Orly and Strasbourg. Air France-KLM created in autumn 2014 Transavia Europe, the new group-wide LCC. The idea was to expand Transavia to one of the five leading European LCCs, transporting 20m passengers with 100 aircraft by 2019.

The powerful Air France pilot union, SNPL, immediately went on strike. Transavia Europe would take over Air France routes and by it, Air France pilot’s jobs. Continuous strikes forced the Air France management to the negotiation table.

SNPL could not accept the fast expansion of Transavia. It challenged the plans of the Air France-KLM board and its CEO, Alexander de Juniac, to turn Air France around by lower cost operations with a larger Transavia as a vital part. It came to violent disagreements with the unions of Air France in the Spring of 2016.

De Juniac announced he was leaving in early April 2016. He was the new head of IATA.

The new CEO, Jean-Marc Janaillac, joined July 2016. He gradually realized the Transavia way forward would not work for the Air France part of the group. The SNPL was too powerful.

Gradually, Janaillac got SNPL to understand something needed doing. Many of Air France’s routes could not be served economically. The most unprofitable routes had closed and Air France’s market shares dwindled.

He got the SNPL to accept the creation of a new company, Joon. It would fly Air France aircraft, piloted by Air France flight crews, working under Air France terms and conditions.

The rest of the company, including cabin crew (whose Air France union wasn’t as strong as the SNPL) would be hired at LCC conditions.

Joon was formed 29th October 2017 and started operation 1st December 2017 with an Air France A320 from CDG to Barcelona.

Joon’s network

Joon initially flies from CDG to Barcelona, Berlin, Lisbon and Porto (Portugal). From the 25th of March 2018, Joon adds Rome, Naples, Oslo and Cairo.

Later in the spring, Joon will add long-haul routes to Fortaleza (Brazil), Mahé (Seychelles), Cape town and Teheran. These will be flown with four Air France A340-300.

Joon’s target group is the young generation. Cabin crew will serve in slacks and sneakers. Entertainment on long-haul will be by Wi-Fi and Bring-Your-Own-Device (BYOD).

As Joon will replace or revive Air France routes, there will be business and premium economy offered on the long haul flights.

Joon’s fleet

Joon will operate with Air France A320s and A321s at first. Long haul will be served with Air France A340-300s with Air France A350-900s joining the fleet in 2019.

Initial fleet will be 18 A320 series and four A340s, gradually replaced with 10 A350s. This compares with the Transavia’s present fleet of 54 Boeing 737-800s and eight 737-700s.

18 Comments on “Joon enables Air France-KLM to expand its low cost offering

  1. So, one: where does this leave Transavia going forward?; and two: is this just “whistling past the graveyard”, as AF is never going to be a Ryanair or Easyjet—and is most likely going to cannabilize its own mainline ops with Joon? P.S. What’s up with the goofy name? (Because “Ted”, “Song”, etc. have done so well! LOL)

  2. Other European countries seem capable of starting a low cost airline independently of the flag carrier, but not in France. It can’t just be the powerful pilots’ union, there must be other barriers to enterprise to account for it.
    Can anyone from France enlighten us?

    • Having lived through the past 20 years in France, here are some possible reasons:
      – fast train (TGV) + regular train are a formidable competitor to any low cost venture
      – the legacy national carrier (Air France + Air Inter) provide ample capacity
      – the French like their autoroute (speedway) network

      • Are the French not so enthused about for ‘going abroad’ for mass market holidays as its other northern Europe cousins ?
        It has its own Med coast with sun and sand and as its larger the Atlantic coast isnt so overcrowded.
        Same goes for second homes, they will be in France itself, not Spain, Tuscany or Cyprus
        The younger people will be like others looking for adventure and ‘experiences’ further abroad, but average families not so much.

        • Can an LCC under the wing of a legacy airline actually works?

          Eurowings a possible example (after the departure of Air Berlin), on the same route they can be very cheap at time X, later in the day they are more expensive than LH.

          Similar with Austrian and Brussels Airlines (part of LH Group), on some parts of the day they offer LCC fares and others they crazy expensive.

          I have also seen the same with Iberia and Vueling. With LEVEL, its still honeymoon days?

          • The track record isn’t good. The US3 tried and failed (see: UA’s Ted & Shuttle, CO’s CALite, USAir’s Metrojet, & DL’s Song), BA is about to shutter OpenSkies, Germanwings/Eurowings has bled money ever since its creation, and only limps along because of the parent company’s clout inside Europe’s largest market.

            There are few relative successes: AC’s Rouge, QF’s Jetstar, SG’s Scoot. These have identities all their own and are free to open routes the parent carrier won’t touch with a 10-foot pole.

            I would not characterize IB, VY, SN, LX and OS as airline-within-airlines though. They get a large amount of operational autonomy, and their only relationship with their parents are financial.

            For now, LEVEL operates using IB’s aircraft, crews, and operating certs. I get the feeling it’s a loss leader for IAG, who’s feeling the heat from DY’s transatlantic expansion.

  3. “He got the SNPL to accept the creation of a new company, Joon. It would fly Air France aircraft, piloted by Air France flight crews, working under Air France terms and conditions.
    The rest of the company, including cabin crew (whose Air France union wasn’t as strong as the SNPL) would be hired at LCC conditions.” So basically, SNPL sold-out their brethren and the result is really neither a traditional nor a fully low cost carrier.

  4. The Joon-Transavia arrangement could be interesting, but that they do need to expand their coverage.

    Three routes that I found recently that are examples (Transavia), Munich-Amsterdam, only one flight and that’s after 19H00. No flights between Munich and Paris, also no flights between Amsterdam-Edinburgh. Sure there are many others that you think should be a “no-brainers” for an KLM-AF LCC.

    Must say Easyjet has good coverage out of Paris and Amsterdam.

    Off topic, a “route” that’s a rip-off by rail is Brussels-Amsterdam (45-50 Euro). If LCC could invest in reasonably cost transport from destination airport to city it will be well received. Pax are paying 15-30 Euro’s for checked hold luggage, offer them reasonably cost transport to “city” or to airport and they will fill those aircraft seats.

    • On your “OT”: It would seem to be almost impossibly hard for an LCC to beat 2 hours, 10 minutes city center to city center by train. And, if it were really doable, why isn’t Ryanair already doing it?

      • It just feel weird to pay $50 for a 2+ hour flight and the same for a 90 minute train ride.

        The reality is however that you pay $50 transfer to the airport an another $50 from it which make your trip cost $150 for the flight while a train is centre-centre.

        Airlines have actually the short end of the stick as a large portion of their $50 is taxes. They could make more money by having airport shuttles in their major destinations and have it as part of the flight ticket options.

        (p.s. You don’t have to go the Qatar Merc option but an LCC version of it).

    • Its a 2 hour fast train trip . Why is that a ‘rip off’ price. It has stops in Antwerp ,Rotterdam and Schiphol

      • Its Euro 45-100 depending on time and class, just don’t feel right, here you flying in a $50+M plane, burning fuel, pilots fighting weather and these tin-cans just speed on irrespective.

        Must say it very convenient on the other side.

        • @Anton:
          “…just don’t feel right, here you flying in a $50+M plane.”
          Likely because U hv absolutely no clue how much it costs UPFRONT to build a hi-speed rail network well b4 the 1st train leaves its platform carrying Rev$ pax. $50 million to buy an airplane is absolutely peanuts relative to how much it cost to buy a hi-speed rail system.

          Hi-speed rail pax don’t “feel” that enormous cost usually because all they see is a seat inside a train cabin and completely forget what it is running on top of or thru what type of terrain. The cost is especially astronomical for the short section of line running into a major city center/downtown core. The line has to go either completely underground or require use of the most expensive real estate on the planet – both methods are extremely costly on a per km of rail line basis.

          Even after construction is completed(may be 7~10yrs just for the most basic type of system), Inter-city hi-speed rail investment typically require a pay-back period lasting half a century or longer(or never if income from fare rev$ is not supplemented by lease income from retail or residential property developments along the line) before reaching financial breakeven…..

          In comparison, the entire history of widebody ops in the airline industry is only 47yrs.

  5. Is the demise of Niki becoming an opportunity for Joon/Transavia?

    Then there is also HOP and KLM City Liner, their fares are not that of LCC’s.

    The major LCC’s doesn’t service those smaller markets, their could be place for an LCC in that market, call it “City Hopper”.

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