First Free Story (1 of 3)Join Skift Pro
When Air France’s introduced its new lower-cost brand, Joon, over the summer, it promised the first airline designed for millennials, marketing it as a “fashion brand, a rooftop bar, an entertainment channel, a personal assistant,” along with transportation.
Many bloggers and journalists mocked it. Gizmodo’s headline called it a “ridiculous airline for millennials” and poked fun at everything from the rooftop bar — “The bar does not seem to be on the roof of the airplane, but the plane itself will fly above all roofs” — to the entertainment channel, a standard system favored by airlines that don’t want to install in-seat screens. The Telegraph called Joon, “France’s bizarre new ‘airline for millennials.'”
But in an interview last week in New York, Jean-Marc Janaillac, CEO of Air France-KLM, Air France’s parent, described the startup slightly differently, saying the company created Joon less for travelers younger than 35, and more as an “economic necessity” to protect Air France from “fierce competition” from Gulf carriers and long-haul, low-cost airlines.
Soon after joining Air France-KLM in mid-2016 with a mandate to control costs, Janaillac said he realized Air France would need a fresh brand, similar to others launched by Air Canada, with Rouge, Lufthansa Group, with Eurowings, and International Airlines Group, owner of British Airways, with Level. All are spunkier than their airline parents.
“We thought it was good not to make a kind of Air France Blue or Air France White or whatever, but to have a different positioning,” Janaillac said. “It’s the same kind of product but with different items that are more related to the way people are living today and what they are asking for. It means it will be more digital. We are going to make it a laboratory in terms of marketing, in terms of pricing.”
Positioning Joon, which begins flying short-haul routes in December, will be tricky.
The brand’s artsy Instagram feed, and partnerships with companies like Airbnb may scream “millennial,” but many of its passengers will be typical Air France customers. Initially, Joon will fly from Paris to Barcelona, Berlin, Lisbon and Porto, and next year it will add Fortaleza in Brazil and Mahe in the Seychelles — all destinations that interest passengers of all ages. And since Air France and Joon will codeshare, some customers may only realize they’re on Air France’s lower-cost sibling when they board.
For Joon to succeed, Janaillac said it not only will have to attract passengers in their 20s and 30s, but also travelers like him — he’s 64 — who might now fly Emirates to the Seychelles. He likens Joon to Virgin Atlantic, an upstart brand that began in the mid-1980s as an airline targeted for younger travelers, but one that carried customers of every generation, who appreciated what was then a fresh approach.
“I will feel comfortable,” he said. “We don’t want to to be only attracting millennials. But we think that even for people of my age, we are influenced by new behavior in the world, and even if we don’t have actually the same patterns and desires and needs when we are buying things or traveling, we are still influenced by this same things.”
Emily Miethner, founder and CEO of FindSpark, a company that connects employers with millennials, said it’s smart to cater to younger-than-35 travelers by giving them what they want — perks like Wi-Fi, sophisticated mobile apps, and “snacks that don’t suck.” But she said brands don’t need to be so overt with marketing, citing JetBlue Airways as an airline that obliquely targets millennials without being patronizing.
“I think sometimes being so direct and explicit can be a turn-off, especially since at this point people are tired of being branded millennials,” she said. And since the term millennial covers people born between the early-1980s and mid-1990s, not everyone in the segment responds well to the same messages. “There’s such a big generation gap there, so I don’t think people like being pigeon-holed,” she said.
But she said she agreed older travelers may appreciate a fresher approach, especially if it means perks they also want, like tastier food, better entertainment, or Wi-Fi. Joon plans to begin introduce Wi-Fi on shorter flights next year, and longer on ones in 2019.
“I think it’s good to speak more about the benefits and positioning of the brand and not explicitly say, ‘This is a young-people-only airline,”‘ Miethner said.
The millennial-focus may attract most of the attention, but at its core, this is a cost-cutting move.
The company won fewer concessions from Air France labor unions than it might have liked, but Janaillac said costs will be 15 to 18 percent lower than at Air France. That’s enough to allow it to re-enter markets like Mahe, which Air France dropped years ago because of competition from Gulf carriers, Janaillac said.
“If you lower the cost by this amount, and keep roughly the same unit revenue, what was loss making can be a break even,” he said. “It’s exactly what we are trying to do.”
Joon will use a typical low-cost airline approach. Its aircraft should fly more hours each day than Air France jets, and it expects to rely more on digital advertising and direct ticket sales than legacy airlines. In economy class, Joon will charge for everything except water, coffee, tea and orange juice, though business class customers will receive food and drinks.
Some passengers — particularly ones accustomed to flying Air France from Paris to Berlin — may complain about paying for what has been free, but Janaillac suggested this approach may help Air France attract new passengers.
Recently, Janaillac said Air France has lost customers to discounters even when Air France matches prices. Many passengers perceive low-cost airlines are cheaper, and Joon may give Air France a chance to reach those customers.
Joon should grow by taking over routes from Air France and by opening new markets, with a focus on Southeast Asia.
Still, an efficient airline cannot only fly in one direction. To increase aircraft utilization — an approach that lowers unit costs — an airline must fly east and west, so an airplane that flies from Bangkok to Paris can immediately fly from Paris to the Americas.
That could make the United States a possible target. But Janaillac said it’s too soon to know. “We haven’t decided yet,” he said.
For short-haul flights, Air France-KLM likely will never match rivals EasyJet and Ryanair in scale or scope. Air France-KLM already owns two low-cost airlines — both called Transavia, with one based in the Netherlands and another in France — but neither has the strength or breadth of Europe’s massive discounters, since previous management and labor unions waited too long to respond to the threat. Pilots have not wanted to cede lucrative flying to lesser-paid employees.
But the low-cost, long-haul trend is still evolving, and the strongest airline in the segment, Norwegian Air, has nowhere near the scale or market share of EasyJet or Ryanair. Janaillac said he’s unsure how much low-cost, long-haul carriers will grow, because business travelers willing to fly a discount airline from Paris to Dublin might balk at flying one to Los Angeles. But he said he’s watching carefully.
“I was not in the industry at the time, but the industry was pretty arrogant,” he said. “They thought, ‘We are not in the same world, and we are not doing the same business.’ They totally missed the rise of the low-cost carriers and now they are 50 percent of all travel within Europe. We don’t want to do the same mistakes for low-cost long haul.”
Want to know more about Joon? Here’s a promotional video produced by the airline.