Leisure travel will lead airlines out of the pandemic, and the latest sign of that is the outsize performance of Air France-KLM's low-fare, leisure subsidiary, Transavia. The discount carrier's results bested even the group's cargo revenues, which carried it through the earlier part of the pandemic.
Aigle Azur was tiny in comparison to Air France, but it still offered competition in certain areas, with the traffic rights to and from Algeria now of particular interest.
Under newish CEO Ben Smith, Air France-KLM has improved its relationship with its unions. This new agreement will make it much easier for its French unit in particular to compete with low-cost rivals.
Giant legacy companies the size of Air France-KLM have trouble innovating regardless of the industry. We can give it some credit for trying, but it's not clear the strategies outlined this week will markedly change the company's fortunes.
If consumers don't value some of the extras offered in the market, or worse still see them as an impediment to their journey, these brands believe it's best to eliminate them. Sure, doing so saves them money and creates lean processes, but it also differentiates the brand and creates positive associations for those consumers who are fed up with fluff, hype, and inflated travel costs.