Air France is an established European flag carrier which has been severely affected by the
September 2008 global crunch, to the extent that it had to adapt its corporate “successful
profitable growth strategy” accordingly.
The carrier, which has always been punctilious on providing high quality service, is now
redefining its offer containing investments and implementing cost-containment plans,
while continuing to pursue its three main activities: passenger, cargo and maintenance.
On redefining its strategy, Air France-KLM has to consider the interest of the stakeholders
included in its mapping, where trade unions represent a constraint, having their say even
with regard to alliance and partnership decisions. Has been, instead, reduced the influence
of lenders, KLM, in fact, was rather exposed to debts till 2006.
Air France -KLM
Air France-KLM has recently focused its strategy to cost reduction, while still pursuing
growth. The Ansoff’s market matrix has been used to plan its expansion in different
markets through partnerships. Air France which in 2004 merged with the Dutch
flag-carrier KLM, has recently expanded its market penetration, agreeing an operational
partnership with the Italian flag-carrier Alitalia, which had previously merged with Air
One, gaining then access to the Italian market, the fourth-largest in Europe.
The reason of these moves is to drive out competitors in the airline mature market and
increase usage by the existing clients through a common loyalty scheme.
The Ansoff’s matrix has been used by the carrier also to implement product development
strategies according to the lens strategy idea. The “fare combinability” system, for
instance, allows passengers to fly to a destination with an Air France flight and come back
with a KLM one.
Strategy as idea, used to develop innovative in-flight and ground-based products and
services, is supported by focus group and a specific project Innovaction (12), involving
customers (13).
A joint frequent flier programme, e-services, improved cabin service, new corporate
contracts for companies, a new range of flexible, changeable and cheaper fares are some
fruits of these activities (14).
Air France defines its strategy referring to Mintzberg’s flexible approach, quickly adapting
its intended strategy en route, according to the external changes. The carrier, for instance,
has adapted the frequency and capacity of its flights, passenger and cargo, taking into
account economic forecasts and the competitive situation of each destination. This analysis
has produced positive effects in the French domestic market, affected by the High Speed
Train competition. In Paris, for instance, many flights in the central hours of the day have
