Air France sets course for new budget long-haul service

Air France-KLM management unveiled details Thursday for a new long-haul budget unit it hopes will allow it to regain market share. Air France said the new unit will begin flying this year on medium-haul routes before long-haul service is added in 2018. The service will operate from its Charles de Gaulle hub in Paris. Air France CE Franck Terner said the airline aims to have 20% lower cost. Air France is one of a number of European network carriers setting up budget long-haul units at a time of falling fares and stiff competition. Lufthansa’s Eurowings unit already flies trans-Atlantic and to Asia. BA parent International Consolidated Airlines Group SA in December announced plans for a Barcelona-based long-haul discount unit. It is due to start service in June. The new units are intended to help network carriers regain traffic lost to rapidly expanding Middle East carriers and compete against airlines such as low-cost carrier Norwegian Air Shuttle, which has branched out into long-haul service. To deliver lower costs, Air France plans to hire about 1,000 cabin crew under new contracts. The new carrier will use Air France pilots. To help generate savings, all pilots, not just those serving the new unit, will be asked to fly 1.5% more hours, an Air France spokesman said. Air France on Thursday presented the plan to pilots belonging to its main unions in the hope of gaining an agreement by Feb. 24. The airline indicated it would be willing to extend the period if unions want to consult their members. The pilot unions have largely been opposed to Air France’s multiyear effort to lower costs through restructuring efforts.<br/>