Designing a new airline for hipsters (and Air France investors)

What corporate France lacks in cost-cutting potential, it makes up for in style. That at least appears to be the recipe at Joon, the latest aviation brainchild of Air France-KLM Group, which starts operating this week. The pitch goes like this: tech-savvy and fashion-conscious flight attendants serve de rigueur staples from baobab juice to organic quinoa salad as millennials jet from Paris to Barcelona and Brazil at discount rates, streaming videos above the clouds. The reality, of course, is slightly less glamorous: the hipster pitch simply sugars the pill. Scratch beneath the surface and Joon, a riff on “jeune,” French for young, is the result of some hard-headed thinking at Europe’s biggest airline, designed to boost earnings by cutting costs more steeply than fares. At stake is Air France’s ability to defend European routes against further incursions from no-frills specialists led by Ryanair, while combating an emerging discount challenge in lucrative long-haul markets. Joon represents the group’s second recent bid to slash costs after the first was dropped amid protests that saw managers attacked by staff. Analysts say the company must get the new attempt right before oil prices rebound -- or put at risk a resurgence in its business that led operating profit to jump 44% in the first nine months and the share price to double as French visitor numbers recover from a spate of terrorist attacks. “Air France needs to improve its cost performance relative to competitors in order to thrive in an environment that may not be as benign as the one we have today,” said Andrew Lobbenberg, an aviation analyst at HSBC Holdings Plc in London. “That’s what Joon is about.” The new unit, Air France’s fourth brand alongside the mainline carrier, short-haul unit Transavia and regional arm Hop!, will be based at Paris Charles de Gaulle airport and is set to commence flights on Friday.<br/>