Article from BTNews 3 DECEMBER 2018
Joon facing closure
Concern over the future of the Air France low-cost subsidiary Joon surfaced last week amid reports Air France-KLM’s new CEO Ben Smith was considering closing it down as part of plans to boost group profitability.
According to the Reuters agency, the discussion about scrapping Joon, which has not been decided, may indicate a determination by Smith “to tackle weak Air France profitability head-on rather than mitigate it with lower-cost secondary offerings”.
The new CEO “has made clear he doesn’t understand the positioning or identity of Joon,” one Air France source told the agency. “It’s a question he’s raised internally, several times.” An Air France-KLM spokesman declined to comment.
Smith, hired in August after devastating strikes led to his predecessor’s resignation, has said Air France must narrow the profitability gap with its more efficient KLM stablemate.
The Dutch carrier recorded an 8.8% profit margin last year, more than double Air France’s 3.7% margin.
The debate could raise questions about the International Airlines Group’s subsidiary airline Level, says the US magazine Forbes. Level, operated by Iberia, was set up shortly after Joon and shares many characteristics.
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Michael Preston, Weybridge/Cape Town
No surprise really, a poorly thought out strategy that failed to identify its market and served no purpose in expanding the network or passenger numbers. Very French, just a meaningless name and a lot of hot air about nothing.