Economy

Markets

Industries

Insights

Reports

Events

Air France KLM looking to China

By Lu Haoting (China Daily)
Updated: 2009-03-09 07:51

Air France KLM offers its flight attendants a three-day training course on China every month and equips each of its 16,000-member cabin crew with a booklet full of tips on Chinese culture and phrases.

The course and booklet are part of Air France KLM's Focus China program, launched at end of last year, which the company hopes will help it make inroads into the Chinese aviation market.

"We want to become Chinese people's favorite European airline," said Frank Legre, general manager of Air France KLM for Greater China.

The Franco-Dutch carrier is seeing a rising number of Chinese passengers not only on its flights between Europe and China, but also on routes to Africa and South America.

An Air France KLM ground staffer greets Chinese passengers at Charles de Gaulle International Airport in Paris. Company photo

Legre said the French Embassy in Beijing used to be the airline's largest corporate customer in China. Now it's Huawei Technologies, China's leading telecommunications equipment manufacturer.

"Not all of our cabin crew will have a chance to fly to China," said Legre, "but isn't it great for a Chinese passenger to be greeted with Ni Hao in Chinese on our flight to Bogota?"

The carrier plans to cut its operating capacity by 2 percent beginning this summer due to falling demand but said it will not adjust its flights to China.

China's aviation market, the fastest growing in the world, has maintained an annual double-digit growth rate over the past decade. Despite the global economic crisis cutting deep into airlines' earnings, the country's aviation industry is still expected to witness at least 8 percent growth in 2009, according the Civil Aviation Administration of China. .

"We are in China to stay, and to grow," said Marnix Fruitema, Air France KLM senior vice president, Asia Pacific.

Air France KLM's two major European rivals, Lufthansa and British Airways, also have no plans to alter services to China and are currently offering lower fares to attract passengers.

Small European airlines are starting to cut their routes to China, however.

Air Berlin, which started flying to China in May last year, suspended services to Beijing and Shanghai last autumn due to declining traffic. Scandinavian Airlines will suspend its Beijing-Stockholm service on May 1.

"Small carriers are obviously at a disadvantage in the declining air travel market," said Li Lei, an aviation analyst with CITIC China Securities.

Air France KLM is getting more people on flights to China but its profits on such routes are falling since the airline, like many others, is slashing its fares and many of its business class passengers are opting to go economy instead.

But Legre is optimistic. "The increase in load factors shows we are gaining market share. When the economy gets better, we will be in a good position," he said.

The merger between Air France and KLM Royal Dutch Airlines in 2004 created Europe's largest airline by market value. The Franco-Dutch carrier is now the leading European carrier in China in terms of capacity and market share.

Air France was the first Western airline to serve China, starting in 1966.