The word on the grapevine is that Air France-KLM could be considering closing down their newest airline brand, Joon. Set up in 2017, it was designed to be a hybrid between full service and low cost carrier, catering to younger people and families.
Apparently ‘unconvinced’ by the brand, Chief Executive of Air France-KLM, Ben Smith, has apparently been mulling over abandoning Joon as a measure that could help address the relentless underperformance of Air France.
Although Joon is reported to be doing well, with a load factor of 90%, a simplification of the Air France-KLM portfolio would allow a more targeted focus on the growth of the main brands.
However, speaking to Simple Flying, a spokesperson for Air France-KLM denied any closure of Joon was on the cards.
“Air France – KLM denies the information that it has decided to suspend Joon’s operations. No such decision has been taken. Joon flights, all operated on behalf of Air France, are continuing to operate normally and remain available for purchase.”
In truth, even if a closure is in the pipeline, right now it’s nothing more than an idea in the head of the CEO. For any decision to be made, approval of the board would be required which is likely to take time and some convincing too.
Why would Air France – KLM close down Joon?
Almost certainly the primary reason for Smith considering a closure of Joon is down to cost cutting measures on the Air France side of the business. Although both KLM and Air France posted profits in the first half of this year, KLM’s healthy 18% profit really put Air France’s 11% in the shade.
We reported previously that Smith wants to bring Air France and KLM closer together, and to try and bridge the divide between the two companies. As part of this, he already mentioned striving to focus more on the two main brands, instead of subsidiaries such as Joon and Hop!
Just this week, Smith has announced that Air France will be reducing their fleet of A380’s by as much as 50%. The giant aircraft is well known for poor fuel efficiency and difficulty in filling it to capacity, so as part of a cost cutting drive, it’s a logical move from the new CEO.
However, all this is speculation at this stage, as a decision at board level will take time to thrash out. In the meantime, Joon is operating as normal and is even seeing investment from its parent. Just last week they announced the launch of the CosyJoon, a couch style seat for kids to spread out in, similar to the Couchii introduced on ANA’s A380.
They had plans for the future too. Joon had spoken of expansion many times in the past, saying it planned to ramp up capacity from its current 15 aircraft to 28 by 2020, including 10 long haul planes. They plan to launch six new routes in 2019, including short haul to Manchester, Prague, Madrid and Stockholm. As well as this, they have two new long haul destinations; Saint Martin and Quito.
Avoiding more strikes?
There could be another reason for a discussion around closure though, and that’s about labour conditions. Apparently cabin crew for Joon are assigned more hours of work for around 15% less pay than Air France employees.
Two trade unions have already written to Smith expressing concern over employment conditions for Joon cabin crew. With the sound of the recent strikes ringing in his ears, not to mention the ongoing pay negotiations with Air France pilots, Smith may feel it’s better to cut their losses before the proverbial dirt hits the fan.
What would happen if Joon does close?
Should the decision be taken to shut down Joon, it’s unlikely to have a massive impact on either the customers or the staff currently operating the subsidiary.
The most likely outcome would be that the airline simply rebrands back into Air France-KLM, with any booked flights seamlessly transferring to the parent brand. The 15 aircraft operated under the Joon brand would almost certainly be re-absorbed into Air France, seeing as that’s where they came from in the first place.
Staff are likely to be retained too, although Air France-KLM will have to iron out some of the imbalances of working hours and pay between the ex-Joon staff and their own.
As previously stated, no decision has been made, despite what Smith would like to see happening. Any action will require board approval, but as usual Simple Flying will update you as and when any further news is received.