“Am
I that smart?! Or are you just that stupid”
Louis van Gaal, the current head coach of Manchester
United is a legendary trainer. Where already his achievements as a coach on the
football field should have made him a legend, his long and troubled history
with sports journalists is what really gave him fame/ notoriety.
And definetely the most famous quote in the eyes of the
Dutch is the aforementioned outcry from 1996. It was uttered against two
journalists, who did not want to understand his views and asked him impertinent
questions – to the eyes of “beholder” Louis van Gaal, that is.
I had to think about this particular quote, when I
learned today that two executive managers of Air France
had to litterally run for their lives, after they announced
involuntary mass lay-offs among the Air France personnel:
A
scuffle broke out after demonstrators stormed a room at the group’s
headquarters at Charles de Gaulle airport where Air France management was
outlining 2,900 job cuts, or 5 per cent of total staff.
Xavier
Broseta, head of human resources, had the shirt ripped from his back by an
angry crowd as he made his way out. He was forced to climb a fence to escape,
wearing only a pair of trousers and a tie.
“I
could not believe it, they just started attacking,” said one person close to
the unions, who was at the scene. “He looked really shocked as he was rushed
out by security over a fence,” he said.
According to the same Financial Times article, the job
cuts would apply to:
- 300 pilots
- 900 flight attendants
- 1700 ground staff
This is definitely terrible news for the employees of
Air France to whom this news is applying, but one could hardly call it surprising
news, after the events in recent years.
The mass lay-offs at Air France followed one month
after the news that KLM – the Dutch subsidiary of Air France-KLM – could
possibly be forced to lay off as much as 5000 people through involuntary
lay-offs, after voluntary dismissals proved not to be sufficient anymore to
make the Dutch AF-K subsidiary ‘lean and mean’ again. In other words: the
message that Air France-KLM seems heading for some real bad weather in the near
future could not be uttered more clear than with the current unrest in France
and The Netherlands.
This very bad news about Air France-KLM is a blatant
contradistinction with the
soaring annual profits and the accompanying boasting of Ryanair. The
following snippets came from Reuters:
Ryanair
hiked its annual profit forecast by 25 percent on Wednesday after its summer
performance was boosted by bad weather in northern Europe and the strength of
the British pound.
The
Irish airline, Europe's largest by international passenger numbers, said it now
expects net profit for the 12 months through March 2016 to be between 1.175
billion euros ($1.3 billion) and 1.225 billion, up from an earlier forecast of
940 million to 970 million
And talking about ‘boasting’. In an interview with the
German newspaper Welt am Sontag, Ryanairs chairman Michael O’Leary boasted that
Ryanair is ‘planning to cut the prices in half’.
The following (translated) snippets were printed in Het
Financieele Dagblad:
Chairman
Michael O'Leary wants the consumer to profit from the lower oil prices.
Earlier, the chairman promised the consumer already a “mother of all price wars”.
In the German newspaper he gave a small peek at his hand of cards.
O’Leary wants to increase Ryanair’s market share
to 25% from the current 15%. This has to be achieved in 2025. [...] Ryanair’s attack
plan accomodates a spectacular drop in ticket prices. ‘In the long run, we are
aiming at a price of €0”, according to O’Leary in the interview. ‘We cannot put
a term on that yet. Of course, there will be all kinds of additional expenses
and surcharges for the consumer, outside the ticket price”.
And that’s that: Ryanair aims to make huge future profits
by giving aways its tickets for free... but not really!
Enter the great Louis van Gaal; in this case he could be personified by
Michael O’Leary of Ryanair: “Are we that
smart?! Or is the rest of the aviation industry and in particular Air
France-KLM just that stupid?!” One can almost hear O’Leary think that.
Still, for me there is something extremely fishy about
this blatant contrast between the slow demise of Air France-KLM at one hand and
the unprecedented success stories of “class room bully” Ryanair and also long
distance carriers like Turkish Airlines, Etihad and Emirates on the other hand.
Air France and KLM are decent airliners with a long,
long history of safe flights, very good maintenance, good service on the ground
and in the air and prices that are not particularly high anymore, even though
they have never been among the cheapest airliners in the past.
Both airliners were traditionally among ‘the best of
the breed’ and operated their core business in a quite decent and honest way. It
could very well be that Air France and KLM are simply too decent and honest;
they are perhaps outsmarted by their more seasoned competitors at both the low
end and high end side of the aviation spectrum.
As the Dutch say in one of
their famous expressions, they could be “just
too big for the napkin and too small for the table cloth”
Perhaps the main problem of Air France-KLM is that the
other ‘teams’ in their line of business skim the edges of what is still decent
behaviour among airliners and probably cut a few corners along the way.
Middle-Eastern airliners like Turkish
Airlines, Etihad and Emirates have
a reputation of (illegally) receiving billions in
dollars in subsidies from their respective home countries. These are very rich and/or powerful countries, which see
the aviation industry as a very good means to attract loads of tourists to the ‘pomp
and circumstance’ in their ‘tinseltown’ cities, malls and hotels. Consequently they are willing to spend billions and billions in subsidies on behalf of their airliners and the airports which act as hubs for these airliners.
At the other end of the spectrum, there is obviously Ryanair; a company which has a
reputation for flying
with very low levels of fuel on international flights and which is also mentioned for hiring
inexperienced or unemployed aviators, in order to fly for them at a bargain price, or perhaps
even for free.
The company is also infamous among passengers for
offering its customers an extremely low basic ticket price, but afterwards charging
the customer with all kinds of peculiar surcharges and extra expenses for even the
most basic services. This makes an initially very cheap ticket in the end not
so cheap anymore, but then the customer has already booked and paid the ticket.
And perhaps Ryanair’s biggest profit maker is the
bedazzling number of seats that fits in a Ryanair 737-800; ideal for people who
only look for the lowest ticket prices and don’t mind having virtually no space
for their legs at all. And indeed: for short flights at a bargain price many people – including yours truly –are willing to abolish their need for some comfort and service on flights. Just like they don't mind standing on short trips by bus or train.
On top of that, there is one risk that every passenger
should keep in mind, while flying: especially with the cheap airliners, which
always try to save a few bucks on anything that they do. That is the substantial risk for excessive
(and perhaps even dangerous) cost cuts on maintenance activities. Read here for
instance the
integral interview that I held with the distinguished aircraft engineer Fred
Bruggeman in March of 2015.
This all leads to one simple conclusion: neither Air France-KLM nor its low-cost subsidiary Transavia can beat Ryanair on price with their current modus operandi. That is just impossible! They are simply not lean and mean enough!
All in all it seems that Air France-KLM is fighting a
losing battle, when something does not change very quickly and dramatically in its
way of doing business. And – except for the seemingly non-level playing field in
the aviation industry – perhaps that something has also to do with the
personnel numbers working at this company in distress and the salaries and
remunerations that its personnel receives for doing their jobs.
So, it can very well be that the aggressive outburst of
especially the Air France personnel yesterday is yet another example of 'striking and protesting as French weapon of mass self-destruction', as I
wrote in 2014.
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