Air France–KLM CEO reveals how airline filled all its planes and dodged the summer chaos
As millions of people jet off on vacation after two years of pandemic lockdowns and COVID-19 restrictions, the summer of so-called revenge travel has risked turning into a summer of chaos, with hours of queuing in airport check-in lines, thousands of flights canceled, and passenger numbers capped at major hubs like Schiphol in Amsterdam and Heathrow and Gatwick in London.
But one aviation giant claims to have predicted those headaches months ago, in the dead of winter. Air France-KLM CEO Benjamin Smith said Thursday that in the slow travel period, he began planning for a huge summer surge, convinced that people would rush to travel once COVID-19 rules were lifted.
“We took the decision in November. We anticipated that summer would be quite strong,” Smith said over breakfast in Paris with the Anglo-American Press Association of foreign journalists. The company hired 300 pilots and 350 aircraft mechanics, and trained them during the down period—avoiding the severe pilot shortage facing several major airlines.
That decision, he says, has paid off big. “Unlike many other airlines, particularly in the United States and some in Europe, we do not have a pilot shortage issue, we do not have a route staff issue, we do not have a cancellation issue,” he says.
Instead, all Air France and KLM aircraft are in operation, and are running about 85% to 90% full, according to Smith. As summer bookings began pouring in, the group reported first-quarter revenues last month of €4.4 billion, about double the same quarter in 2021. That has also been a huge economic boon to the French government, which upped its stake during the pandemic, and now owns 28.6% of the company.
“What we are seeing today is absolutely incredible,” Smith says. The surging numbers include a new class of travelers, which he calls “luxury leisure,” that is filling up business-class cabins even while business-related travel has yet to recover from COVID-19.
First-class flights between Paris and JFK Airport in New York are booked for at least the next two weeks, he says—reflecting a marked influx of high-end tourists into Paris. “You call a hotel and try to get a reservation, or try to book at the top restaurants, and they are completely full,” Smith says.
Despite that, there are several problems impacting the company, like the rest of the industry. One is high inflation, including a sharp rise in jet-fuel prices. Smith says that with full planes, the company has been able to pass on cost increases to passengers, without big impact on revenues. Even so, he says, “we are not going to see a bonanza year of profits.”
Crowds and low wages
For all Smith’s planning he also faces another unavoidable problem: a severe shortage of security personnel and ground staff in U.S. and European airports; European governments, he says, can take months to issue security clearance for new hires.
Unions for ground staff at Paris’s two international airports, Charles de Gaulle and Orly, have threatened to strike on July 2, days before French schools break for summer recess, unless salaries are increased by €300 a month. They say staff are struggling to cope with huge crowds and packed flight schedules.
“We have young people who come and leave again after a day,” one luggage screener at Charles de Gaulle Airport, who earns €1,800 a month, told Reuters. “They tell us we are earning cashiers’ wages for a job with so much responsibility.”
The labor tensions are hardly new for Smith, a Canadian who previously ran Air Canada until taking over Air France–KLM in 2018. When he arrived in Paris, the company’s unions threatened to strike in protest, saying it was “inconceivable” that a foreigner would oversee France’s national airline.
“We had had 40 years of difficult, challenging labor relations,” Smith says, adding that changing that “is not something you can do overnight.” The company’s 17 unions, many representing different political factions, have largely ended repeated strike actions. “We have three or four minor unions that make a lot of noise but don’t have a lot of impact on our operations,” he says.