AirFrance smarts over being told ‘buy Airbus’

One of the reasons British Airways, even though it’s part of IAG which has taken money from the Spanish Government for Iberia and Vueling, doesn’t want a bailout, is it doesn’t want to be told what to do by the Government.

AirFrance has accepted the money from its own Government and the other half of the business KLM, hast taken money from the Dutch Government.

The French Republic owns 14.5% of the airline group and the Kingdom of the Netherlands Government owns 14%, whereas in the UK there is no government ownership at all of IAG/BA.

AirFrance had already been told it has to dismantle and scrap its entire domestic flight operation – other than those flights that meet strict criteria, basically, flying from the mainland to Corsica. It was also given a target of 50% reduction in Co2 emissions based on a 2005 start line, buy 2030. That’s a tall order with its current fleet.

Now the French Industry Minister has made it clear that the French are supporting AirFrance and that means it needs to support the domestic manufacturer, Airbus.

That went down like a lead balloon at AF-KLM. The reaction was “we make business decisions on what’s best for the company”.

And so they might, but while the pressure was being batted off, the company was quickly more amenable. “We do buy Airbus obviously, and we need to buy to replace the older 777 and A330 fleet. Maybe only ten 787’s is a bit unwise and maybe we’ll move those on to KLM eventually. What we don’t want is to loose any competitive pricing advantage by not including Boeing”.

And you see what they mean, an airline is limited enough in its choices, it must buy what is best for it. But we also have to see that vast amounts of tax payer money are propping them up, and taxpayers are workers at the Airbus factory and the myriad suppliers that keep it going.

Trump’s tariff policies and ‘America first’ tariffs have left the rest of the world thinking two can play at that game. You want your airlines and tariffs to support American business? Well we can just as easily exclude yours for the same reasons. So while Air France might complain about being told what to do, and buy Airbus over Boeing, it can hardly be surprised that its deal came with strings attached.

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