Analyse stratégique d'Air France-KLM

Résumé du document

We have chosen following framework for the assignment about Air France - KLM : What is our (Air France - KLM) competitive advantage, how to consolidate it and ensure its continued existence? How to grow on this competitive advantage? We are aware of Air France - KLM has several different and important SBU's in their entire organization portfolio, but because of page restrictions the assignment will mainly focus on Air France-KLM's short‐haul business unit.

Despite Air France - KLM's good position on the European market they are still facing serious risks and challenges in the future. A continuously risk is terror attacks, which shocked the whole airline business after 9/11 back in 2001. Passengers where simply afraid to fly and the business only survived because the respective governments helped them out with financial help. One of the key challenges is also to get out of the financial crisis without too much suffering.

As Air France also points out in their outlook for the financial year in 2010, there are a lot of uncertainties about the forecast for 2010, even though some indicators points toward more stabilization. A huge challenge is also the increasingly growing market for low budget flights and whether they in the future are going to compete on long distance flights.

Despite Air France - KLM's good position on the European market they are still facing serious risks and challenges in the future. A continuously risk is terror attacks, which shocked the whole airline business after 9/11 back in 2001. Passengers where simply afraid to fly and the business only survived because the respective governments helped them out with financial help. One of the key challenges is also to get out of the financial crisis without too much suffering.

As Air France also points out in their outlook for the financial year in 2010, there are a lot of uncertainties about the forecast for 2010, even though some indicators points toward more stabilization. A huge challenge is also the increasingly growing market for low budget flights and whether they in the future are going to compete on long distance flights.

Extraits

[...] The competitive rivalry has especially increased during the late 90's. A highly competitive rivalry leads also often to bankruptcies, which has been almost a normal thing in the US airline industry. Another important point is the high fixed costs. No matter whether the flight is full or not it has to fly this reflects e.g. the high fixed costs. Furthermore it has been seen that many companies try to cut unit costs by increasing volumes . The legislation and regulation within the business has historically played a major role. [...]

[...] The size has been a permanent dilemma for Air France. On the one hand the group has already a complicated structure and it's trying to rationalize its resources, but on the other hand it's through external growth that strategic resources are acquired. The group should try to position itself on markets with high‐expected growth, such as South East Asia . As we mention before, Air France is struggling to get profitable on the European market (short‐haul) mainly because of the competition on low‐costs companies. [...]

[...] Care has to be taken when one wants to compare Air France profitability. On the one hand, as a “full service company” Air France is doing better than its competitors, on the other hand compared to low‐costs airlines on short‐haul flights, it appears as largely ineffective. Indeed, from a structural and financial point of view, Air France has a huge, complex and costly organization, although it has made recent efforts to improve its effectiveness by controlling its costs. Air France has to manage its SBU portfolio carefully, most of its activity is on the short‐haul SBU where competence is fierce, because of its costs Air France is losing ground. [...]

[...] The threat of substitutes is average to high. Our categorization must be taken a bit cautiously, because it depends heavily on the travelling distance. The costumers has always the opportunity to choose from alternative transportation forms such as car, long distance busses, trains, ships etc. A good and important example is the Eurostar train connection between Paris and London, which has affected the prices on this destination. Other continents like flights from Europe to USA have a much lower substitution because its takes considerably much more time to travel by ship compared to flight. [...]

[...] Moreover the company is expected to become the leader over this particular market, and therefore it will eventually get control over Italy's main hub (Milan's Malpensa or Rome's Fiumicino). Those moves are part of a strategy aiming at maximizing synergies on the local market and consolidate its leadership. However, has mentioned before, Europe isn't where to seize growth opportunity, but rather where to consolidate one's advantages . The airline industry is heading to an inevitable concentration. Analysts expect the market to be run by a handful of great groups, hence the size has become crucial. [...]