Air France is expanding its presence in the Toronto market, adding flights to Paris and intensifying competition in the transatlantic market at a time that takeovers are upending the Canadian airline industry.
Air France will add four flights a week to Canada’s largest city beginning next summer for a total of 14, the airline’s chief executive officer said on Monday, the same day Transat AT Inc. unveiled plans to add three weekly flights to Paris from Montreal next summer, for a total of 17 a week.
Air France is betting there is more demand for all-inclusive, premium-priced air travel, even as growth in the world’s largest economies shows signs of slowing. The move comes a year after its parent company, Air France KLM, hired Air Canada’s No. 2 executive Ben Smith as CEO.
Mr. Smith, formerly Air Canada’s president and chief operating officer, was tasked with reversing losses at the Franco-Dutch airline, slashing costs amid fierce competition from low-cost rivals while mending fractious relations with the company’s unionized work force.
Robert Rennert, an airline industry consultant in Toronto, said Mr. Smith “is uniquely placed to understand the intricacies of the Canadian market.”
“They are a direct competitor to Air Canada’s mainline brand,” he said.
Anne Rigail, CEO of Air France, said Mr. Smith’s move to Air France/KLM had nothing to do with the company’s Canadian expansion, adding, “of course, he knows quite well” the Canadian market.
“It’s a very important market,” Ms. Rigail said in an interview. Air France now counts Canada as its third-biggest international market, after the United States and China.
As part of its turnaround, Air France is updating its fleet of planes, increasing fuel efficiency while improving passenger comfort with less noise and lower cabin air pressures. The centrepiece of Air France’s Canadian expansion is a new Airbus A350, the first of which flew into Toronto on Sunday. Air France plans to fly 28 of the fuel-efficient, two-aisle planes by 2025. It will serve Toronto with a Boeing 777. Air Canada and WestJet’s fleet includes the Boeing 777 or 787, rivals to the A350.
Air France has boosted its seat capacity to Toronto by 20 per cent over the past three years with bigger planes. The new phase sees an additional two daily flights between Toronto and Paris in the peak summer holiday season. Air France is also increasing its flights to Vancouver and Montreal in the summer. It will fly to Vancouver five times a week in the summer of 2020 and to Montreal 24 times a week.
“I would say the strategy … has been consistent for the last [few] years. It started three years ago, before the time of Ben Smith,” said Vincent Etchebehere, vice-president of Air France KLM Canada.
Ms. Rigail said Air France is fulfilling Canadian travellers’ demands for a “French experience" – an in-flight menu and wine list that includes Champagne and meals prepared by a French chef. “We are discussing it a lot with Canadians because we have a Canadian CEO [Mr. Smith],” she said.
The Air France executives declined to comment on the takeovers in the Canadian airline industry, and said their rivals’ expansions to Europe is a sign of healthy demand.
An Air Canada spokesman declined to comment on Air France. “There are approximately 70 international airlines that fly to Canada and we compete successfully with these on a daily basis,” said Peter Fitzpatrick, adding the airline flies to six French cities, and will run as many as 47 non-stop flights to France from Toronto, Vancouver and Montreal next summer.
Air Canada has said it will preserve Transat’s brand and headquarters when its $720-million takeover of the Montreal-based travel and leisure airline company is completed next year. Meanwhile, Canada’s second-biggest air carrier, WestJet, has agreed to be purchased by private equity company Onex Corp. for $3.5-billion.
Both takeovers have received respective shareholder approval, but have yet to be finalized by regulators.
Air France and KLM are jointly owned but are run independently of each other, together carrying 99 million travellers a year to 315 destinations with 540 planes.
Mr. Rennert said Air Transat has been expanding its service to France by serving such smaller cities as Lyon, Bordeaux and Nice from Quebec, Calgary, Vancouver and Toronto.