Chief Executive Officer, Air France, Air France (Société Air France S.A.)
Le Futur du Transport Aérien : Anne Rigail - Directrice Générale de Air France
Même pas même pas le renouvellement de la flotte c'est à peu près un milliard d'euros par an pour une compagnie Air France ...
About Anne Rigail
In a March 2022 conference, Anne Rigail discussed Air France's recovery from the COVID-19 pandemic and the impact of geopolitical uncertainty on the airline. She stated that Air France had received 7 billion euros in state-backed loans and was required to meet commitments on competitiveness and the environment, but had not committed to purchasing only Airbus aircraft. Rigail noted that business travel demand had declined, with corporate clients making up about 40% of passengers in March 2022, and acknowledged the uncertainty surrounding future demand. Rigail also addressed the airline's environmental impact, stating that air transport accounts for approximately 2.6% of CO2 emissions, but warned that without action this could rise to over 20% by 2050. She discussed Air France's use of sustainable aviation fuels and the company's position on a European kerosene tax. Additionally, Rigail encouraged women to pursue careers in aviation and technology, noting that the airline was hiring for digital and data roles.
Transcript (21 segments)
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Catherine0:05
Good morning Anne.
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Anne Rigail0:15
So the surprises continue for me. Thank you, thank you Catherine.
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Catherine0:21
Yes, I knew, but I didn't know I would have the honor of being able to dialogue this evening with Anne Rigail. So it's a pleasure and an honor, the CEO of Air France. And so I hope you will have many questions to ask her. Maybe among you there are future airline pilots, you never know, you could maybe send her your CV. But first, how is the summer season shaping up for Air France? Because you have done a great job of turning things around.
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Anne Rigail1:03
Good evening everyone, thank you for having me. It's a pleasure to see the young and the not-so-young that we are. The summer is looking good. COVID made us doubt the return of air travel, but summer 2022 saw strong demand we couldn't fully satisfy. Capacities are tight because many airlines retired old aircraft and pilots left. Air France chose to start recruiting early, which was the right bet. Domestic demand is much lower due to video conferencing and train alternatives for short distances. For example, the Marseille shuttle went from 27 daily frequencies in 1996 to 7 this summer. Long-haul and medium-haul demand is persistent, with less corporate travel but more leisure. Prices have increased about 15% due to limited capacity and inflation.
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Catherine4:48
And do you think these changes are permanent? And for a company like yours, how do you adapt? These are completely structural changes for me.
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Anne Rigail4:59
Clearly, because we all digitized during COVID, which changed business. For Air France, domestic is much less significant; we restructured heavily. Long-haul is our core. Decarbonization is our main strategic question. We see strong travel demand in India, China, Asia, Africa, while Europe questions whether to travel. Our low-cost subsidiary Transavia is growing fast, from 40 to 70 aircraft in two years. The real challenge is how to pass decarbonization costs to customers. We need 1.2 to 2 billion euros per year by 2030, excluding fleet renewal. This includes ETS costs (500 million by 2030) and sustainable aviation fuel (SAF), which costs 5 times more than kerosene in France. Global SAF production is only 0.01% of fuel consumption. We need at least 10% SAF by 2030, but European mandates are only 6%. We risk having to import SAF from the US, where it's cheaper due to subsidies.
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Catherine12:35
In the US, airlines are investing in refineries or companies that produce or research second- or third-generation sustainable fuels. At what level is Air France involved in supporting this sector?
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Anne Rigail12:55
We think we need to invest, but not alone. Our margins are not the highest. We need consortiums with manufacturers and airline alliances. We have made small investments to be at the table with technological players. The political challenge is to convince policymakers that aviation is essential and that allocating some decarbonized energy to aviation is not heresy. We work closely with Airbus, Safran, Thales to show that a country without a major airline loses influence. If you rely only on foreign carriers to go to Singapore or Beijing, you have less control.
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Catherine15:03
You are the CEO of Air France, but the Air France-KLM group faces the problem of Schiphol in Amsterdam, where the Dutch government decided to cap flights. Is that a blow for KLM, and could this threat develop elsewhere?
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Anne Rigail15:33
It seems like science fiction, but it came from a political crisis in the Netherlands linked to agriculture and nitrates. Aviation was an easy target. They decided to limit movements from 500,000 to 440,000. We explained that Schiphol is a hub with 60-70% connecting traffic; those connections would just go elsewhere, which makes no sense for decarbonization. It was a political decision, and it has been challenged in court on procedural grounds. The government may try again. The key point is that depriving an airline of resources is the best way to prevent it from decarbonizing. We also face ideas to tax aviation to fund rail. We work with SNCF on train-air intermodality, but we are already heavily taxed. With the end of free ETS quotas, costs are rising. If we are taxed more, how will we afford the aircraft and SAF needed for decarbonization? We are in a friction zone over access to decarbonized energy.
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Catherine18:31
Thank you. Do you have any questions? Yes, I think we also have some on the chat. We'll start with the room. Sacha, where are you?
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Sacha18:47
Thank you. I have two unrelated questions. First, on your route network: how do you effectively readjust your offering after a crisis like COVID, when traffic flows have been heavily disrupted?
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Anne Rigail19:20
We adjust the program every week. During COVID, it was actually fun to challenge our processes and become agile. We watched bookings weekly and saw safe havens like Greece, the Caribbean, and the Indian Ocean. In 2022, we saw an explosion of American travel to Paris. Now we are well above 2019 capacity on France-US routes. We are in a test-and-learn mode: open routes, keep them if they work, remove if not. For example, we opened Banjul during COVID, then removed it; we opened Tanzania and Zanzibar, which are doing well. We also saw geopolitical effects: because US carriers can't overfly Russia, we saw increased demand on India from the US, and baggage issues due to changed flows.
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Catherine22:13
You had a second question.
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Sacha22:14
My second question: how do you restore social dialogue at a company like Air France after numerous governance changes and past strategic choices?
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Anne Rigail22:32
It's daily work and takes a lot of energy. We managed to get through an absolute crisis without a single layoff, through massive voluntary departures and heavy restructuring—closing lines like Orly-Bordeaux, Orly-Lyon, Orly-Nantes, reducing HOP! by 40%, closing the Morlaix maintenance site. We provided support and the French government's partial activity scheme was decisive. We try to maintain the trust that Ben Smith established. Now we are back to more normal activity, but with inflation and over 4 billion euros still to repay, we must be careful with costs. It's a fragile balance, but it holds because we dialogue transparently on strategy and issues.
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Catherine24:18
Thank you Clara. Absolutely. I have a question from Twitch regarding your strategy: what strategy do you plan to adopt for regional transport? Do you think you will use aircraft like the Aura Aero or develop intermodality further?
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Anne Rigail24:33
I would like to. France was probably rather late compared to Great Britain or Germany. We had to restructure regional transport because the cost per seat on ATRs and Embraers cannot compete with low cost. I think the technological revolution will come through that. As soon as there is a 50-seat decarbonized aircraft, I think it will be a hit. The question is what year we will have that aircraft. It will also be a pride, just as aviation became a solution for the environment compared to coal locomotives.
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Catherine25:42
You had another question, and it will also be a pride, in the same way that aviation has become a solution for the environment compared to coal locomotives. We will be very proud to say that we become a solution. So effectively I have a second question for you Madame Rigail on the Twitch chat: will you keep your 787s or continue to increase the number of A350s, which would lead to the end of the 787 division?
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Anne Rigail26:12
The answer is I don't know. If I knew, it wouldn't be smart to say it because we need to maintain suspense for competitive pricing. Both are excellent aircraft. The problem is that a fleet of 10 aircraft is not efficient. Our 787s are very efficient and flew a lot during COVID. Honestly, both are very good. We will need to continue renewing our fleet and will probably go to tender again. KLM also has needs. We try to do joint tenders to get volume and leverage. It will depend on what is offered.
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Catherine27:19
Any more questions? Well, we'll continue the discussion. Thank you Anne Rigail.