I'm here with the group CEO of Air France, KLM, Ben Smith. Good morning. Hi, Guy. Nice to see you. So the news overnight is that you have just announced you're flying back in to Riyadh. You're flying back into The Gulf. Is this the first of many steps, or is this the first step you are taking? And then you're gonna assess the situation, and then you're gonna look at what the rest of The Gulf is gonna be looking like. What is the situation in The Gulf for
an airline like you? Yeah. Well, today, we're very cautious in returning to cities in which we've pulled out of. So we've gone back into Riyadh, closer cooperation with the French state from a security perspective with our cabin staff, with our pilots. We have not reopened Dubai, as of yet. Tel Aviv, Beirut are still closed. Gama'a is still closed for us.
So any what would get you back into those into those routes? What do you need to see in terms of the situation on the ground? What did you see in Riyadh? What do you need to see elsewhere?
Well, I think we need as I just said, we need to have all of our stakeholders aligned to put us in a comfort position to go. And right now, we're not there on the destination that we have
to Does it need a peace deal? Does it need a full cessation of hostilities? Does it need like, what kind of boxes do you need to tick?
Yeah. I mean, peace deal, no peace deal. As long as we're confident that it's not going to have an impact on safety. Right. At the particular airport, it doesn't necessarily need to be a peace deal, but we need to have confidence that we're not going to see any danger around those airports. Okay. So Riyadh, there were never was, and there doesn't seem to be any today. So we know as a precaution, we pulled out when the fighting started, but now we're comfortable to go back in.
Let's talk about the situation when it comes to fuel. I think you updated the market a couple of days ago. You talked about the idea you definitely got enough fuel for the summer. What happens after the summer? Will it kind of you get the summer and then what?
So we've secured fuel through the end of August. We've got our full capacity in place. We have not pulled any of our capacity. It's a little unfortunate that a lot of customers are still not confident that there'll be enough fuel, so we're seeing a late booking environment. A little, people are booking a little closer than we've seen in the past. As far as the fall goes or the winter goes, a bit too early for us to have made the decision on how much capacity we keep in the market.
Okay. Just in terms of that messaging you've had to deliver, at the beginning of the war, there was this fear that there wouldn't be enough jet fuel. And the industry came out very quickly and said, we've got enough fuel. The summer's going to be fine. If you went up significantly from here, say in July or August, you see a big spike in fuel, are you effectively guaranteeing that all the routes that you're committing to now, you are gonna fly?
I'm gonna get there, and I'm gonna get home. Well, first off, if the fuel significantly spikes, we're going to have to raise ticket prices to compensate for that. And when you raise ticket prices, there'll be less demand. So the need for the full capacity that we had planned is probably not going to be the case. So how we balance that out with the availability of fuel, the price of fuel, the willingness for customers to pay, we'll see how that
So you might consolidate some routes. Would that I get is there a plan if you went up further to you would change maybe some of the current routes, the frequencies, kind of where you fly, maybe the overlap between Air France and KLM changes? Is there a plan in place if fuel goes sharply higher from here to kinda consolidate within the group?
Sure. I mean, your companies are old, our global brands, and we got a lot of experience in adapting. Last minute, medium term, long term. COVID was probably the most challenging for us to manage capacity and frequencies. So, yes, depending on how the availability and price of fuel does evolve over the next few months, we'll adapt. If it means removing frequencies, consolidating frequencies, we'll make do. Right. Whatever comes at us.
But that's not a plan you've got ready to go. That's something that you will do effectively kind of on the fly.
Correct. Yeah. You know, we're not I mean, the supply of fuel, price of fuel could be different in different parts of the world. So to guess what's going to happen, it's pretty difficult to do that. But airplanes can move around relatively easy and quickly. Yep. We've managed to do that over the last few weeks where we've taken some capacity other parts of the region in our network and started to use it on routes overflying The Gulf where there was a lack of capacity. So to Southeast Asia as an example where a big part of the European traffic was going via The Gulf. Now we've been able to offer something that to you know, Lisa is important
in housing by country. Talk about that for a minute. How sticky do you think that demand is to go over The Gulf? Do you think people will want to fly through The Gulf after this? Once there is a peace deal, do you think you may retain some of that traffic going out to Asia?
Well, I think it's another example of how dependent Europe is and European customers are on flying over The Gulf to destinations that, I think could support more nonstop service. With an unlevel playing field, you've got companies that are based in The Gulf that have been able to attract a big portion of the European demand via The Gulf. So when full capacity comes back in The Gulf, I would expect some, was it 5%, 10% of customers that in the past would have flown over The Gulf to prefer to fly nonstop. But the Gulf carriers are going to be our expectation is they're gonna wanna get their full capacity in place.
The talk is it's possible. The talk is it's gonna be a massive price war once they come back. Tim Clark's gonna want his capacity back at Emirates.
