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Analysis

Air France absorbs Joon to move upscale

Begun by Ben Smith, this strategic act of Air France is demonstrated by a clearer portfolio and a move upmarket of the offer.

Created in 2017, the low-cost company Joon will have been short-lived. Benjamin Smith believes that this is too damaging to the strength of the Air France brand and it does not correspond to its top-of-the-range strategy.

"The development of our offers must better position Air France on high contribution travel. Our "Premium" customers must therefore be guaranteed the clearest and most consistent travel experience possible.

Our current offer is still too complex: the diversity of our cabin configurations is difficult for our customers and crews to understand, the diversity of our aircraft on the same destination does not offer a constant product from one day to the next. It should be recalled that we are currently the only major company that does not yet offer consistent products or full-flat seats in Business, and we are working hard to provide a better experience to create a brand promise for our customers."

The Canadian boss therefore wants to refine the airline's strategy by taking the opposite approach to his predecessor, who saw Joon as an opportunity to compete with low-cost airlines.

Benjamin Smith wants to focus on "high contribution customers" and capitalize more on Air France's brand image, which he believes is associated with luxury components.

In October 2018, Air France therefore invested 150 million euros in 15 of its Airbus A330s to improve the comfort of its seats in economy and "Premium Economy" class, as well as 90 million euros to integrate wifi terminals throughout its fleet.

Transportation and accommodations: all directions for premiumisation

This upmarket strategy can be found in other airlines such as United Airlines, which will reduce its economy offer on certain transatlantic flights in order to increase the number of premium seats.

Air France and SNCF: reconquering lost market shares

Also in the transport industry, SNCF is preparing for the opening to competition by developing a new premium offer called " InOui ". An initial investment estimated at €1.5 billion has enabled the purchase of around 50 new trains and an additional €1 billion is planned for the renovation of 224 trains.

As for hotel groups, the sector's players are continuing to consolidate their high-end and luxury brands. They have initiated the creation of premium brands derived from their flagship brands such as Best Western with Best Western Plus and ibis with ibis Styles. In addition, the new lifestyle brands Radisson Collection, Kimpton Hotels & Restaurant and Curio Collection by Hilton allow groups to have an even greater presence in this segment.

Consolidation of upscale and luxury brands continues 

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