Air France confirms capacity growth cutback

Air France-KLM has confirmed what most in the commercial airline industry have been suspecting for the past several weeks. The Franco-Dutch carrier will cut back on planned capacity increases and as such, the carrier will only offer around 2 percent more seats and flights than it did last year. Although the airline did not reveal what the original capacity increase plan had been, some analysts estimated that it was at least double the current figure. Air France told Dow Jones that it had little choice but to take these steps, due to the record price of oil on the world market.

Even though Air France has now officially announced that it will trim its planned growth to the carrier’s capacity, this is still a much more positive development when compared to dramatically shrinking capacity in the United States, where nearly all legacy carriers are expected to cut back on planes, flights and seats, if they have not done so already. The most significant cutbacks to capacity were initiated by American Airlines, which is expected to slash seats and flights by an astonishing 12 percent. Many major European carriers have also confirmed that capacity cuts will follow and the first among these is expected to be British Airways, even though most industry experts point out that these BA cuts are unlikely to be anywhere near as dramatic as those witnessed in the US.

Air France-KLM seems to be performing quite well thus far, despite the high oil prices and a sluggish economy. In fact, the Franco-Dutch carrier posted a 2.6 percent increase in passenger traffic last month.

www.airfrance.com