Air France decides to stop its subsidiary "Joon", one year after its creation -

Neither a classic company, nor quite low-cost, Joon was targeting a young and connected clientele and had to regain Air France's loss-making lines thanks to lower production costs. The new boss of the group, Ben Smith, wants to simplify the brand portfolio of Air France and increase the move upmarket.

A small flight of a little over a year and it is the landing for the company Joon that Air France launched in December 2017. Thursday, January 10, the management of the company announced its decision to integrate into term personnel and the fleet (17 aircraft today) of this subsidiary within Air France. In short, the brand will soon disappear.

The creation of Joon had been a bet of the previous CEO of the Franco-Dutch group, Jean-Marc Janaillac, who resigned in May 2018, after his salary proposals were disavowed by a majority of employees in an internal referendum.

Joon wanted a company neither really classic like his big sister Air France, nor at low cost like the other subsidiary: Transavia. Management presented it as targeting a clientele of millenials ", as we say in the language of marketing, that is to say the 18 - 35 years old who master digital tools and are open to the international.

Joon, the new airline of Air France, takes flight

Reclaiming deficit lines

With his staff in sneakers and casual dress, Joon, which serves 10 medium-haul and 6 other long-haul destinations, was tasked with reconquering loss-making routes from Air France with reduced operating costs.

If the pilots came from the historic company on a voluntary basis and under the same conditions of remuneration, the hostesses and stewards were specially recruited externally with costs approximately 40% lower than the same staff of Air France. Joon's overall production cost is about 15% lower than that of the parent company.

" The results in terms of filling or results were good "Says Philippe Berland, aviation specialist at Sia Partners. The number of passengers has increased by 5% and the average number of aircraft filling has approached 90%.

Complex positioning

Las, Ben Smith, who succeeded Jean-Marc Janaillac after a transient leadership during the summer, is clearly not in favor of continuing the adventure Joon. The former number two of Air Canada is rather favorable to a simplification of the brand portfolio of Air France group which now houses the parent company but also, in addition to Joon, Hop (the domestic lines), Transavia (the subsidiary low costs) ...

" Despite the undeniable positive impact of Joon, especially the remarkable work of the teams who launched and supported the company, the brand was from the beginning hardly understood by customers, by employees, by markets, by investors ", Said a statement from management on January 10. Adding that multiplicity of brands has created complexity and has unfortunately weakened the power of the Air France brand ".

Air France-KLM transported more than 100 million passengers

Air France is far from the only group with multiple company brands. This is also the case of its major European competitors such as Lufthansa (Lufthansa, Swiss, etc.) or IAG (British Airways, Iberia, etc.). " IAG has recently created the Level brand whose positioning is very clear: low cost on the long-haul, explains Philippe Berland. But the positioning of a company in relation to the market and the customers is essential. Benjamin Smith believes that Joon did not fulfill this quality. "

Cap on luxury

Pending the absorption of Joon in Air France, all flights of the company sold or for sale will be provided by Joon until the completion of the project and then taken over by Air France, said the company. According to a union source at AFP, the operation could be done in early April 2019. According to an agreement between staff and management, the 600 hostesses and stewards of Joon will be under contract Air France

In the meantime, Ben Smith has begun to reveal his strategic course for Air France in an email to employees: bet on the high-end with the first class, business class and the "premium economy".

Michel Waintrop