Air France has indicated that Indigo could find a place in SkyTeam, a global alliance of airlines including Air France. This could boost the connectivity options for Indigo.
Meanwhile, the Charles de Gaulle Airport in Paris plans to make the airport more and more attractive for Indian passengers to use it as a transit point for travel within Europe or to the US. Excerpts from a joint interview with Mr Alexandre de Juniac, Chairman and CEO, Air France, and Mr Pierre Graff, Chairman and CEO of Paris Airport.
What does the ‘Hub 2012' plan for Charles De Gaulle Airport, Paris, mean for Indian passengers?
One of the key elements is conviction and that is attached with the quality of service to which Air France is associated. The second key element is efficiency and comfort which is provided by the hub. Especially for those who want to go to Europe, Paris is best located as the geographic centre.
What do you have for the Indian carriers?
Mr Pierre Graff, Chairman and CEO of Paris Airport: We are very interested in the fast growing country and we are doing our best to attract passengers from it. My hope is that Air France is capable of attracting maximum passengers. In 2011, the traffic from India increased by 18.4 per cent. From China it was 9 per cent, so growth from India was very impressive. Our policy is to develop best to attract fast growing traffic. In Europe, the market is more mature but growing quiet slow. So it is very important to us to capture emerging economies such as India and China.
ADJ: In Air France, we have specific means to address Indian customers. We have Indian staff speaking various Indian languages on board and on ground. So it is easy to welcome Indians in France, especially for those who are not comfortable with French.
What is the percentage of revenue you get from India?
ADJ: Air France KLM gets 3-4 per cent of revenue from India. It has been stable. China has increased much faster and its share is 5-6 per cent. We expect China's share to double by 2018 and India should do the same. Now the key thing is competition in India, they capture more traffic from India to Europe than China to Europe.
Air France and KLM are part of the SkyTeam but SkyTeam does not have a presence in India. Are you looking to take steps in this direction?
ADJ: We are looking for a partner. We cannot name the partner. It is difficult to give a timeline for getting a partner on board, considering the current financial situation of the Indian aviation industry.
Indigo is a low-cost carrier, but it could be partner of SkyTeam. If we consider Indigo network would feed big Indian cities, then we would consider that. However, let me clarify that no formal discussion is taking place at this moment.
We have three partners in China. It would be a pity if we do not get a partner from India.
Any plan to change the frequency to India or bring the A380 to India?
ADJ: Difficult to say. The Indian market is a difficult market for us. It is very price sensitive. Business traffic is not very big. We are not the only company facing such a situation. The Indian market for European carriers is difficult. Putting A380 for India is not in the short-term plan. It could be in the coming 3-4 years, but not now.
What could be the impact of carbon tax, being imposed by the European Union?
PG: First, there should not be the impression that non-European carriers will reduce operation in and out of Europe, as there is a market. I do not see major departure from the current trends by the Indian, Chinese or US carriers.
What I see perhaps is retaliatory actions on European carriers. These carriers could be levied additional tax, additional fees, and more overflying charges. You can slow down the distribution of traffic rights. We will try to avoid the situation through our own means. We need to take a decision within the multilateral frame work and not in unilateral framework.
ADJ: Price of carbon ETS is $8 a tonne. For Air France-KLM, at this price the cost for buying equivalent number of ETS to pay equivalent number of credit would be €40-60 million. We have fuel surcharge which is a major challenge for all the airlines and now if we increase carbon ETS, it would be another burden on passengers. Impact on fare would be 70 cents to 1 dollar if the price remains below $10/tonne.