Issues & Trends – October 2010
JQ link boosts AF-KLM’s Australian market presence
TOM Reeves arrived at Air France-KLM’s Sydney office just a couple of months after the airline concluded a major pact with Jetstar.
And Reeves, the new country manager Australia for the dual-branded European carrier, could not
be happier about the way the partner-ship is developing.
The SPA (special pro-rate agreement) with Jetstar enables the carriers to offer through-fares and seamless transfers to passengers (and their luggage) on their combined networks, with Jetstar providing meal service and appropriate baggage allowance.
The immediately obvious advantage of the relationship is that it enables AF-KLM to market its offline network in two more Australian cities – Darwin and Cairns.
Jetstar’s services out of Darwin connect with AF-KLM over Singapore and Denpasar while its Cairns schedules can provide feed for the European carrier over both Narita and Singapore. But Reeves is also excited by other prospects such as the possibilities presented by Jetstar services into Denpasar from Perth, Brisbane, Sydney and Melbourne.
KLM re-introduced Amsterdam-Denpasar services to its schedules last December and they have proved so successful that frequency has already increased from three to four times a week. Reeves can envisage an interesting future market for travel from Australia to Europe via Bali.
It is just one example of the potential he sees for Jetstar’s burgeoning Asia services to provide significant feed into AF-KLM flights to Europe and beyond. For example, apart from the large number of seats it flies into Singapore, the Australian carrier can also provide AF-KLM with connections from Melbourne and Sydney into Bangkok as well as from Sydney to Ho Chi Minh City and Osaka.
For Reeves the development of airline partnerships is fundamental to the success of an offline office.
And he stresses that, while the prospects for the Jetstar partnership are exciting, the foundations of AF-KLM’s marketing in Australia are the code share agreements between Air France and Qantas over Singapore and Hong Kong and between KLM and Malaysian Airlines over Kuala Lumpur.
He points out that these relationships mean the AF and KLM codes appear on more than 100 flights a week from the major Australian ports – far more effective than operating a few services a week to one or two gateways, at huge expense, which was the case when the airline flew its own “metal” here.
“It (operating offline) enables us to be nimble and to achieve wide penetration as we market our extensive network beyond Asia,” says Reeves. “The Australian market is strate-gically very important to AF-KLM and that means it is important that our relationships work well.”
And not just airline relationships. Relationships with agents are also a key to the airline’s success in Australia, he says, lauding the effectiveness of AF-KLM’s “unified, experienced and knowledgeable” Australian sales force in communicating the breadth of the airline’s dual-branded product offering.
Both AF and KLM have recently widened and improved their inflight products – with AF adding premium economy to its existing three classes while KLM, which operates two classes, is now offering an “Economy Comfort” option (more leg room).
“We have so much to sell, the challenge is to ensure everyone is aware of that,” says Reeves. “The beauty of it is that we have something for everyone and this can only benefit the consumer.”
The latest development is the introduction of “BlueBiz”, a corporate add-on to AF-KLM’s “Flying Blue” frequent flyer rewards scheme.
Aimed at the SME market, BlueBiz complements Flying Blue by enabling companies to earn credits in addition to the Flying Blue points that accrue to individuals on business trips.
Reeves says growth in high-yield corporate travel is leading a global recovery in airline traffic typified by AF-KLM’s 10.7 per cent first quarter revenue increase.
