Air France is cutting economy ticket prices on transatlantic flights amid weakening demand, according to the airline’s chief executive.
Ben Smith acknowledged a “slight softness” in economy-class fares, contrasting with the “relative stability” seen in premium cabins, in an interview with Bloomberg TV.
While the airline hasn’t yet adjusted its flight capacity, Smith expressed concern about the potential impact of a broader economic downturn.
He noted that the travel industry is often among the first to feel the effects of economic downturns, describing the current situation as “uncharted territory”. The price cuts appear to be a strategic move to maintain full planes despite the softening demand.
Air France confirmed that Smith had made the comments.
Shares of European airline groups have plunged after US President Donald Trump revealed on April 2 his “reciprocal” tariff plan that included an imposition of 20 per cent tariffs on European Union products such as Airbus AIR.PA planes.
The EU is set to launch its first counter-measures against Trump’s tariffs next week.
Air France last month launched a new first-class suite as it expands efforts to lure wealthy travellers.
Mr Smith said the new investment aimed to place the company at the top of the European league in airline luxury, signalling a battle with British Airways and Lufthansa.
“A large percentage of the customers are flying for business reasons … Many of them have the choice of a private jet or flying in first class,” Smith said in an interview.
“What is new for us over the last few years is a marked increase in the number of luxury customers that are flying for leisure purposes.”
The air travel industry is locked in a battle for high fare-paying customers as it recovers from the pandemic but is split over the value of investing in first class, with many carriers focusing on steady improvements in business-class seating.
