Taking credit in difficult times
Air France, in common with other established carriers in Europe and North America, found its traditional markets threatened by the downturn in the airline industry and the increase in low-cost carriers. To remain competitive, the company paid special attention to four techniques:
Reacting rapidly. All Air France’s main decisions following the crisis of September 11th 2001 were taken on September 18th. They were later adjusted and developed, but the new strategy was formed and implemented quickly.
Acting collectively. The board meets to react quickly, considering how best to respond to events and how to co-ordinate their response.
Constantly looking at all competitors. This keeps the business lean and focused on what matters. In France, there has been an established lower-cost competitor to Air France since 1981: the TGV high-speed train. This has meant that many of the disciplines needed for competing with low-cost operators have been developed over many years.
Using all available resources. Competing has meant employing all the assets and advantages that a big industrial carrier has in order to counter low-cost operators, including its brand, market position and operational strengths. Often a competitor’s strategy is to build market share with temporary low prices and then to raise them. An active and patient approach can help to reduce or remove the threat of competitors.