Air France-KLM: A Strategy for the European Skies
In January 2019, the chief executive officer (CEO) of the French air transport group Air France-KLM SA (Air France-KLM) was tasked with developing the firm's vision for the upcoming meeting of the board of directors. Faced with several challenges, such as low profitability, falling prices, and increasing competition, Air France-KLM had gone from leading the European market in 2004 to fourth position in 2019. At the same time, the European air transport industry had been affected by the rise of local low-cost airlines and the entry of high-end airlines from emerging economies. In response, Air France-KLM had created several businesses to challenge the new competition, but it had yet to improve performance. In this changing competitive context, what strategy should the CEO propose? Paul Marchand is affiliated with HEC Montreal. Gwyneth Edwards is affiliated with HEC Montreal.