By Peter J. Lyth, Hans-Liudger Dienel
Because the finish of global struggle II, eu airways have printed their very own operational sort. via examining seven ecu flag-carriers, the authors supply a comparative learn of the airline enterprise. This learn additionally seeks to give an explanation for why nationwide flag-carriers have survived in an age of globalization and strategic alliances.
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Additional info for Flying the Flag: European Commercial Air Transport since 1945
Air France became profitable again in 1969, but strikes in 1971 and 1973 led to new deficits. The recession began after 1970, whereas the heavy investment required by the arrival of wide-bodied aircraft assumed further growth. Because of the new equipment necessary to service the Boeing 747, airport fees increased quickly - by 70 per cent between 1967 and 1971. Air France decided to preserve its plough-back rate rather than reward its shareholders: the depreciation span for new aircraft was shortened to nine years in 1973 for the Caravelle, and 10 years for Boeing 707, 727 and 747; usually it was 12 years for short-haul and 14 years for long-haul aircraft in Europe.
Air France's advertising had been intensified with the first jets. Under Galichon and Cot, the commercial function was reinforced in Air France's organization and the department of 'commercial development' became a 'general direction' in 1968. From this point onwards Air France aimed less at selling its product than at defining a product that could be sold. Its methods were revised to take into account each segment of the market businessmen, tourists and cargo, and to react more quickly to demand through a decentralized organization and to measure more precisely its results.
In 1978, North America represented only one fifth of its traffic and one eighth of its revenue, and it was overtaken by South America and the Caribbean. Some unprofitable routes were closed, such as the trans-Pacific in 1977, others were opened or re-opened, like French GuyanaPeru in 1977, or France-Vietnam in 1978. The freight network was also continuously developed and represented in 1980 one fifth of revenue. Contrary to the management contract of 1978 with the state, the airline was not completely autonomous or did not feel free to close any unprofitable route.