Air France has announced significant reductions in its economy class fares on transatlantic routes, aiming to maintain full cabins amid a noted decrease in international travel demand.
Speaking to Bloomberg, Ben Smith, CEO of Air France-KLM, highlighted a “slight softness” in economy-class bookings, contrasting with the “relative stability” observed in premium cabins. The airline is implementing fare reductions to bolster passenger numbers in the economy section, without altering current flight capacities.
The fare cuts encompass major routes between Europe and North America, including destinations such as New York, Boston, and Montreal. Discounts of up to 20% are being offered, with one-way tickets from Paris to New York starting at approximately €289 (£247). These promotional fares are available for travel from May through October, with bookings open until the end of April.
Smith acknowledged that while the current adjustments are manageable, a more pronounced economic downturn could present additional challenges. He noted that the travel industry is often among the first to be impacted during such periods, describing the current situation as “uncharted territory” for the airline.
Impact of U.S. tariff policies
The airline industry is also navigating recent developments in U.S. trade policy. On 2 April, President Donald Trump announced a plan to impose 20% tariffs on several European Union exports, including Airbus aircraft.
However, on 9 April, the administration declared a 90-day pause on these tariffs for most trading partners, aiming to facilitate trade negotiations. Despite this temporary reprieve, the initial announcement had already caused significant market volatility, with European airline shares experiencing notable declines.
Air France has counter-moves if tariffs gut travel demand
Despite the uncertainty created by trade tensions, Air France-KLM CEO Ben Smith has confirmed the group has several contingency plans in place should worsening tariffs significantly impact travel demand. Among the potential measures are deferring aircraft orders to limit capital expenditure and shifting route focus from the United States to regions such as Latin America.
So far, the airline has not witnessed a substantial decline in demand for U.S.-Europe routes. However, Smith emphasised the group’s readiness to act swiftly if market conditions deteriorate, underscoring the company’s flexible strategy in a volatile global environment.
