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Air France targets wealthy travellers with new first-class

suite

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CEO Ben Smith emphasises luxury and French brand appeal

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Airlines debate value of first-class investment amid

pandemic

recovery

By Joanna Plucinska, Tim Hepher

PARIS, March 18 (Reuters) - Air France on

Tuesday unveiled a new first-class suite as it expands efforts

to lure wealthy travellers from business jets and lend a 'French

touch' to the tussle for premium revenue.

The CEO of parent Air France-KLM, Ben Smith, told

Reuters the unspecified investment aimed to place Air France 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.

Air France's latest first-class cabin, laid out in four

pairs of grey, red-accented beds and seats on select planes,

follows a years-long effort to re-invent a once loss-making

product since Smith joined the national carrier in 2018.

The Canadian executive has long been a champion of first

class even as many rivals retrench to business class. But he

said only a handful of airlines had the depth of demand or

ability to tap into assets like France as a destination.

"A lot of people like to experience France. When they get on

the airplane outside France, they want to start their journey

from San Jose, Tokyo or Sao Paulo already in France through the

environment on the airplane," he said.

The launch comes weeks after arch-rival British Airways

launched its own new first-class cabin. Lufthansa also

offers first class. Neither airline responded to requests for

comment.

FRENCH BRAND POWER

Smith declined to say how much the investment in the new

seats would cost, but the airline says its first-class service

is already profitable, in part because the price of the ticket

has risen in recent years.

An average one-way Paris-New York ticket costs around 10,000

euros in May, according to the Air France website.

Tuesday's rollout reflected the airline's efforts to strike

a chord with France's broader reputation for luxury, with

waiters passing Michelin-starred snacks in the presence of

specially invited influencers in a Paris Fashion Week location.

Smith insisted, however, that Air France's "La Premiere"

brand could stand on its own feet as a luxury product.

Partially state-owned Air France has long been synonymous

with first class, with its passenger list so powerful that seats

were once reputed to be bugged by the country's spy agencies.

Now, it must compete with now-common lie-flat seats in

business class or increasingly accessible private jets.

Much of the cost is wrapped up not just in the seats but in

bespoke ground services such as special check-ins or limousines.

There is also the hidden cost of creating a sub-fleet of

airplanes that can only operate on a handful of routes.

"Unless it's rock solid, it can be quite marginal because of

the operational complexity, the capital investment and the risk

of substituting seats that they could be sure of selling in

business class," said aviation consultant John Strickland.