Air France is reducing economy ticket prices on transatlantic flights in response to declining demand, according to CEO Ben Smith. In an interview with Bloomberg TV, Smith acknowledged a “slight softness” in economy-class fares, contrasting with the “relative stability” of premium cabin prices.
While the airline has not adjusted its flight capacity, Smith expressed concerns about the potential effects of an economic downturn, noting that the travel industry is often hit first. He described the current situation as “uncharted territory” and suggested the price cuts were a strategic move to keep planes full despite weaker demand.
Shares of European airline groups have dropped following US President Donald Trump’s April 2 announcement of a “reciprocal” tariff plan, which includes a 20% tariff on European Union products like Airbus planes. The EU is expected to introduce its countermeasures next week.
In an effort to attract wealthy travelers, Air France unveiled a new first-class suite last month, aiming to compete with British Airways and Lufthansa. Smith emphasized that many luxury travelers are now flying for leisure, a shift from the past when most high-end travelers flew for business.
As the air travel industry recovers from the pandemic, airlines are competing for high-paying customers, though there is debate over the value of investing in first class versus enhancing business-class offerings.
