It’s not about the market confusion, though it confused customers. It’s not about fleet consistency, though that was problematic. Rather, it’s about a strategic labor gamble by Air France-KLM CEO Ben Smith. That’s my take on why Air France is dismantling its Joon unit.
The Joon announcement was couched in a press release entitled Signature of a New Agreement With Air France Flight Attendants. Air France’s decision to integrate Joon into Air France was made “in consultation with the unions.” It’s no secret that Joon was not just an experiment to appeal to millennials. It was an avenue of labor savings, since Joon flight attendants were paid less (in some cases significantly less) than Air France mainline FAs.
It is true that Joon “was difficult to understand from the outset for customers, for employees, for markets and for investors.” But even though it received its fair share of derision for videos like this…
…Joon still offered a compelling onboard product. Wi-Fi was available on Joon before Air France. The business class seats on Joon’s A340s are better than the entire Air France A380 fleet. In fact, the same press release notes that Air France will configure the A350 aircraft originally bound for Joon in a “more economical cabin configuration.”
It’s not that Joon was a bad product or a market nightmare. No, Joon was just a pawn in Smith’s relentless quest to think bigger. The status quo is not enough. We don’t need any strikes in 2019. We don’t need stalemate, we need peace.
It’s All About Labor
Listen carefully to what Smith said in his statement:
[W]e were able to resolve many concerns of our cabin crew, while simultaneously working to align their interests with Air France. With this balanced agreement, I hope to see improved trust and fruitful dialogue between Air France and our employees, as I firmly believe that we must have employee buy in and support in order to truly become a global leader.
So now we have a solution. Joon’s 13 A320s and four A340s will go to Air France. Future deliveries will continue, but also to Air France. Air France will hire all 600 Joon FAs, who will enjoy better pay and benefits from the start.
Do not underestimate Smith’s big concession to labor that is at the heart of this move to eliminate Joon. While I questioned the marketing, I never questioned the labor-based motives behind starting Joon. That issue is now off the table and Smith has earned more trust from labor unions. That comes at a cost: these flights will cost more when FAs are paid more (pilots are already paid the same as mainline pilots). Now, time will tell if the move will pay off and this transition can result into a better overall experience for employees, customers, and shareholders.
> Read More: I’m a Millennial. Is Joon Airlines a Sick Joke?