Air France-KLM keen on Korean innovation
“Korea has a very dynamic and innovative market-it’s easy to test new initiatives,” said Chris van Erp, the commercial director for Air France-KLM Korea, Japan and New Caledonia. The two airlines merged in 2004. Appointed to the position last September, this is his first experience working outside the company’s head office in Europe. For Air France-KLM, Korea is its third biggest market in Asia, following China and Japan.
Like every other international airline today, Air France-KLM faces fierce competition from the rise of low-cost carriers and Middle Eastern airlines that are rapidly taking share in a number of markets. Back at home, the company made it through a difficult 2018, with staff strikes and a CEO position that was only filled four months ago.
In an interview with the Korea JoongAng Daily on Jan. 16, van Erp discussed the company’s plans for 2019 and the Korean market in his office, central Seoul. Below is an edited excerpt.
Q. This is your first time working for the company outside of Europe. What’s different about Korea?
A. What is good to mention about the Korean market is that it’s very dynamic and innovative. It’s easy to test whether new campaigns work, not just because of the team, but also because of the Korean people. The head office knows it’s an office where people are really creative, innovative and want to try to do new things. We have some examples that were piloted here and employed elsewhere.
It’s also a very online-driven market. Even in the past year, we saw Korea going more and more online. Digitalization is also a big global strategy for the company at the moment, so we’re investing more into that. Big data is an important element in the tech age in that you can analyze your customers, build contact points and find out what they want.
Air France’s advertisements often include French elements, like the three-color flag or the Eiffel Tower. From that perspective, you don’t seem to localize much in terms of strategy.
In terms of strategy, we always try to stick to our European DNA - for KLM, it’s Dutch, and for Air France, it’s French. But we always add a local touch. We should stay with our own principles because if we try to be fully Korean, that’s not Air France or KLM. That’s why we try to have the best of both worlds.
For all our flights to and from Korea we have Korean staff on board. Our traditional Korean-style menus offered during in-flight were developed with chefs of restaurants Woonsan and Samcheonggak. We also receive inquiries around the clock through Kakao Talk, which is not used in France or the Netherlands.
How does Air France-KLM deal with fierce competition in the airline market?
We face competition all over the world, but we try to look at our own strengths. From Korea, we operate 10 Air France flights a week to Paris and one KLM flight a day to Amsterdam. From those two hubs we send customers to other parts of Europe where we have a dense network.
The company also puts in heavy investment to improve seats and in-flight products. There are also promotional offers that we use to target certain destinations where we have more competition. We make an analysis here and negotiate with the head office to get attractive prices.
Heavy investment means higher costs, which is often a barrier for price competitiveness: how do you balance between the two?
Airlines have different types of passengers. You have the backpacker that looks for low-cost fares but you also have quite a large amount of people that would prefer an airline just for its service. Europe, for example, has a lot of low-cost local airlines, like Ryan Air and EasyJet. Air France and KLM offer services at competitive fares, not quite as cheap, but you can still attract a big number of people willing to pay more to fly in a legacy carrier where they will have good seats and punctuality.
For corporate clients, it’s a completely different profile. They have dedicated time slots in which they need to fly to attend a meeting overseas or quickly return home afterward. The bargain searcher can fly anytime, but a business traveler has to be at the destination at a designated time. We offer different prices for different segments.
Air France-KLM went through a difficult year in 2018 due to strikes over wage disagreement and months without a CEO. How is the company doing now?
It has indeed been a turbulent year for Air France-KLM. It’s been about 100 days since Mr. Benjamin Smith was appointed CEO of the company and we’ve made a lot of steps. A major one is the signing of the labor agreement with the company’s unions, which, of course, creates more trust in the company between staff and management, and more stability.
For Koreans that want to travel to Paris, the ongoing Yellow Jacket protests may be of concern.
We regret the situation now happening, but as an airline we’re not the ones that should give advice on whether a country is safe or not. As an airline, we hope the situation will be resolved and a peaceful atmosphere will soon return to the country.
On general safety, we always strive to secure safe flights for our passengers - it’s one of our biggest values. To do that, we follow all the latest information about things that are happening in the world.
It’s KLM’s 35th anniversary in Korea this year. What are your plans?
In October, KLM will also celebrate its 100th anniversary. We’ll have a lot of marketing, e-commerce and promotional offers for the occasion. Another plan is to strengthen our digital strategy. In Korea we’re working closely with the head office to improve our KakaoTalk service. For now, it is mainly used for receiving inquiries, but this year we’re considering enabling flight booking directly via Kakao Talk. I’ve also seen that emoticon stickers are really popular here, so we’ve been discussing the development of a dedicated emoticon for Air France-KLM. That would create engagement with our customers.
BY SONG KYOUNG-SON [firstname.lastname@example.org]