FRANCE: Philippe Capron Withdraws From Air France-KLM Race For Chairman And CEO

Philippe Capron, who had been interested to take over at the head of Air France-KLM, has withdrawn interest in the job and criticised the French state’s intervention in the process.

In the context of recent events, I wish to inform you of my withdrawal from the ongoing recruitment process. I am no longer a candidate for the position of chairman and CEO of Air France-KLM, wrote Mr Capron in a letter to the airline’s interim chairwoman Anne-Marie Couderc.

His withdrawal is the latest setback for the struggling airline— formed by Air France’s merger in 2004 with Dutch KLM — which has been trying to find a new boss to replace Jean-Marc Janaillac, who quit in May after putting his job on the line in an effort to end strikes over pay.

Mr Janaillac’s resignation in the face of union opposition has reignited concerns about Air France-KLM’s ability to reform the French arm of its business.

Its share price has dropped almost 50 per cent so far this year.

On Wednesday, the group said the recruitment process for the future governance would be implemented as quickly as possible. 

Mr Capron, who is currently chief financial officer at French water and waste group Veolia, had been on course to be named as the new boss but, KLM and shareholders Delta and China Eastern Airlines, which each hold 8 per cent of the group, have expressed concern, partly because of his lack of aviation experience.

The position of the French state has also seemingly turned against Mr Capron with finance minister Bruno Le Maire saying last weekend that the race was still open.

Capron is one of the possible candidates but he is not the only one. It takes experience. 

There is also a suggestion that two bosses might now be recruited, one for Air France and one for Air France-KLM.

Mr Capron’s letter which is dated July 2 but was emailed to Ms Couderc on Friday evening defends his ability to do the job, questions the potential governance change and suggests the state had interfered in his candidacy.

After being chosen by the appointment committee I began to introduce myself to other managers when an external intervention blocked this process, marking a curious deviation in the governance of this private company in which the state holds only 14 per cent, said Mr Capron in the letter.

Along with the premature revelation of my candidacy, following little information from the public authorities, this decision opened Pandora's Box, giving an opportunity to all those who believe they have the right to co-manage the company to advance their particular agendas and to interfere in the process, added Mr Capron.

Without naming the hotel group directly, the letter also hits out at France’s Accor, which has been pressing ahead with efforts to buy the government's stake in the airline.

Everyone agrees that seeing the exit of the state from the capital of Air France-KLM is one of the conditions of the recovery of the group.

But this exit should not be for the benefit of private interests, determined to take creeping control, said Mr Capron.


Tourism Observer

NORWAY: Norwegian To Launch Flights To Brazil From London And Argentina

Norwegian Air Shuttle plans to fly to Brazil from Argentina and London to boost its month-old operations in South America, chief executive Bjorn Kjos said in an interview in Buenos Aires.

The Scandinavian company has already received authorization from the Argentine government to operate flights to 13 Brazilian cities.

Norwegian is evaluating flying in other Latin American nations, Kjos said, declining to give more details.

We serve a lot of places in the US and in Europe, but South America is our focus in 2018, said Kjos.

There are other countries with priority in South America that are not that well served.

The airline is entering a busy market, and will need to push its low-cost flights to stand out.

Those flying to Europe already include Latam Airlines Group, TAP-Transportes Aereos Portugueses SGPS and Air France-KLM, the latter two of which are backed by local operators Azul SA and Gol Linha Aereas Inteligentes SA, respectively.

Norwegian is one of several low-cost carriers jumping into Argentina amid president Mauricio Macri’s push to open routes to new players and lower consumer costs in Argentina.

It began flying from Buenos Aires to London in February. In December, Norwegian Air got the go-ahead from Argentinian authorities to operate up to 72 domestic and as many as 80 international routes.


Tourism Observer

Governments Urged To Release $5bn Airline Revenues, Venezuela, Angola, Sudan, Bangladesh And Zimbabwe

Countries from Angola to Venezuela owe nearly $5 billion (Dh18.4bn) in local ticket sales to international airlines including Lufthansa, Air France-KLM and Emirates as the governments struggle with currency controls.

The total amount of funds blocked by 16 countries, mainly Venezuela, Angola, Sudan, Bangladesh and Zimbabwe, has dropped 7 per cent at the end of 2017 compared to a year ago, the International Air Transport Association said.

The industry body renewed calls to the governments to respect international treaties and allow foreign airlines to repatriate these unlocked revenues.

In Venezuela’s case we do not see in the short run any solution frankly, to be realistic, but we will not give up, Alexandre de Juniac, director general of IATA, said in a media briefing at the conclusion of the IATA annual meeting in Sydney.

Airlines have been struggling to get ticket revenues out of oil dependent countries such as Angola, Africa’s second-biggest oil producer, after a 2014 collapse in crude oil prices dried up foreign reserves of dollars, euros and major currencies.

In 2017, Emirates scaled back its five weekly flights to Angola’s capital Luanda to three citing difficulties in repatriating funds.

Venezuela alone owes $3.78bn to international airlines, followed by Angola where about $386 million remain blocked.

Sudan is withholding $170m, followed by Bangladesh with $95m and Zimbabwe with $76m, Iata said.

Venezuela, which has more oil than Saudi Arabia and was once one of the richest economies of Latin America, is now plagued with shortages in basic goods from food to antibiotics.

The sharp drop in oil prices in 2014 has led to an economic downward spiral in the country.

Inflation exceeded 2,400 per cent in 2017 and would worsen in 2018, the International Monetary Fund estimated.

Mr de Juniac said a solution is unlikely soon in Venezuela, given its deepening economic crisis, but remains hopeful for progress in other countries.

We are encouraged by the recent developments in Nigeria and Angola, and hope other states will also move quickly to address blocked funds, he said.

Egypt has already paid in full its obligations to international airlines, while a $600m backlog in Nigeria was cleared and Angola released $120m from the peak of more than $500m it owed, Iata said.


Tourism Observer

Air France Strikes Disastrous For KLM’s Finances, Reputation And Cohesiveness Of Air France-KLM Pact

The impact of the ongoing strikes at Air France is disastrous for the AF-KLM combine, KLM president Pieter Elbers said in a letter to KLM staff.

The 11th strike in a few weeks was staged at Air France on Tuesday.

The strikes are over pay and have cost Air France nearly €300m so far.

Elbers said the Air France strikes were bad for KLM’s finances and reputation as well as for the cohesiveness of Air France-KLM pact which, he said, is the true strength of the combine.

Air France CEO Jean-Marc Janaillac is organising a vote among AF workers to determine whether there is enough support for the company’s wage proposal.

The French aviation unions are campaigning for a ‘no’ vote.

Last Friday, Janaillac said he personally would bear the consequences of the vote if it went against him.

Air France KLM French unit said on Tuesday that a consultation period to reach a deal with workers striking over pay would run from April 26 until May 4.

This is as the airline seeks to end a strike estimated to have cost it some 300 million euros or $366 million.

Air France’s pay offer of a 7 percent wage increase over 4 years has not received majority backing from the unions.

The airline’s chairman Jean-Marc Janaillac has said it would be hard for him to stay if the pay talks failed.

The Air France strikes have coincided with strikes from workers at the SNCF state rail firm protesting against government plans to reform the SNCF, causing widespread travel disruption in France over the last month.



Tourism Observer

FRANCE: Air France Starts Flights From Paris-Charles de Gaulle To Taipei

On Monday 16 April, Air France inaugurated its new Paris -Charles de Gaulle – Taipei (Taiwan) service.

The company now offers its customers 3 weekly flights by Boeing 777, equipped with the new long-haul travel cabins.

This new route between Paris-Charles de Gaulle and Taipei is operated on a code-share basis with SkyTeam alliance member, China Airlines.

AF552: leaves Paris-Charles de Gaulle at 13:35, arrives in Taipei at 8:15 the next day

AF557: leaves Taipei at 10:25, arrives at Paris-Charles de Gaulle at 18:20.

Flights operated on Mondays, Thursdays and Saturdays as from 16 April 2018 on departure from Paris-Charles de Gaulle.

14 weekly flights between Europe and Taipei

In addition, Air France-KLM offers 11 weekly flights on departure from Amsterdam-Schiphol: a daily flight operated by KLM by Boeing 777 and 4 weekly codeshare flights by China Airlines by Airbus A350.

In this way, in 2018, the group offers its customers 14 weekly flights between Europe and Taipei together with its partner China Airlines.

This summer, Air France and KLM customers will benefit from 203 weekly flights to 19 Asian destinations(1): Taipei, Hong Kong, Beijing, Shanghai, Guangzhou, Chengdu, Wuhan, Hangzhou, Xiamen, Tokyo, Osaka, Seoul, Singapore, Bangkok, Ho Chi Minh City, Jakarta, Denpasar-Bali, Kuala Lumpur and Manila.

Air France’s best cabins take off to Taipei

On board the Boeing 777 to Taipei, passengers enjoy all the comforts of the latest Business, Premium Economy and Economy cabins.

In the Business cabin, Air France offers excellence in the sky. The seat adapts to the shape of each individual, from seating position to a real 2-metre long bed.

At the heart of the curved structure, each passenger creates their own space, enveloping and protective, according to their desires.

The seat’s soft foam is designed to offer impeccable quality of sleep.

With a soft duvet and XXL-sized feather down pillow, everything has been designed to ensure peaceful sleep among the clouds.

Each passenger has a wide 16-inch (41 cm) HD touch screen.

In the Premium Economy cabin, customers enjoy more comfortable seats and a multi-position footrest, which enhances the comfort of this cabin even further.

In the Economy cabin, the seat has been entirely redesigned, with additional legroom, new seat cushions, softer headrests and a larger tray table.


Tourism Observer

USA: Delta, Air France, KLM And Virgin Atlantic To Form Alliance

Delta Air Lines and partners Air France-KLM and Virgin Atlantic announced a bold business deal Thursday that the carriers hope will strengthen their position in the lucrative trans-Atlantic market.

Delta will buy a 10% stake in Air France-KLM for €375 million ($438 million), deepening an already entrenched partnership between the companies. Meanwhile, Air France-KLM is buying a 31% stake in Virgin Atlantic for £220 million ($287 million).

The airlines hope the move paves the way for a formidable joint-venture alliance between the four airlines.

Delta already owns a 49% stake in Virgin Atlantic in a deal that closed in 2013, allowing those two carriers to launch a joint-venture of their own.

The partnership lets Delta and Virgin Atlantic to coordinate flights and fares, helping them against rivals in the trans-Atlantic market.

But, until Thursday’s announcement, Air France and KLM were not closely aligned with Virgin Atlantic. Air France and KLM merged in 2003 to become a single company (Air France-KLM), though each continues to operate under its own brand.

In selling part of his stake in the company, Virgin Group tycoon Richard Branson said the move would help the airline he founded in 1984 to better compete with British Airways and other rivals flying across the Atlantic.

Delta has helped us considerably with feed from America, but because we don’t have more slots at Heathrow or Gatwick we’re unable to enjoy feed from Europe or provide extra onward journeys for those customers we are now carrying to London,Branson said in an open letter to Virgin Atlantic employees.

To address this we’ve been in discussions with Delta’s partners in Europe, Air France and KLM, to give us that network and connections.

The intention, Branson says, is to form a four-way strategic joint venture.

Branson continued in the letter, appearing to get nostalgic in explaining a new path for his airline.

As I get a little older, I want to be certain that all the necessary building blocks are in place for Virgin Atlantic to continue to prosper and grow for the next 50 years, the 67-year-old wrote.

The airline industry has consolidated over Virgin Atlantic’s lifetime and it’s now our turn to put ourselves at the heart of an important alliance, to create a stronger customer champion and build an airline which provides great opportunities for our team around the world.

That alliance theme also was played up Virgin Atlantic's potential new partners.

With our partners Delta and Virgin Atlantic, we are pleased to reinforce our trans-Atlantic partnership, offering our customers even more choice between Europe, UK and the United States via twelve hubs on both sides of the Atlantic, Air France CEO Jean-Marc Janaillac added.

Specific passenger-facing details weren't spelled out, but the deals could greatly expand the reach of the carriers via connections and their share resources.

On the connecting front, the airlines could for example sell a single-ticket itinerary where a passenger flies KLM from Amsterdam to London to catch a Virgin Atlantic flight to Las Vegas.

Such a scenario would match the set-up already in place between Delta and Virgin Atlantic and between Delta and Air France-KLM.

Such an alliance could also allow the carriers to pool their slots at coordinate schedules at crowded airports, notably at London Heathrow, where Virgin Atlantic has a big presence.

Delta, Air France and KLM are all key members of the SkyTeam frequent-flier alliance, while Virgin Atlantic is not.

There already had been speculation Virgin Atlantic's closer relationship with Delta might lead it to join SkyTeam.

Now, if Virgin Atlantic does end up in cahoots with Air France and KLM, that chatter is only likely to increase.

Ahead of such speculation, the deals announced on Thursday still must win shareholder and regulatory approval.

If OK'd, Branson's Virgin Group would retain a 20% stake and the chairmanship of Virgin Atlantic, according to that airline.

Virgin Atlantic would retain its independence as a UK airline with a UK operating certificate, and will continue to fly under the Virgin brand, Virgin Atlantic said in a statement, appearing to try to address concerns about whether the carrier would remain in compliance with the United Kingdom's laws on foreign ownership of airlines.

Beyond Virgin Atlantic, the strategic business deals announced by Delta and its partners didn’t end with the trans-Atlantic development. In addition to Delta’s 10% stake in Air France-KLM, Shanghai-based China Eastern – also a partner of Delta – said it also would take a 10% in Air France-KLM.

The strategic, commercial and equity investment of these partnerships will position Air France-KLM as the European pillar of the leading global airline network,Air France-KLM said in a statement announcing the deal.

The deals come as the involved parties faces intense competition both from aggressively expanding low-cost carriers such as Norwegian Air and WOW and from high-end Gulf carrierssuch as Emirates and Qatar Airways.

Combining forces to offer coordinate schedules and fares and to offer more connecting options -- would theoretically strengthen the hand of Delta, Virgin Atlantic and Air France-KLM against those foes.

The moves also underscore a recent trend in the airline industry where airlines buy equity stakes in partner carriers.

Qatar Airways, for example, is now the single largest sharehold in the parent company of British Airways. Each are members of the oneworld frequent-flier alliance and now offer reciprocal flight benefits and codeshare connections on certain routes.

Delta also has taken stakes in several of its key partners. Aside from Virgin Atlantic, Delta recently bought its own stake in China Eastern and has similar deals with Aeromexico and Brazilian carrier GOL.

Still, the strategy has risks. Abu Dhabi-based Etihad has been one of the most aggressive in pursuing so-called equity partnerships, but not all have worked out.

Etihad's sizable investment in Italy's perennially troubled Alitalia failed to stem losses at that airline, which has since filed for bankruptcy protection again.



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MEXICO: Interjet to Fly Cancun To Montreal In July,Air France To Increase Paris - Cancun Flights

The low-cost Mexican carrier announces new flights to Montreal from Cancun and Mexico City, to reach the Canadian travel market.

After a year of announcing that it would arrive in Canada in 2017, Interjet finally offers its clients on its website new routes Mexico City – Montreal and Cancun – Montreal, flights that will begin to operate in the second week of July (July 13).

At the beginning it was announced by Interjet and several news pages that Toronto and Vancouver could be the destinations to reach with these flights, but Montreal turned out to be the first destination to conquer by this low-cost Mexican carrier, with flights from Mexico City and Cancun.

On its website the airline has already announced a one-way travel promotion of $2,819 pesos, taxes included, from Mexico City to Pierre Elliott Trudeau airport in Montreal for an introductory fare, and on a round trip of just under $5,500 pesos.

From Cancun the rate that Interjet handles by introduction is $3,270 pesos in a single trip and $6,671 pesos in round trip.

Interjet comes to compete with Aeromexico and Air Canada, for a growing market. Canada is the second most important market for the country and the third for Cancun; from January to July 2016, 1,130,989 Canadians arrived in the country, of which 55% stayed in a hotel in Cancun, that is, 621,746 Canadians.

Air France increasing Paris-Cancun flights frequency. The flights previously were only available from October to April.

To celebrate its 65th anniversary in Mexico and in response to the strong Mexican demand, Air France-KLM announced that starting this year, the Cancun-Paris route will operate four weekly frequencies throughout the year. Previously the flights were only available from October to April.

Based on the electronic records of the National Institute of Migration (INM), at the points of aerial admission to Mexico, Cancun International Airport reached 93,726, from January to November 2016 (latest available), a figure that would increase with this new measure.

From Paris-Charles de Gaulle airport, frequencies for the winter season were operated through a Boeing 777-300, with 468 seats; while weekly frequencies during the summer season 2017 will be aboard a Boeing 777-200, with seating capacity of 312, said Vincent Etchebehere, CEO of Air France and KLM in Mexico.

Winter frequencies were available from October 14, 2016 to March 25, 2017, on Wednesdays, Fridays, Saturdays and Sundays; While from March 26 to April 30, 2017, for what is considered the summer season, on Tuesdays, Fridays and Sundays; and from May 3 to September 2017, flights will operate on Wednesday, Saturday and Sunday.

With the direct flight throughout 2017 is projected a 40% increase, taking into account a 95% occupancy, which is what AirFrance has registered on their flights to Cancun and Mexico City.

These direct flights to Cancun offer French and European passengers direct access to the Riviera Maya, one of the most popular regions in Mexico.

In the Boeing 777-300, seats are divided into 14 for business class, 32 in economy premiun and 422 in economy. While the Boeing 777-200 aircraft are 26 seats for business class, 24 economy premiun and 260 for economy.

Great Britain, Spain, Germany, France, and Italy were the top five European markets for Cancun and Riviera Maya last year.

USA: Delta Air Lines Is A Leading Global Airline

Delta customers in Greater Boston will have more flights and new destinations this summer as the airline adds new nonstop service to Austin, Texas; Kansas City, Mo.*; Jacksonville, Fla.*; Buffalo, N.Y.*; and Norfolk, Va.*; – a new nonstop destination for Bostonians - as well as a second daily flight to Nashville, Tenn.*, from Boston Logan International Airport beginning Sept. 10.

“Delta is committed to being Boston’s global carrier of choice with service that meets the needs of both business and leisure travelers,” said Bob Cortelyou, Delta’s Senior Vice President – Network Planning.

“Our growing network is built to support the diverse travel demands of our customers with unparalleled overall operational performance, and innovative products and services.”

On Dec. 21, Delta will expand weekend West Palm Beach, Fla., and Fort Myers, Fla., flights to daily, as well as increase weekend Ft. Lauderdale, Fla., flights to twice daily. Delta will also continue to support strong holiday travel demand with nonstop flights to popular Caribbean destinations including Montego Bay, Jamaica; Punta Cana, Dominican Republic; St. Thomas, U.S. Virgin Islands; and Nassau, Bahamas; beginning Dec. 21.

“Delta’s new flights and growing presence at Logan Airport are welcome news to the Commonwealth as we strive to strengthen our economic environment and create more connections across the country and globe,” said Massachusetts Gov. Charlie Baker.

“Not only will these new flights increase options for travelers coming to and from Boston, but the planned increase to more than 100 daily flights out of Logan is a clear indication that connecting to the Commonwealth continues to be in demand."

Delta’s previously announced nonstop service to Dublin, beginning May 25, and transcontinental service to San Francisco, beginning June 8, combined with the other eight routes, complements existing trans-Atlantic service to Amsterdam, London-Heathrow and Paris-Charles de Gaulle.

When paired with additional joint venture partner and SkyTeam flights to Paris-Charles de Gaulle, London-Heathrow, Manchester, Rome and Mexico City, the combined group of Delta, Air France-KLM, Virgin Atlantic, Alitalia and Aeromexico offers customers seamless, one-connection access to 174 destinations in Europe and Latin America.

Delta offers more capacity to Europe from Boston than any other U.S. carrier, and is the only U.S. global carrier to offer full flat-bed seats in Delta One.

In addition, Delta One customers enjoy Westin Heavenly In-Flight Bedding featuring a full-size pillow and quilted comforter, chef-designed cuisine, a wine program curated by Master Sommelier Andrea Robinson, a TUMI amenity kit featuring Kiehl’s Since 1851 skincare products and an Alessi-designed collection of serviceware.

Customers flying in Delta Comfort+ will benefit from up to four additional inches of legroom and 50 percent more recline than Main Cabin seats, as well as priority boarding, and every customer will enjoy Delta Studio, which includes hundreds of complimentary movies, TV shows, songs and games, and the ability to connect with Wi-Fi on every flight.

Delta offers the most first class seats of any airline from Boston, and by this fall will operate more than 100 peak day departures to 32 destinations. The airline’s rapid growth includes 12 new destinations since November 2016.

“Logan International Airport has seen tremendous growth over the past decade and we are pleased that Delta is continuing that streak with this exciting announcement,” said Massport CEO Thomas P. Glynn. “Over 36 million people traveled through Logan last year, many of them on Delta, and with this new milestone, we are looking forward to serving even more.”

Delta is the No. 1 carrier between Boston and New York connecting business travelers with the Delta Shuttle, operated by Delta and its connection partner Shuttle America, with hourly service 16 times daily between Logan Airport and New York City’s LaGuardia Airport as well as offering eight daily flights to JFK.

Delta Sky Club operates two locations in Terminal A providing customers with several healthy and fresh food choices and a number of complimentary drink options including local Samuel Adams craft beer and Starbucks coffee. THE BAR at Delta Sky Club offers wines and premium spirits.

SkyMiles members can use miles for premium drinks with a swipe their boarding pass.

Delta offers Delta Studio, the airline’s industry-leading suite of onboard entertainment, free for all customers on two-class aircraft. Delta operates the world's largest Wi-Fi-equipped fleet, with more than 1,000 connected Delta aircraft, including the airline’s entire fleet of 680 domestic mainline aircraft, Delta Connection two-class regional jets and all of its widebody international fleet.

*Flights operated by Delta Connection carriers Republic Airline or Endeavor Air.

Air France, Three Found Guilty Of Ripping Company Executives’ Shirts

Three former Air France employees on trial for ripping company executives’ shirts during a dispute over layoffs were found guilty on Wednesday in a case that highlighted the country’s fraught labour relations. They were given suspended prison sentences of three to four months over the attack in October 2015 that left one executive naked to the waist and another with his shirt and jacket in tatters.

Appearing in court in northeast Paris, two others who faced the same charges of “organised violence” were acquitted. The company said the sentences “enable us to close this sad episode“, but lawyer Lilia Mhissen, acting on behalf of most of the defendants, said she would encourage them to appeal.

Images of furious activists chasing down the executives at the airline’s headquarters on the edge of Paris made the front pages around the world when the confrontation took place. The protests were led by the hard-left CGT, France’s largest union, over the airline’s plans to cut 2,900 jobs.

Ten other former and current employees from the company were fined 500 euros ($530) Wednesday for damaging the company’s property after they broke down a gate at the headquarters during the demonstration. Pierre Plissonnier, director of long-haul operations at the airline, had told the court of his “humiliation” at seeing pictures of himself with a ripped shirt and jacket scrambling over a fence to escape the mob.

The court also viewed footage in which a worker can be heard threatening human resources boss Xavier Broseta before he was stripped to the waist in front of television cameras. Prime Minister Manuel Valls had called for the defendants, whom he branded “rogues“, to be given stiff sentences.

The attack came to symbolise the often fraught relations between company executives and trade union representatives in France and led to questions about the limits of legitimate protest. Incidents of so-called “boss-napping“, in which executives are held against their will during negotiations over job cuts, have spread in recent years.

In 2014, workers at a Goodyear tyre factory in northern France held two directors captive for close to 300 hours to protest the closure of the plant. The CGT has organised protests against the Air France trial, with one member accusing the company and courts of “criminalising union action.”

Air France-KLM returned to profit last year after seven years of losses, but faces stiff competition from Asian and Gulf airlines as well as new, low-cost long-haul alternatives. Air France, which employs around 55,000 people, still faces tensions with pilots and flight crews who staged strikes in late July.

The airline also faces a downturn in bookings, notably by Japanese, Chinese and American customers, because of the string of jihadist attacks that have hit France over the past two years.

FRANCE:Hotel Bookings Down By 10% Last Months

The number of nights spent in French hotels by foreign tourists fell 10 per cent in July compared to last year as visitors from outside Europe were deterred by recent Islamist militant attacks, the tourism minister was cited as saying on Sunday.

France's tourism industry, an important driver of its economy, has suffered since Islamic State gunmen killed 130 people in an attack in Paris last year. It was dealt further blows in July when a militant killed 85 people by ramming a truck into crowds in the Riviera city Nice. Two weeks later, two men killed a priest in a small town in Normandy.

High-spending visitors from the US, Asia and the Gulf in particular had been discouraged by the attacks, Matthias Fekl said in an interview with Sunday newspaper Le Journal du Dimanche.

Tourists from other European countries, who make up about 80 per cent of visitors, were still coming to France, he said.

The first six months of the year had also seen a 10 per cent decline in the number of stays compared to a year ago, Fekl told the newspaper.

The impact was most felt in Paris and the region around the capital, with tourist stays in other regions showing a 2 per cent increase in the January-June period, he said.

Weak activity in France contributed to a fall in first-half operating profit for French group AccorHotels, and Air France-KLM has said it expects its unit revenues to decline in July and August, partly due to the situation in France.

Tourism professionals also say negative perceptions about France have been fuelled by violent street protests this year as well as robberies targeting Asian visitors.

Economic uncertainty and weakness in sterling following Britain's vote to leave the European Union have also raised concerns about British tourist spending, and Fekl said the initial impact would be measured at the end of the summer

EU Seeking New Order On Airline Subsidies

The European Union is seeking tough powers to limit state subsidies to airlines as part of new commercial aviation agreements it wants to negotiate with several countries including the UAE and Qatar.

The EU’s executive arm, the European Commission, has drafted a “fair competition clause” that would give it the option of revoking traffic rights if a complaint is brought against an airline accused of receiving state subsidies.

The clause would be part of air transport agreement talks the executive arm wants to hold on behalf of EU member states with countries like the United Arab Emirates, Qatar, Kuwait, Turkey and others.

The document outlines what would be perceived as state support including protection from bankruptcy, provision of capital, tax relief and cross-subsidisation.

It also outlines a 30 day consulate period for disputes over allegations of unfair subsides and that if the talks fail the complaining country could suspend or revoke the accused airlines traffic rights and impose duties.

The argument over airline subsidies became increasingly politicised through 2015. Two of Europe’s largest carriers, Air France-KLM and Lufthansa, and major United States airlines accused Gulf counterparts Emirates, Etihad Airways and Qatar Airways of being unfairly subsidised, an allegation they refute.

In response to the Reuters report, Etihad warned against protectionism in Europe, arguing it would be damaging for the aviation sector. “We are confident that the EC and European governments understand that, if heeded, the self-serving calls for protectionism by a few will undermine Europe’s connectivity and competitiveness as well as robust choices for consumers in Europe and elsewhere,” an airline spokesperson told Gulf News by email.

Etihad, which has bought stakes in four European carriers, said it would work with Europe “to pursue the Commission’s strategy to enhance the cost-effectiveness and efficiency of Europe’s aviation infrastructure. We will also continue to promote consumer choice, connectivity, innovation, legal certainty and investment.”

Emirates declined to comment, while Qatar did not respond to a request for comment.

The Commission is seeking a mandate from the 28-member EU bloc to negotiate these agreements on their behalf. Currently, air transport agreement negotiations take place between the governments of the two countries involved.

Etihad, Emirates and Qatar have warned in the past against protectionism in Europe and also the United State that they argue ultimately hurts the flying public.

EU Commission Seeks Airline Pacts In Gulf To Stop Subsidies

The European Union's transport chief sought more leverage to fight alleged unfair subsidies to airlines based in the Persian Gulf in a bid to create a "level playing field" for EU flag carriers.

European Transport Commissioner Violeta Bulc asked EU governments for authority to negotiate aviation agreements with the six countries that belong to the Gulf Cooperation Council. Curbing any market-distorting aid to operators such as Emirates, Etihad Airways and Qatar Airways would be a goal of the negotiations.

Bulc's request is part of a European aviation package that also seeks deals with China, the Association of Southeast Asian Nations, Mexico, Turkey and Armenia; foresees guidelines on the control of EU airlines; and proposes a regulatory framework for the use of drones. The targeted accords with the Persian Gulf states are a priority because countries such as the United Arab Emirates have fast-growing aviation markets and the issue of subsidies in the GCC has become politically sensitive in Europe.

"While the additional connections provided by the Gulf airlines are welcome, there are concerns regarding the conditions under which they operate," the European Commission said in a statement about the package on Monday in Brussels. "The right way forward" is "to bridge the interests of both sides by creating conditions that will allow further market development and growth based on common rules and transparency."

The commission, the 28-nation EU's regulatory arm, is preparing for a bigger battle over state aid to Gulf-based airlines after national governments in Europe joined European carriers such as Air France-KLM Group and Deutsche Lufthansa in raising the issue.

France and Germany voiced concerns about foreign subsidies earlier this year at an EU meeting where transport ministers debated global aviation competition. The chief executive officers of several European airlines, including Air France-KLM and Lufthansa, wrote a letter to Bulc in December 2014 urging her to step up efforts to tackle government support for Gulf rivals.

Total seats on scheduled flights between the EU and the GCC nations have more than tripled over the past decade to 39 million this year, the commission said on Monday. The UAE has more direct traffic with the EU than China, India and Japan combined, according to the commission.

Bulc said she wants EU governments to give her "open and dynamic" mandates to negotiate aviation agreements with the GCC, which also includes Qatar, Saudi Arabia, Oman, Kuwait and Bahrain. The deals being sought are dubbed "comprehensive" because, in addition to provisions on "fair competition," they would cover such areas as market access, investment and technologies for air-traffic management.

At a press conference, Bulc refused to be drawn on the question of subsidies in the Persian Gulf.

"I am very careful about that," she said. "I don't want to generalize in this matter. And that's exactly why we are proposing comprehensive bilateral agreements where fair competition is one of the clauses. We really want to address it in a very comprehensive level."

As part of any accords, she said the EU would be prepared to ease its 49 percent limit on foreign ownership of airlines based in the bloc in return for reciprocal rights abroad for European companies. Etihad Airways has a 49 percent stake in Alitalia and a 29 percent holding in Air Berlin.

An existing EU aviation agreement with the United States has failed to abolish foreign-ownership curbs because of American defense of the country's 25 percent limit on voting equity, while a European pact with Canada foresees the scrapping of control restrictions once the Canadian government takes the necessary steps.

For investors in countries that have no derogation from the EU's limit on foreign ownership of carriers, the aviation package promises "interpretative guidelines" at a later stage on the enforcement of the cap. The limit is enshrined in a 2008 European law requiring that EU states and/or nationals own more than 50 percent of any airline based in the bloc and "effectively control" it.

In their letter to Bulc a year ago, the group of European airline CEOs also pressed her to ensure that foreign investments in EU-based airlines "strictly comply" with the 2008 legislation. In addition to the heads of Air France-KLM and Lufthansa, the letter was signed by the CEOs of three Lufthansa units: Austrian Airlines, Brussels Airlines and Swiss International Air Lines.

The goal of the planned guidelines is to "bring more legal certainty for airlines and investors," Bulc said on Monday.

Most Gulf Carriers Re-routed Flights Over Sinai After Russian Crash

Most Gulf airlines said on Sunday they were re-routing flights to avoid Egypt’s Sinai Peninsula, where a Russian aircraft carrying 224 passengers crashed on Saturday.

Carriers from United Arab Emirates, Qatar, Bahrain and Kuwait said they would re-route flights as a security precaution until there was more clarity. Abu Dhabi’s Etihad Airways said it would continue to fly over Sinai but avoid certain areas on the advice of Egyptian authorities.

Air traffic in the region has been on alert since a militant group linked to Islamic State in Egypt said it had brought down the plane “in response to Russian air strikes that killed hundreds of Muslims on Syrian land”.

A Russian aviation official said the aircraft had broken up in mid-air but it was too early to draw any conclusions. The Russian plane crashed into a mountainous area of central Sinai.

German carrier Lufthansa and Air France-KLM said they had decided to avoid flying over the peninsula while they waited for clarity on what caused the crash.

Qatar Airways, budget carrier Jazeera Airways from Kuwait and Bahrain’s Gulf Air said late on Sunday that they would avoid flying over the peninsula, according to separate statements.

“Out of an abundance of caution, Qatar Airways will re-route flights to avoid the Sinai Peninsula airspace until more information is known regarding the tragic loss,” the Doha-based airline said.

Earlier in the day, Emirates, flydubai and Air Arabia, all from the United Arab Emirates, confirmed taking the same security precautions.

Abu Dhabi’s Etihad Airways said it continues to fly over the Sinai region but is avoiding airspace over some of its areas in accordance with instructions by the Egyptian authorities. This would impact “a handful” of its flights, it said in a statement.

Re-routing usually means longer flying distances, which add to fuel costs.

British budget carrier easyJet said it was taking advice from all relevant authorities and was continuing to “actively review” the situation. It said that it, like other British airlines, did not overfly central and northern Sinai on the advice of Britain’s Department of Transport.

“Based on the information received to date, easyJet plans to continue to operate flights to Egypt to carry holidaymakers as planned to and from Sharm el-Sheikh and Hurghada but will continue to actively review the situation,” it said in a statement.

British Airways said in a statement that it did not discuss flight routes, “however we would never fly a route unless it was safe to do so”.