Air France-KLM to develop Chinese social media products

Air France-KLM Group, Europe's largest airline, is rolling out an ambitious investment plan of "several hundred million euros" to boost its competitive edge in the industry and is planning to develop Chinese social media products on board to appeal to customers in China, one of its fastest growing markets.

"We are initiating a huge investment project in an austerity period to reposition our products and services at the best possible level in the industry," said Alexandre de Juniac, the airline's chairman and chief executive officer, at a press briefing in Paris.

Without revealing the exact value of the investment plan, Juniac said the investments will be mainly used to refurbish its first and business class cabins on long-haul flights.

The Franco-Dutch carrier is also investing heavily in digital technological innovations, which will allow customers to use their smartphones and tablets on board.

Juniac also said that Air France is planning to deploy products of Chinese social network websites and search engines on board to better cater to the needs of Chinese customers.

"We have a lot of initiatives that are built and designed for the Chinese market, which is a major area of growth for us," he said.

Christian Herzog, Air France's senior vice-president for marketing, said that the airline is in talks with Sina Weibo, a popular Chinese micro-blogging website, for a product that will allow customers to access the website on board.

"We want to be closer to the Chinese market and want to have products adapted to the market, for which we have very high ambitions. And social networks are part of our strategy," Herzog said.

The airline in 2013 will offer a free digital press service, which will allow its customers to download and store daily newspapers and magazines on their smartphones or tablets before their flights. It is also planning to add more Chinese digital press titles to its smartphone application.

"The objective is to deploy the system to give each customer his daily press titles and to provide an Indian customer with the Indian press and a Chinese customer the Chinese press," Juniac said.

Juniac added that the risk of an economic downturn in China is a concern for the airline due to a potential traffic slowdown, but that the major challenge is how to address specifically the Chinese market in the medium and long term.

Intensifying partnerships with local Chinese airlines and boosting its presence in second-tier cities is part of the airline's strategy to ensure growth in the Chinese market, Herzog said.

The Franco-Dutch airline group is currently serving nine destinations in China and it said it will continue to see double-digit growth in the market.