(Reuters) -Air France-KLM is slashing prices to maintain full economy cabins on its transatlantic flights as the airline faces weakening demand for international travel, the European carrier’s top boss told Bloomberg News on Wednesday.
The company is noticing a “slight softness” in economy-class fares, while its premium cabins enjoy “relative stability,” the airline’s CEO, Ben Smith, told Bloomberg TV.
He added that the French airline has not yet altered its flight capacity in response to these trends, though an economic downturn could pose fresh challenges.
Smith said travel is one of the first industries to get hit during economic downturns. “This is uncharted territory for us.”
Air France confirmed that Smith had made the comments.
Shares of European airline groups have plunged after U.S President Donald Trump revealed on April 2 his “reciprocal” tariff plan that included an imposition of 20% tariffs on European Union products such as Airbus planes.
The EU is set to launch its first counter-measures against Trump’s tariffs next week.
(Reporting by Bipasha Dey in Bengaluru and Makini Brice; Editing by Maju Samuel)
