Air France estimates that its revamped short- and medium-haul product will result in a €500 million ($753 million) improvement to its balance sheet by 2011-12.

The new shape of its medium-haul services - the carrier defines this as all European non-domestic services operated with narrowbody aircraft - was unveiled last month.

Its features include creating a two-cabin layout instead of the current three classes, while seeking to create a clear distance between its offering and those of other mainstream airlines that are cutting services or charging for previously free facilities in the current economic climate.

The airline says that the planned €500 million improvement in its figures will come via several routes: greater revenue from improved market share; cutting costs by, for example, simplifying its complex catering contracts; and making adjustments to its network.

On the last of these points, it says it aims to rationalise frequencies on its most popular destinations by increasing the size of aircraft operating those sectors. This, it says, will lower costs without affecting the quality of its schedules or its ability to feed its hubs.

Looking beyond the initial €500 million target, the airline says that it wants to begin talks with crew union representatives "to set the conditions to return to profitable growth" on its short- and medium-haul network.

Source: Air Transport Intelligence news