Conditions began to deteriorate. Thanks to a recovery plan, Air France underwent thorough modernization. The airline aimed to 'make the sky the best place on earth'.
First begun in the United States, deregulation gained ground in Europe. The process was known as 'open skies', and from 1987 to 1997, European skies were opened to competition. Made vulnerable by the Gulf War (1991), the major players suffered. Air France focused on increasing traffic; its fleet was over capacity.
Every airline was affected, including UTA and Air Inter. To save the French air industry, the French government advocated a merger. Air France bought UTA, itself the main shareholder of Air Inter. From the three airlines, the Air France Group was born in 1993.
A recovery plan, the 'Corporate Plan', was backed by employees in 1994. Air France took off once more. The airline cut its costs and renewed its operating strategy. The network was reorganized around the Paris-Charles de Gaulle 2 hub, opened in 1996. At this 'nerve centre'-style hub, arrivals and departures were linked together to offer the largest possible number of connecting flights – and its performance was boosted by the use of yield management tools to optimize aircraft seat occupancy.
Air France reinvented itself and transferred its headquarters to Roissy, at the heart of its operations, in 1995.
MAKING THE SKY THE BEST PLACE ON EARTH
The renewal could also be seen in Air France's commercial approach: the airline aimed to provide a consistent level of quality of service, from making a reservation to leaving the airport. It reorganized its classes and reinvested to move upmarket. Passengers in 'l'Espace 180' were able to enjoy 180° reclining seats – a bed right up in the sky. Sticking to its new advertising byline, Air France worked to 'make the sky the best place on earth' (1999).
The results were in. Back in the black since 1997, the airline opened up its capital two years later, and 72% of employees became shareholders in the company. The 'new Air France' soared into the 21st century with a new strategy – 'profitable growth'.