Air France Cuts Back on Iran Flights, Blames Weak Demand
Air France is cutting its Joon subsidiary’s service between Paris and Tehran to the summer season only, blaming a poor economic performance over two years in operation.
“Air France has decided to adapt its program to better match demand,” a spokeswoman told Reuters in an email message, adding that the decision would take effect from October 28.
Air France’s move comes amid international uncertainty over whether or not US President Donald Trump will pull out of a nuclear deal with Iran, although the spokeswoman said the decision was not linked to the political climate with Iran.
Under that 2015 deal, Tehran agreed to curb its nuclear program to satisfy world powers that it would not be used to develop weapons. In exchange, Iran received relief from sanctions, most of which were lifted in January 2016.
“This just shows how the uncertainty on the Iran deal is beginning to have an impact on the business sentiment towards Iran,” said a European diplomat.
Bankers and others involved in business with Iran say they have been reluctant to travel to the country to close deals or negotiate the financing of existing ones because of uncertainty over the status of underlying US sanctions, even before the latest standoff between Trump and Iran.
Air France has been reviewing demand on the route for several months.
In January, it said it was shifting the route from its main network to its recently-launched Joon subsidiary, using smaller planes, as part of a wider restructuring and rebranding of certain routes.
Joon offers some business-class seats although it is not mainly aimed at traditional business travelers, but at younger travelers with money to spend.
The latest schedule links Air France more squarely with summer tourist traffic as Iran seeks to promote its domestic tourist industry despite political tensions.
However, tourist companies say travel has not picked up as Iran initially expected.
Air France added it would handle the rebooking of flights for customers affected by the change.
Air France’s decision follows a similar one in December by Etihad Airways, which had also said it would scrap flights to Iran and Uganda.