More than half of Air France flights were cancelled yesterday due to a strike by pilots, in a week when industrial action is set to also disrupt operations at German flag-carrier Lufthansa.
Sixty per cent of Air France pilots took part in the planned week-long industrial action over pay and conditions, leading to more than 500 flights being cancelled – 52 per cent of the total – the airline said.
Shares in Air France-KLM, Air France's parent group, were down 3.3 per cent to €8.26 in Paris yesterday.
The French pilots' union is objecting to employees at Transavia, Air France-KLM's low-cost unit, being paid less than those at the group's mainline businesses.
Air France is seeking to expand Transavia France to enable it to compete against budget carriers such as Ryanair and EasyJet which have seized market share on European short-haul routes, but the strategy's success depends on achieving lower costs, a key part of which is pay.
The dispute highlights the difficulties faced by established airlines as they attempt to fight back against budget rivals by setting up their own low-cost units.
Analysts said the strike could cost Air France-KLM as much as €40m a day – although Frédéric Gagey, chairman and chief executive, has estimated daily losses at between €10m and €15m.
Yesterday, Air France was advising passengers due to fly this week to postpone their journeys if possible and was offering refunds where flights were cancelled. The airline said passengers should check whether their flight was operating before leaving for the airport.
Talks with unions were continuing, but disruption will continue today, with only around 40 per cent of Air France flights expected to operate. The airline said it had sent 600,000 texts and emails to customers due to fly today.
Air France-KLM issued a profit warning in July, citing among other things pressure on ticket prices on transatlantic routes because airlines were putting too many aircraft into this market. - (Copyright The Financial Times Ltd 2014)