Air France receives low-cost Boost from pilot deal

Air France will proceed with its new low-cost carrier after a lengthy dispute with pilots ended Monday with 78 per cent voting for a new labour agreement. The airline now has deals with both flight and cabin crew and plans to launch its “Boost” project during autumn along a previously announced schedule that will see medium-range flights offered first with long-range flights following in 2018. It is part of Air France’s strategy to cope with pressure from Gulf carriers as well as the expansion in Europe of long-haul, low-cost carriers such as Norwegian Air Shuttle and IAG’s recently-launched LEVEL. Read: Europeans to see new long-haul, low-cost options as competition heats up. The budget carrier will operate 10 long-haul and 18 short-haul aircraft and there are plans to recruit 250 pilots per year over the next three years. The Air France deal with its main SNPL pilots’ union includes productivity gains estimated at 40 million euros ($US46m) annually across the wider Air France group and ends seven months of negotiations. AFP reported the pilots agreed to forfeit a day of rest on medium-range flights and to give up their private toilets on Airbus A330 and A350 planes to create more space for passengers. Air France-KLM chief executive Jean-Marc Janaillac said he welcomed the responsibility shown by the pilots. "This agreement is the result of lengthy negotiations, which have resulted in a balanced compromise in favour of the interests of the company and all its employees,’’ he said in a statement. “This milestone is part of Trust Together's growth and recovery trajectory, driven in particular by the project for the new airline." The new airline will be pitched to the younger “millennial” market and management is hoping it will allow Air France to return to growth and operate profitability in highly competitive markets. It plans to operate an Airbus fleet of A321s, A320s and A350s with the aim of achieving unit cost savings of 15 to 18 per cent on Air France. Janaillac has also said it will be an  “innovation laboratory” for the group. The Air France deal comes after Norwegian’s UK subsidiary was given tentative approval on July 14 by the US Department of Transportation to operate low-cost flights between the US and Europe. The approval comes after the European Commission warned that a failure to grant the application, which was opposed by US carriers and union groups, would result in a formal arbitration under the EU-Europe open skies agreement. Norwegian UK also plans to start services from London Gatwick to Singapore in September and Argentina early next year.