Air France strikes continue as crisis prompts survival warning

May 08, 2018
Airlines attack french eco tax
Air France is strongly opposed to the new eco tax.

Continuing strikes and the resignation Air France-KLM chief executive Jean-March Janaiilic have plunged Air France into crisis and prompted a government warning about its survival.

Janaillac resigned after Air France workers voted down a multi-year pay offer aimed at resolving a deadlock that resulted in strike action generating losses of at least 300 million euros ($US357m).

He will stay until a board meeting on May 15 to decide the European airline group’s interim management structure.

About four-fifths of eligible workers voted and 55.44 percent came out against the company proposal.

Staff began another round of industrial action this week and the airline said Tuesday it expected to operate 95 percent of long-haul flights, 75 percent of medium haul flights and 82 percent of short-haul services.

Management had offered a 7 percent wage rise over four years, including a 2 percent wage increase in 2018. Unions have been calling for a 5.1 percent wage increase in the first year.

Janaillic had been attempting to reform the carrier and bring down its costs. He also oversaw the launch of Air France low-cost subsidiary Joon.

READ: Enigmatic Joon an innovation lab for ailing Air France.

His decision prompted French Finance Minister Bruno Le Maire to urge a resumption of talks and warn the French carrier’s survival was in the balance.

“If Air France does not make efforts to become more competitive, allowing this flagship to be at the same level at Lufthansa and other airline companies, Air France will disappear,” Le Maire told BFMTV.

“We’re minority shareholders … those that think that whatever happens the state will come to Air France’s rescue and soak up Air France’s losses are mistaken.’’

Air France-KLM reported a net loss of €269m ($US320m) in the first quarter of 2018,  as the trikes weighed on its performance. This was despite a 5.2 percent increase in passenger numbers and a 1.2 percent rise in revenue.

The past year has been troubled for a number of European carriers. Alitalia’s future is still in doubt after it was put under special administration last year while Germany’s Air Berlin and Britain’s Monarch both went out of business.

The French carrier’s shares fell by as much 14.5 percent on Monday.