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Air France Pilots End Two-Week Strike Air France Pilots End Two-Week Strike
(about 5 hours later)
PARIS — The union representing thousands of striking Air France pilots said on Sunday that it would end a crippling two-week strike “in the interest of passengers and the company,” although it stopped short of accepting management’s plans for expanding a low-cost subsidiary. PARIS — The union representing thousands of striking Air France pilots said on Sunday that it would end a crippling two-week strike “in the interest of passengers and the company,” although it stopped short of accepting management’s plans for expanding a low-cost subsidiary.
The airline said it would gradually restore regular flight services over the coming days, but warned that a return to its normal schedule was unlikely before midweek.The airline said it would gradually restore regular flight services over the coming days, but warned that a return to its normal schedule was unlikely before midweek.
A new round of “fruitless” negotiations overnight ended early Sunday, the French National Union of Airline Pilots said in a statement that accused management of intransigence and “image posturing.” But the union, which represents nearly three-quarters of the 3,800 Air France pilots, said it was ending its walkout in order to “pursue discussions under more serene conditions.” A new round of “fruitless” negotiations overnight ended early Sunday, the National Union of Airline Pilots said in a statement that accused management of intransigence and “posturing.” But the union, which represents nearly three-quarters of the 3,800 Air France pilots, said it was ending its walkout to “pursue discussions under more serene conditions.”
Air France expressed relief at having arrived at the end of a “costly and damaging” strike, which began on Sept. 15 and has cost its struggling French-Dutch parent, Air France-KLM, as much as 20 million euros, or $25.4 million, per day. But the airline said it “deplored” the union’s refusal to endorse management’s revised strategic plan and sign an accord bringing a formal end to the dispute. Air France expressed relief at having arrived at the end of a “costly and damaging” strike, which began Sept. 15 and has cost its struggling French-Dutch parent, Air France-KLM, as much as 20 million euros, or $25.4 million, a day. But the airline said it “deplored” the union’s refusal to endorse management’s revised strategic plan and sign an accord bringing a formal end to the dispute.
Nonetheless, management reiterated its intention to accelerate the expansion of the group’s Transavia budget carrier in France in order to compete head-to-head with larger regional rivals like Ryanair and easyJet.Nonetheless, management reiterated its intention to accelerate the expansion of the group’s Transavia budget carrier in France in order to compete head-to-head with larger regional rivals like Ryanair and easyJet.
“This expansion will take place, as planned, under competitive economic and social conditions,” Air France said in a statement.“This expansion will take place, as planned, under competitive economic and social conditions,” Air France said in a statement.
“The emergence from the conflict only reinforces the company’s determination to advance its business model,” it said. “The strategic interest of the company must remain the goal of all” employees.“The emergence from the conflict only reinforces the company’s determination to advance its business model,” it said. “The strategic interest of the company must remain the goal of all” employees.
Manuel Valls, the French prime minister, welcomed the end of the strike and said that the French government, which owns a 16 percent stake in Air France, would “stand by the company and its employees, who were plunged into uncertainty by this episode.” Prime Minister Manuel Valls welcomed the end of the strike and said that the French government, which owns a 16 percent stake in Air France-KLM, would “stand by the company and its employees, who were plunged into uncertainty by this episode.”
Mr. Valls had stepped up pressure on the pilots in recent days to return to work. On Friday, he rejected an appeal by union leaders for the government to appoint an independent mediator.Mr. Valls had stepped up pressure on the pilots in recent days to return to work. On Friday, he rejected an appeal by union leaders for the government to appoint an independent mediator.
The pilots walked off the job to protest Air France-KLM’s strategy to develop its low-budget subsidiary, Transavia, into a leading European budget carrier that would directly compete against larger regional rivals like Ryanair and easyJet. The pilots said they were concerned that the plan, which involved up to €1 billion in new investment in dozens of new planes and the hiring of hundreds of pilots, would eventually lead to lower wages and longer working hours for the group’s French pilots. Air France pilots fly significantly fewer hours per year than the maximum allowed under European regulations. The pilots walked off the job to protest Air France-KLM’s strategy to develop Transavia into a leading European budget carrier.
In order to calm those fears, Air France-KLM last week offered a major concession by abandoning a key element of its strategy that would have based up to one-third of Transavia’s new planes and employees in lower-wage European countries like Portugal. However, management has refused to agree to the union’s demand for uniform working conditions and pay scales for all pilots across the Air France-KLM group, arguing that Transavia could not compete with established low-cost carriers without significantly lowering its operating costs, including wage costs. The pilots said they were concerned that the plan, which involved up to €1 billion in new investment in dozens of new planes and the hiring of hundreds of pilots, would eventually lead to lower wages and longer working hours for the group’s French pilots. Air France pilots fly significantly fewer hours per year than the maximum allowed under European regulations.
Under the terms of its latest proposal, submitted to unions on Friday, Air France-KLM said it was prepared to hire as many as 1,000 new employees for Transavia, including 250 pilots, over the coming two to three years and was ready to begin expanding Transavia in France as early as next summer. The investment plan includes the addition of around three dozen new Boeing 737 single-aisle jets to Transavia’s French fleet. In order to calm those fears, Air France-KLM last week offered a major concession by abandoning a key element of its strategy that would have based up to one-third of Transavia’s new planes and employees in lower-wage European countries like Portugal.
However, management has refused to agree to the union’s demand for uniform working conditions and pay scales for all pilots across the Air France-KLM group, arguing that Transavia could not compete with established low-cost carriers without significantly lowering its operating costs, including wage costs.
Under the terms of its latest proposal, submitted to unions on Friday, Air France-KLM said it was prepared to hire as many as 1,000 new employees for Transavia, including 250 pilots, over the coming two to three years and was ready to begin expanding Transavia in France as early as next summer.
The investment plan includes the addition of around three dozen new Boeing 737 single-aisle jets to Transavia’s French fleet.
Management said no Air France pilots would be required to fly for Transavia, whose pilots fly longer hours for less pay. But the company said those who volunteered to do so would accumulate flight hours, and therefore seniority, more quickly than at Air France, placing them in line for earlier promotion within the group.Management said no Air France pilots would be required to fly for Transavia, whose pilots fly longer hours for less pay. But the company said those who volunteered to do so would accumulate flight hours, and therefore seniority, more quickly than at Air France, placing them in line for earlier promotion within the group.
Air France said that, for safety and logistical reasons, flights that had already been canceled on Sunday and Monday would remain so. The return to normal service was expected to begin on Tuesday, once the grounded aircraft, pilots and cabin crews were repositioned around the world. Air France said that for safety and logistical reasons, flights that had already been canceled on Sunday and Monday would remain so. The return to normal service was expected to begin on Tuesday, once the grounded aircraft, pilots and cabin crews were repositioned around the world.
With the immediate crisis seemingly averted for now, analysts said that Air France-KLM still faced an uphill battle to transform Transavia, which last year reported an operating loss of €23 million, into a profitable challenger to Europe’s broad field of budget carriers, which already claim around 40 percent of the region’s market for air travel. With the immediate crisis seemingly averted for now, analysts said that Air France-KLM still faced an uphill battle to transform Transavia into a profitable challenger to Europe’s broad field of budget carriers, which already claim around 40 percent of the region’s market for air travel. Last year Transavia reported an operating loss of €23 million, now about $29 million.
“The airline is late to the game in trying to turn around its domestic operations,” said John Strickland, an independent aviation consultant in London. “Unless Air France can improve the productivity and working relationships with its pilots then its chances of success in such a competitive market are low.” “The airline is late to the game in trying to turn around its domestic operations,” said John Strickland, an independent aviation consultant in London. “Unless Air France can improve the productivity and working relationships with its pilots, then its chances of success in such a competitive market are low.”
By agreeing to forego the addition of new Transavia bases outside France and the Netherlands, analysts said, Air France-KLM could struggle to achieve its target of reducing Transavia’s operating costs by 15 percent. By agreeing to forgo the addition of new Transavia bases outside France and the Netherlands, analysts said, Air France-KLM could struggle to achieve its target of reducing the carrier’s operating costs by 15 percent.
“Air France management have lost a fantastic opportunity to strengthen the business,” said Shakeel Adam, the managing partner of Aviado Partners, a consulting firm based near Frankfurt that specializes in airline restructurings and start-ups. “By forcing management into the position, the pilots have hurt the overall group’s ability to be sustainable and diversified.” “Air France management have lost a fantastic opportunity to strengthen the business,” said Shakeel Adam, the managing partner of Aviado Partners, a consulting firm based near Frankfurt that specializes in airline restructurings and start-ups.
“By forcing management into the position,” he said, “the pilots have hurt the overall group’s ability to be sustainable and diversified.”