Air France Says Pilot Strike, Drop in Demand Cost €500 Million

By Paul Riegler on 11 October 2014
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DSC_0759Air France-KLM, Europe’s third largest airline, said that the cost of the two-week-long pilots strike last month at its Air France unit could have cost it as much as €500 million ($6.3 million) and will have a negative impact on profits for the year.

The strike, which began September 15, caused the airline to cancel over 8,500 flights and impacted roughly one million passengers.  On the first day of the strike, 52% of the airline’s flights were cancelled as a result of the job action.

The airline originally anticipated that the cost of lost ticket revenue plus the additional cost of having to rebook some passengers on other airlines for the two-week period would cost between it €280 million, but the figures it released at the start of October revealed the cost to be between €320 million to €350 million.  The remainder of the cost stems from what the airline termed a “delay” in year-end bookings that could partially resolve itself in the coming weeks.

Pierre-Francois Riolacci, the airline’s CFO, told reporters in Paris that the carrier had only sold roughly 28% of fourth-quarter capacity, compared with an average of 30% in past years.

“The group estimates that part of this delay could be progressively reduced over the coming weeks,” said the Paris-based airline in a statement, adding that this was a difficult figure to quantify given the nature of the cause.

Pilots were protesting the airline’s plans to move much of its European flying to a low-cost subsidiary, which would result in lower pay for many pilots.

Total passenger traffic at Air France-KLM, which operates multiple airlines including KLM Royal Dutch Airlines, was down 16% in September, compared with the same period one year earlier, the company reported.

(Photo: Accura Media Group)

Accura News

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