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Air France offers deal to striking pilots

Article By: ,  Financial Analyst
September 25, 2014 11:15 AM

Air France has offered a new deal to put a halt to a ten-day pilot strike which has grounded half of its flights.

The French airline said in a statement that it would scrap plans to expand its Transavia low-cost airline in Europe, if the strikes were stopped immediately and pilots returned to work. It added that there would be "a renewed guarantee that there will be no relocation" of jobs as part of the deal.

Pilots have been on strike in response to the lower rate of pay being offered by the expanding Transavia in comparison to Air France. They have warned that the strike could go on indefinitely unless the European expansion is scrapped. Air France has responded by instead saying that it would only increase the Transavia carrier in France.

Chairmen and chief executive officers of Air France, Alexandre de Juniac and Frederic Gagey said in a statement: "Our Transavia project is a 100 per cent pro-France project. It is about developing Transavia to encourage growth in France and quickly create more than 1,000 jobs in France (including 250 pilot jobs).

"With the withdrawal of the Transavia Europe project, there is now no reason to strike because there are no longer any concerns about relocation. We therefore call on the striking pilots to return to work immediately."

Air France is keen to end the strikes as it has been costing the airline up to €15 million (£11.8 million) a day. The company announced a profit warning in July as shares in the airline dropped over five per cent to €8.90. Air France-KLM stated that the announcement was made in response to problems with overcapacity and warned that it could lead to job cuts in the future.

Despite the airline deciding against expanding Transavia through Europe, shares in the airline grew by 1.1 per cent on Wednesday (September 24th) to €7.60 on the London Stock Exchange.

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