sky

Air France-KLM Group, ranked as Europe’s biggest airline since its formation in 2004, is teetering toward an exit from the industry’s top tier after a year in which efforts to slash costs foundered on union opposition. While figures due next week are likely to confirm the Franco-Dutch company as the No. 1 regional operator by traffic, a multiple of passengers and kilometres flown that’s viewed as an industry standard, the number masks a mounting crisis: by a host of other measures, the carrier looks distinctly second rate. Shares of Air France-KLM fell 12% last year as CEO Alexandre De Juniac’s restructuring faltered. It trails Germany’s Lufthansa, the European No. 2 by traffic, in revenue, is dwarfed by BA parent IAG SA, the No. 3, in value, and has had four years of losses. Air France-KLM’s market capitalisation of E2.3b is less than a third of the E7b worth of Lufthansa, whose stock rose 5.3% in 2015 despite labor woes, and barely one-seventh that of IAG, valued at GBP12.1b after a 26% share surge. De Juniac faces many of the same challenges as Lufthansa CEO Carsten Spohrand Willie Walsh of IAG, as discount carriers including by Ryanair, Europe’s most valuable airline after a 50% share jump in 2015, attack the short-haul market and Mideast raiders led by Dubai-based Emirates divert lucrative inter-continental passengers through their Persian Gulf hubs. What marks the Paris-based carrier out are higher labor costs at its French arm and a perennial incapacity among top management to overcome workplace opposition, compounded by interventions from the French state -- which owns a 15.88% stake -- whenever the leadership digs in and disputes drag on. “Walsh, first at British Airways, then at Iberia, has confronted these issues,” said Jonathan Wober, an analyst at the CAPA Centre for Aviation in London. “Spohr hasn’t quite done it, but he’s tough and is trying his hardest.”<br/>

Delta can keep flying out of crowded Dallas Love Field, a federal judge ruled, thwarting Southwest at least temporarily in its bid to control 90% of the near-downtown airport. US District Judge Ed Kinkeade said in an order Friday that Delta’s use of two gates for five flights at the airport don’t unduly interfere with Southwest’s schedule. Delta, though, would be harmed if it was forced out of Love Field before a final resolution of the case. Delta argued Southwest was establishing a near monopoly when it began subleasing the two gates Delta was using last year, a move that gave the Dallas-based carrier control of 18 of 20 gates at Love. Delta is seeking to unwind the sublease or force Southwest to continue to accommodate Delta flights. The case now moves toward trial for a final decision on that request. Southwest will continue operating 180 flights a day at Love Field, serving 50 non-stop destinations, said spokesman Brad Hawkins. “This isn’t the end of this case and we are evaluating our future options,” Hawkins said. “Southwest invested in setting Love Field free so that it could once again be both a source of pride and utilized to its fullest potential.”<br/>