Air France-KLM is being brought to its knees by its unions
Air France likes to present itself as a cut above other European airlines. The company’s strategy is to justify its high ticket prices by offering a premium service. But facing intransigent unions at home and competition from abroad, the airline’s financial fizz is rapidly going flat. Air France’s trade unions are demanding an immediate pay rise of 5.1%. That looks bearable set against profits of E1.5b (US$1.8b) last year. But a decent-looking performance in 2017 owed much to low oil prices. Its finances are weakening fast. The company has warned of a big drop in profits this year. A series of 14 one-day strikes has already cost Air France at least E300m in recent weeks. Rising fuel costs, only half of which are hedged, and a squeeze on fares caused by airline overcapacity in Europe threaten to plunge Air France into the red sooner than its peers. <br/>
https://portal.staralliance.com/cms/news/hot-topics/2018-05-11/sky/air-france-klm-is-being-brought-to-its-knees-by-its-unions
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Air France-KLM is being brought to its knees by its unions
Air France likes to present itself as a cut above other European airlines. The company’s strategy is to justify its high ticket prices by offering a premium service. But facing intransigent unions at home and competition from abroad, the airline’s financial fizz is rapidly going flat. Air France’s trade unions are demanding an immediate pay rise of 5.1%. That looks bearable set against profits of E1.5b (US$1.8b) last year. But a decent-looking performance in 2017 owed much to low oil prices. Its finances are weakening fast. The company has warned of a big drop in profits this year. A series of 14 one-day strikes has already cost Air France at least E300m in recent weeks. Rising fuel costs, only half of which are hedged, and a squeeze on fares caused by airline overcapacity in Europe threaten to plunge Air France into the red sooner than its peers. <br/>
