Air France Withdraws Proposals to Pilots Amid Clash on Cost Cuts

Air France-KLM Group’s French unit withdrew proposals made to pilots to soften the impact of cost reductions, creating an impasse that may prompt the airline to take pilots to court.

The unit, Air France SA, had been discussing with pilots for six months how to implement certain measures in the cost-cutting package known as Transform 2015. Management offered some sweeteners to show good faith, though it’s now taking those off the table, a company spokeswoman said Thursday, after the pilots’ union sought to have members participate in a referendum on the airline’s approach to a turn-around.

Without backing from the pilots, Air France will have a tough time pushing through the expense reductions it needs to return the company to profitability. Air France-KLM has lost money in each of the last four years and plans a new, five-year plan of further cuts after Transform 2015 proved insufficient.

While ground workers and cabin crew agreed to implement the Transform 2015 measures, pilots balked at some of them, leading the airline to seek arbitration. When pilots refused, Air France asked a high court near Paris to rule on the matter. The court on July 3 said it didn’t have jurisdiction, and told Air France to settle the question with a trial judge.

The airline didn’t immediately push the dispute to a trial judge, but now may do so given the breakdown in talks, the company spokeswoman said Thursday.

Even as Air France management is still arguing with pilots about the Transform 2015 measures that have yet to be implemented, it is also aiming to wrap up separate talks by the end of September on the new, five-year plan. If an agreement can’t be reached, Air France KLM Chief Executive Officer Alexandre de Juniac told journalists at a conference in July the airline will take “severe measures” to slim down the long-haul network.

SNPL Alpa Air France, the biggest pilot union, didn’t immediately have a representative available for comment.

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