Air France Has EU90 Million Hit on First Strike With New CE0

Updated on
  • Flight attendant strike ran seven days, hit 180,000 passengers
  • Deteriorating environment already has Janaillac in hot seat

Air France-KLM Group’s said a seven-day strike by flight attendants cost it 90 million euros ($101 million) and affected 180,000 passengers in the first walkout under Chief Executive Officer Jean-Marc Janaillac, putting further pressure on future profits as the new CEO copes with a climate that’s seen terrorism fears cut into traffic.

The strike at the Air France unit ended today, with flights set to resume normally tomorrow in the busy summer season, where airlines make most of their money. Air France management has asked flight attendants to come back to the table for talks in August as they seek to negotiate a new, multi-year contract to succeed one set to expire October 31.

Janaillac has asked for a few months to figure out a new strategy for the troubled airline as it grapples with a slump in both demand and prices in the wake of multiple terrorist attacks in France. Air France-KLM posted its first operating profit in four years in 2015, though its forecast for 2016 doesn’t include any mention of profit level. A separate four-day strike by pilots in June cost the airline 40 million euros, the airline said when announcing profits last week.

Deutsche Lufthansa AG today predicted further declines in ticket prices this year as a demand slowdown stemming from terrorist attacks in Europe meets by excess capacity across the airline industry. Yields excluding currency shifts, a measure of average fares, fell 0.8 percent from a year earlier in the second quarter, Chief Financial Officer Simone Menne told journalists Tuesday.

At Air France, pilots have agreed to refrain from further strikes until November after Janaillac promised to suspend measures intended to improve productivity. The French government still owns 17.58 percent of the parent airline.