Pilot agreement boosts Air France shares

Air France-KLM’s shares rose on Friday after its pilots backed proposals to alter their contracts and working conditions.

That is part of the airline’s three-year restructuring plan, aimed at reducing operating costs and debt.

Ground staff at Air France-KLM have already approved similar restructuring measures, leaving only cabin crews in opposition.

But analysts pointed out that the airline still has many challenges to generate profits especially as fuel costs continue to rise sharply.

Air France-KLM will cut some 5,000 jobs to turn around its short- and medium-haul business, which lost roughly 500 million euros last year.

Air France-KLM, formed from a merger of French and Dutch carriers in 2004, is snared between low-cost rivals like easyJet in Europe and Gulf carriers such as Emirates taking chunks of its long-haul premium business.

Air France-KLM has a combined 103,000 workers and is 15 percent owned by the French government.

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