Air France pilots strike wipes 20 percent off group's profits

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Air France pilots strike wipes 20 percent off group's profits

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Air France says last month’s pilots strike cost the company 500 million euros, wiping off more than one fifth of its parent group’s profits.

The pilots wanted to convince Air France-KLM to offer its Transavia pilots the same contracts that its Air France pilots have, regardless of where they are based.

The company said this was not compatible with the low-cost business model.

Last month’s walkout grounded 60 percent of flights, highlighting differences in pay, conditions and welfare coverage between European states.

Air France-KLM said total passenger traffic fell 15.9 percent in September, adding that bookings for the fourth quarter were down by between 0ne and two percentage points.

The company said the 500 million euro cost estimate included a 320-350 million euro direct impact that took account of lower receipts and the purchase of tickets for customers on rival airlines, with costs partly offset by savings on fuel and other costs. The remainder was down to the delay in bookings.

Air France-KLM, Europe’s second-biggest network carrier by revenue, had already revised down its target for 2014 earnings before interest, tax, depreciation and amortisation (EBITDA) in July from 2.5 billion euros to between 2.2 and 2.3 billion.

At the time, it mainly cited overcapacity on long-haul routes and weak cargo demand. The strike has added to its woes.

After the strike was called off, Air France-KLM said it planned to speed up the development of Transavia. Vital, it says, for the company’s well-being at a time when low-cost airlines are flying high across Europe.