Air France strike is latest turbulence for Europe's airlines

Air France strike is latest turbulence for Europe's airlines
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The pilots’ strike at Air France is symptomatic of an industry enduring a bumpy ride – increased competition from cheaper rivals is pushing European carriers to speed up restructuring and rethink their business models.

Air France – which has long had stormy relations with the powerful unions – insists it is not trying to do down its workers but rather adjust to a changing market.

Air France CEO Frederic Gagey said: “Our plan is certainly not to replace Air France with Transavia, our plan is to make sure that Air France has all the tools necessary to tackle this new market – the “ leisure” market – as we expand Transavia.”

The former so-called flag carriers are all in a bind. Air France-KLM and Germany's Lufthansa have both issued profit warnings in recent months, Alitalia is set to undergo restructuring and loss-making Finnair said last month it is taking rapid steps to cut its costs.

Euronews aviation correspondent Giovanni Magi assessed the situation: “European airlines are at the point of no return: the short- and medium-haul market is now dominated by low-cost carriers. So in this sector the traditional carriers are having to re-orientate their business plans to remain competitive, they have to stay in the game to feed passengers through to their more profitable long-haul services.”

So far only Air France pilots are striking, but at KLM they said they were considering walking out in protest over the French-Dutch group’s low-cost expansion.

The established budget carriers are happy to take advantage of the situation, indeed EasyJet is offering extra seats to passengers stranded by the Air France cancellations.

Air France said it was responding to the intense competition and price pressure in the European market while the pilots union insisted this was an attempt to outsource their jobs to lower-wage countries in region.

Whoever is right Air France will continue to haemorrhage 10 to 15 million euros a day, until they reach an agreement.

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