The strike in 1971, involved Air Inter, UTA, as well as Air France and lasted 26 days, this one seems to be coming to an end as management seems keens to cancel its low-cost expansion under pressure from the French government.
Air France strike: What started it?
The strike began when Air France KLM SA (ADR) (OTCMKTS:AFLYY) (EPA:AF) announced its intention to invest 1 billion euros in the no-frills Transavia unit in order to better compete with Ryanair Holdings plc (ADR) (NASDAQ:RYAAY), easyJet plc (LON:EZJ) (OTCMKTS:EJTTF), and other discount carriers. The French National Union of Airline Pilots, or S.N.P.L. as it is generally referred, argued that this move would drive too many jobs outside of France and would also drive down pilots’ salaries. The union represents roughly 71% of Air France pilots. Late yesterday, management announced that it cancelled this plans to expand Transavia throughout Europe and concentrate its efforts on France.
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Following the announcement, S.N.P.L representatives that released a statement that said, “made reasonable proposals regarding the employment conditions” needed to end the strike, but “management chose to refuse them.”
“The strike is continuing for now,” the union said, adding that it was “determined to pursue negotiations to rapidly find a solution.”
Despite the fact that Air France has stated that it expects the strike to continue tomorrow and that it will only operate 48% of its flights, Air France gained in Paris trading Thursday. It gained nearly 2% in midafternoon trading but gave up half that by close with Cédric Leurquin, an Air France spokesman, calling move by management a “gesture.”
The French government, which own 16% of Air France is adamant that the strike must end soon with the airline losing over 20 million euros each day it continues and it doesn’t help the country’s desired image as a competitive place to do business.
“This strike must end now,” Stéphane Le Foll, a spokesman for the French government, told Radio Classique. “We’re stuck here on a project that, strategically, is important for the company. We have to find the ways and means for Air France to extend its activity in low-cost flights.”
An Air France KLM SA (ADR) (OTCMKTS:AFLYY) (EPA:AF) spokesperson referring to withdrawing the Transavie Europe project on Wednesday said, “There is now no reason to strike because there are no longer any concerns about relocation. We therefore call on the striking pilots to return to work immediately.”