Friday, 4 May 2018

Air France-KLM warns of falling profits and future strikes.....

The European giant, Air France-KLM is warning of a substantial profits fall this year, mainly due to strike action at Air France.

Many European airlines are currently riding high with positive growth in passenger demand and fares due to the positive rising economies within Europe, however, the strike action at Air France will negate the airline from taking advantage of such growths. 

Air France-KLM reported its 2018 first-quarter loss had rocketed to €118 million euros compared to €33 million euros a year ago. The results were released as some Air France staff conducted the 13th day of strike action and ahead of a crunch ballot for the group’s chief executive, who has said it would be hard for him to stay if staff vote against the pay proposal. “What I regret is that the year started well in commercial terms, demand was there,” said Chief Financial Officer Frederic Gagey, informing the media “It’s a great shame, and I think a majority of Air France staff feels this way too, that we are not able to take advantage of this environment.”

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Air France has estimated that the strikes have cost the airline around €300 million euros - so far. Each day of strikes costs between €25-30 million euros at least. There are a further four days of strikes called for in May so far and more could be on the way.

With hopes of bringing a swift end of to the dispute, Air France is balloting staff directly over its offer of a 7 percent pay rise over four years, after unions rejected the proposal. The ballot is open until 1600 GMT on Friday. 

KLM performed much better over the same period, showing a profit of €60 million euros, an increase of over €30 million euros.