Air France Pilot Strike Costs Estimated At €500 Million
Published on Oct 9 2014 12:24 PM in General Industry
Air France has estimated the total cost of last month’s two-week pilot’s strike at €500 million, clearing out over a fifth of its parent group’s estimated full-year core profit.
Air France-KLM had already lowered its target for 2014 earnings before interest, tax, depreciation and amortisation (ebitda) in July, from €2.5 billion to between €2.2 billion and €2.3 billion, citing reasons of overcapacity on long-haul flights and weak cargo demand. What is more, the company reported a drop in its total passenger traffic of 15.9 per cent in September, while bookings for the fourth quarter were down by between 1 and 2 percentage points. The €500 million cost estimate of the strike included a €320 to €350 million direct impact, which took into account lower receipts and the purchase of tickets for customers on rival airline, costs only being partially offset by savings on fuel and other costs. The remainder of the total was due to the delay in bookings. Chief financial officer, Pierre-Francois Riolacci said that the airline had sold 28 per cent of capacity for the fourth quarter, down from the 30% it usually sells at this point in the year.
In a statement, the carrier said, “The group estimates that part of this delay could be progressively reduced over the coming weeks,” adding that it was difficult to “quantify this adjustment exactly given the exceptional nature of the event.” Air France Pilots are campaigning for the right for future pilots to be recruited on the same conditions as those currently working for the main airline, however, management have said it will not give way.