Air France KLM SA is facing its most disturbing pilot strike in 16 years. The company announced that the airline would only operate four out of ten scheduled flights on Monday due to the walkout. The pilots are starting the strike after their negotiations with the companys management over the weekend turned out unsuccessful.
Air France said on Sunday, cited by the Financial Times, that the negotiations with pilot unions were “permanent and ongoing”. The company also added: “We prefer to be realistic rather than optimistic. For the moment, we are organising our flights on a day-to-day basis.”
According to the companys statement, the strike action of about 60% of Air Frances pilots would result in more than 500 flight cancellations on Monday. This is about half of the total flights carried out on a daily basis and would affect 60 000 passengers. Air France also warned that “last minute disturbances are not excluded”, and only 40% of Tuesdays flights were guaranteed. According to the Chairman and Chief Executive Officer of the airline Mr. Frédéric Gagey, Air Frances daily losses would be in the range between €10 million and €15 million.
The French company is not the only airline, which has been recently affected by pilot walk-outs. Deutsche Lufthansa is also pressed by a series of one- and three-day pilot strikes related to retirement benefits, which resulted in significant losses for the company.
“Short-haul operations of both airlines are in quite a lot of trouble and they’re having to cut costs quickly,” said for Bloomberg Robin Byde, an analyst at Cantor Fitzgerald.
Air France KLM SA fell by 3.85% by 12:36 GMT in Paris to trade at €8.22 per share, marking a one year change of +21.13%. The company is valued at €2.57 billion. According to the Financial Times, the 24 analysts offering 12-month price targets for Air France KLM SA have a median target of €9.95, with a high estimate of €16.00 and a low estimate of €7.00. The median estimate represents a 16.46% increase from the previous close of €8.54.
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