Unions imperil Air France's future

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Air France unions must realize the damage they are doing to their company, which declared the cost of their strikes through mid-April was €220 million ($272 million). But do they understand how much they are jeopardizing their own futures and those of the other non-striking employees who make up the majority of Air France’s workforce?

Air France pilots, cabin crews and ground staff have staged nine days of strikes since February and scheduled two more for late April. They are also threatening more strikes in May. The situation became considerably worse April 20 when the unions rejected the company’s latest offer, prompting Air France-KLM Group CEO Jean-Marc Janaillac to spell out the peril.

"In the face of such a severe situation and because the company's future could be under threat, I have decided to launch this consultation with all staff who over several years have been fully committed to improving Air France's competitiveness,” Janaillac said. “I cannot accept the disaster unfolding whereas a large majority of staff are not taking part in the strike action. Therefore, to put an end to this disaster and re-affirm the entire company's commitment to the growth dynamic, I am calling on everyone to make their voices heard.”

Janaillac has ordered an electronic vote to open from April 26 to early May and declared himself “personally accountable for the consequences of the vote”. In other words, he is putting his own neck on the line.

Union leaders are demanding more than 5% pay increases across the board. Air France has increased its offer from 1% to 2% in 2018, with more increases through the following years that it says will mean an average 7% increase overall provided the company is profitable.  But if, as looks likely, the strikes continue at a cost to the airline of some €25 million each day, the ability for Air France to provide any pay increases at all will shrink dramatically. Indeed, as Janaillac makes clear, the viability of the company and the security of everyone’s jobs will be in question.

It is right and proper to expect fair compensation for a job performed.  Air France employees have given greater productivity--while maintaining operational quality--as part of the company’s ongoing restructuring to lower costs. Management’s pay offer, meanwhile, is both fair and responsible. It assures that all employees would receive annual pay increases over the next four years, albeit tied to profit targets.

But union leaders, by pushing for what is unaffordable and adding millions of euros of cost in lost revenue and operational disruption expense, are recklessly playing with the futures of those they represent and those they don’t.

They are also willfully ignoring the modern marketplace, which is dominated by the LCCs whose profitability, networks and customer base will continue to grow only faster for as long the legacy carriers do not adapt their business models and, more critically, reduce and control their costs.

It’s more than just money. Every single day that Air France’s operations are severely disrupted by strike action, some of its customers find alternatives. That may be a legacy rival, an LCC or even a train. And if they then discover they enjoyed that option—and it got them to where they wanted to be when Air France failed them—there’s the strong chance that they will try other travel options again. The longer these strikes continue, the more customers—long established or new—will weigh up whether they want to buy a ticket with an airline that may or may not fly the day they set off to the airport.

In other words, the unions are not just messing with Air France’s profitability. They are endangering its image and trustworthiness. They are encouraging even Air France’s most loyal customers to try its competitors.

Strikes are the very last recourse when talks completely break down and a workforce’s grievances totally ignored. That is not the case here. And this dangerous game of dare threatens the very heart of the company’s viability and the future of all its employees.  

Karen Walker karen.walker@informa.com

 

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