Air France-KLM has posted its largest quarterly net profit in five years as it battles to force its employees to work longer hours for the same wages.
The airline reported a net profit of EUR 480 million (AUD 740 million) in the third quarter, a huge leap from a revised EUR 86 million profit in the corresponding period a year earlier.
Lower fuel prices helped a lot. Chief financial officer Pierre Francois Riolacci said lower jet-fuel prices had saved about EUR 500 million. The result also looks good because the year-earlier comparison was affected by a costly pilots strike.
The bumper profit comes at an embarrassing time for Air France-KLM management, and may complicate the company’s struggle with its pilots’ union.
Having failed to secure the agreement of its pilots to a plan launched earlier this year to increase pilots’ working hours while keeping their pay at the same level, Air France got tough last month and announced a so-called ‘plan B’ to cut 2900 job cuts and slash the airline’s network.
That produced protests, culminating in wild scenes in which an Air France manager had his shirt ripped off by an angry mob of union protestors who stormed the boardroom (see: Angry ‘clothes off!’ mob rips airline manager’s shirt off).
The airline has since backpedalled a little, saying “the 2017 activity-reduction plan can still be avoided if negotiations conclude quickly.”
Air France-KLM management say staff must work harder to compete with low-cost and Gulf carriers.
Written by Peter Needham