Possible Air France strikes on May 3/4/7/8

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This topic contains 19 replies, has 9 voices, and was last updated by  capetonianm 11 May 2018
at 23:36
.

Viewing 15 posts - 1 through 15 (of 20 total)

  • AMcWhirter
    Participant

    I just wanted to alert to the next series of Air France strikes which may take place next month.

    Air France has today issued a media release (in French language) and the link is below.

    http://corporate.airfrance.com/fr/communique-de-presse/communique-de-presse

    The strike has also been condemned by the French prime minister this afternoon.

    https://uk.reuters.com/article/us-france-strike-airfrance/air-france-says-new-strikes-put-airlines-situation-even-more-at-risk-idUKKBN1HX0SB


    FDOS_UK
    Participant

    With a hell of a shout, it’s out, brothers, out (Hudson/Ford, 1973)


    AMcWhirter
    Participant

    Note that a a greater percentage of flights will be cancelled tomorrow (May 4)

    http://corporate.airfrance.com/en/press-release/air-france-traffic-forecasts-friday-4-may-2018


    kevin46
    Participant

    That brought back memories FDOS 🙂


    Tom Otley
    Keymaster

    Results just out…

    FIRST QUARTER 2018

    Strong ongoing demand in the first quarter 2018:

    Number of passengers carried up 5.2% at 22 million.
    Traffic up 5.7%, leading to a load factor improvement by 1.7 pt.
    Group unit revenue +1.2% at constant currency compared to last year.
    However, Air France strikes have weighed on the economic performance of the Group:

    Unit costs up 2.1% at constant currency, fuel and pension charges, of which 1.7% related to strikes.
    Operating income at -118 million euros, including around 75 million euros of strike impact, compared to -33 million euros in first quarter 20171.
    The Group financial structure has been further improved:

    Net debt reduction of 285 million euros, particularly thanks to an adjusted operating free cash flow of 142 million euros1.
    Net debt / EBITDA ratio of 1.3x at 31 March 2018, an improvement of 0.1 points compared to 31 December 20171.

    OUTLOOK FOR FULL YEAR 2018

    The demand remains well oriented in a favourable business environment:

    Long haul forward booking load factors continue to be ahead of last year in average for the next four months.
    Second quarter 2018 unit revenue expected to be flat at constant currency compared to last year.
    Some guidance elements have been adjusted to take into account the Air France strike impact of at least 300 million euros on the operating result, and the macroeconomic context:

    Capacity increase at 2.5% to 3.5% for Passenger network.
    Unit cost change expected between 0% and +1.0% at constant currency, fuel and pension charges, including strike related costs and associated capacity adjustment.
    Fuel bill increase of 350 million euros compared to 2017.
    Currency headwind of around 100 million euros due to the strengthening of the Euro compared to other currencies.
    As a consequence, full year 2018 operating result is expected to be notably below 2017[1].

    The Group is targeting to further reduce its net debt compared to 31 December 20171.

    The Board of Directors of Air France-KLM, chaired by Jean-Marc Janaillac, met on 3rd May 2018 to approve the accounts for the first quarter 2018.

    There has been a positive business environment in the first quarter of 2018, with strong ongoing demand. The Group has increased its Network capacity by 2.8% compared to last year, slightly lower than planned mainly as a result of three days of strikes at Air France. Despite this unfavourable event, the network revenues grew by +4.5% compared to last year at constant currency, which enabled to partly offsett the strike and fuel cost negative impacts. The combined Passenger and Cargo operating result amounted to -86 million euros for first quarter 2018, including around 75 million euros of negative strike impact, a decrease of 97 million euros compared to last year at constant currency.

    Passenger: Strong ongoing demand for long-haul and medium-haul hubs, pressure in point-to-point network

    The number of passengers carried in the first quarter of 2018 grew by 4.4% to 19.3 million and unit revenue increased by 1.0% at constant currency.

    The long-haul network benefitted from a dynamic demand resulting in an unit revenue increase of 1.9% at constant currency. This good performance was driven by the North America, Latin America and Asia networks, with unit revenue increases of respectively 4.9%, 6.2% and 2.4% at constant currency.

    The medium-haul network was more mixed: the unit revenue was up 2.3% at constant currency for medium-haul hubs, but down -8.9% on the point-to-point network in France, mainly due to the new TGV competition on Bordeaux and Britanny.

    Outlook

    The global context remains uncertain given the current geopolitical environment, labour wage inflation pressure, strengthening of the euro compared to other currencies and rising fuel price trends.

    Demand and revenue environement:

    The latest available data from the Passenger network show a continuing positive trend in demand for May until August 2018: the current long haul forward bookings for the coming four months are on average ahead of last year levels.
    Passenger Network unit revenue is expected to be flat in second quarter 2018 at constant currency compared to last year.

    Some guidance elements have been adjusted to take into account the Air France strike impact of at least 300 million euros on the operating result, and the macroeconomic context:

    Air France-KLM plans to increase its 2018 capacity between 2.5% and 3.5% in available seat kilometers for the Passenger Network, compared to a previous forecast of 3.0% to 4.0%.
    The full year unit cost change is expected between 0% and +1.0% at constant currency, fuel and pension charges, including strike related costs and associated capacity adjustement, compared to an initial target of -1.0% to -1.5%.
    The 2018 fuel bill, is expected to increase compared to last year by 350 million euros[1], based on the forward curve of 27 April 2018 and after positive hedge result of 750 million dollars.
    A currency headwind of around 100 million euros is expected due to the strengthening of the Euro compared to other currencies.

    As a consequence, the full year 2018 operating result is expected to be notably below 2017.

    Capex plan and net debt target:

    The investment plan will be managed in the target range of 2.0 billion to 2.5 billion euros.
    The Group is targeting to further reduce its net debt compared to 31 December 2017.

    Due to the strike impacts on the 2018 Air France results, the management will carefully continue to manage the financial structure of the Group and its growth plan.


    Edski777
    Participant

    In the AirFrance/KLM group the Air France part is becoming ever more of a liability. With totally ridiculous demands from nearly all staff, management is unable to run the group in the interest of investors and passengers and ultimately the personnel. Where KLM is improving each quarter Air France is burning the profits made by the Dutch.
    KLM management have already expressed their concerns about the ongoing strikes, so far 13 days in 2018 already at an estimated cost of € 25 million a day. Not counting the loss in passenger loyalty to this brand. Where KLM is successful it is held back by the demise of Air France at the hands of its employees.

    The financial press in the Netherlands are already openly questioning whether Air France is a good fit for KLM. Check this report (in Dutch, but the figures are easy to understand)

    Anyone interested in a well performing airline?


    AMcWhirter
    Participant

    This afternoon Air France staff were balloted on their pay agreement (the cause of the strikes).

    Air France has just tweeted the following: “Staff consultation on the proposed pay agreement.* Participation rate 80.33 per cent. The result of the vote is “No” at 55.44 per cent.”

    * The cause of the recent series of strikes.


    AMcWhirter
    Participant

    Just announced …

    Air France’s CEO resigns as staff reject pay deal.

    http://www.bbc.co.uk/news/business-44011391

    It looks likely there will be two more days of strikes next week.


    Edski777
    Participant

    Alex, to add to your previous post.

    The chairman of the AirFrance/KLM group and chairman of Air France, Jean-Marc Janaillac has resigned.

    The CEO of Air France, mr Franck Terner, remains in place.

    It was already out of the ordinary that Mr Janaillac intervened in the conflict that is solely between Air France and the French unions. It was expected that Mr Terner would assume this role. All Dutch parts of the group were not affected by this industrial action.

    So after this maneuver of the AirFrance/KLM CEO the group is beheaded. It is unclear who will participate now in the negotiations with the unions on behalf of AirFrance/KLM.

    As Mr Janaillac said in a statement, Air France simply can’t afford to go along with the unions’ demands for a 6 to 7% pay rise in today’s ultra competitive market. Especially, I would like to add, with the relative low production level compared to the industry standard and at KLM.

    I am afraid we have not seen the end of the strikes at Air France and traveling on this carrier becomes increasingly less appealing.


    capetonianm
    Participant

    Contrary to my advice, the person in charge of a group of schoolchildren travelling to JNB asked me to book them on AF as it was the ‘cheapest’. I warned them at the time of booking, about 3 months ago, that they should be prepared for disruptions as well as problems connecting at CDG as the connecting times offered for the fare applicable were too short to be realistic.

    As it happens, they were lucky. They were rerouted via AMS and had a pleasant flight, now they just have the return to deal with next week. Next time, maybe they will listen.


    Swissdiver
    Participant

    A combination of two factors created the current situation: the unions’ intelligent strategy and Janaillac own goal. Edski777 explained the latter.
    Historically we saw either the pilots or the crew striking, generally separately, allowing the government to split them and win the opinion’s war. This time however unions succeeded in joining their forces. And the opinion focuses on trains’ strikes that affect them far more than Air France. I doubt therefore we’ll see any improvement before the Summer. And the unions will probably get at least partly, what they want…


    AMcWhirter
    Participant

    AMcWhirter
    Participant

    There’s a strike today. Here are the details of flight cancellation for tomorrow.

    http://corporate.airfrance.com/en/press-release/strike-action-air-france-traffic-forecasts-tuesday-8-may-2018

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