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Turbulent times for Europe flag carriers

Monday, September 15, 2014 - 01:56

Air France pilots have started a week-long strike and they'll be joined by Lufthansa pilots on Tuesday. Ivor Bennett looks at the growing crisis facing some of Europe's main flag carriers as they try to take on budget rivals.

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It's become a familiar sight at European airports. Queues of passengers left stranded as industrial action kicks in. This time it's Air France-KLM. Over 50 percent of flights cancelled on the first day of a week-long walkout by pilots. Director of control operations Catherine Jude. (SOUNDBITE) (French) DIRECTOR OF CONTROL OF OPERATIONS AT AIR FRANCE CATHERINE JUDE SAYING: "On behalf of the whole company, I would like, to apologise to our clients. This strike penalises all our travellers." The pilots are protesting against plans to cut costs. The company wants to transfer jobs to its budget carrier Transavia in a bid to keep up with competition. With just 40 percent of flights guaranteed on Tuesday, the company is losing money fast. The CEO predicting losses of up to 15 million euros a day. Graham Dunn is an editor at Industry magazine Flightglobal. SOUNDBITE (English) GRAHAM DUNN, EDITOR, FLIGHTGLOBAL, SAYING: "The strike will cause some pain. there'll be cost in it one way or the other and they'll take a hit from that but they will reason that they will see some benefit on the other side in terms of lower cost." The rise of budget airlines like Ryanair have forced network carriers to rethink fast. Both Air France and Germany's Lufthansa recently issuing profit-warnings. Both are now racing to expand their own low-cost services. The German carrier even considering budget long-haul. SOUNDBITE (English) GRAHAM DUNN, EDITOR, FLIGHTGLOBAL, SAYING: "Pushing through those reforms are really important. You see somewhere like Iberia where they managed to get something like a 15 percent improvement in productivity I think it was, and reduce salary there. Now that's made growth an option for Iberia in quite difficult circumstances." For Air France and Lufthansa though, it could prove more difficult. With powerful unions blocking the way. Lufthansa pilots are also striking again - this week in Frankfurt - the airline's fourth walk-out in three weeks.

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Turbulent times for Europe flag carriers

Monday, September 15, 2014 - 01:56