Struggling Air France revealed Wednesday that a record-long pilots' strike last month cost around 500 million euros, in a dire profit warning that sent its stock price into a tailspin. The Air France-KLM group, Europe's second-biggest airline, was already in difficulty in a fiercely competitive sector completely revolutionised by low-cost upstarts such as easyJet and Ryanair.
But finance director Pierre-Francois Riolacci told reporters that the combined impact of the 14-day strike and the loss of future custom from disgruntled passengers would be "in the order of 500 million euros" ($632 million). "We need a few more days to finalise completely our estimates. But we think the impact on the third quarter will be in a range of 320-350 million euros," Riolacci said.
The news sent Air France shares diving on the Paris market, losing more than five percent at one point. They recovered somewhat to stand down 2.6 percent at 6.51 euros per share in late afternoon trading. Riolacci said the knock-on consequences were harder to calculate exactly but warned there would be an impact both on the last quarter of the year and the first part of next year as Air France, Europe's second-largest airline, battles to win back its reputation.
"We made some savings (like in aviation fuel) because the planes were not flying," he noted. "On the other hand, we had additional costs: putting passengers up, compensation or buying tickets from our competitors for some of our passengers, which we did not always get at the best price," he said.
Pilots at Air France waged the record-long strike between September 15 and 28 in protest at the group's plans to expand its low-cost subsidiary Transavia France. The airline, which is 16-percent state-backed, sees the development of Transavia France as crucial to compete in the cut-throat world of aviation, particularly on short-distance routes in its home market.