Air
France has said it will go ahead with plans to develop its low cost airline
within France despite objections from striking pilots.
Conditions
at the budget operator are the main sticking point between management and Air
France pilots.
Talks
on Thursday failed to find a resolution to the 12 day old strike.
Air
France said demands that pilots at the new operation receive the same pay and
conditions as at Air France were incompatible with the low-cost model.
The
pilots are demanding that the same contract be offered to all pilots across
Air-France KLM's subsidiaries.
No single contract
Air
France originally hoped to develop its low cost operation, Transavia, via
regional hubs around Europe. But
it has agreed to keep operations within France
as a concession to the unions.
However
the company insists it must be able to vary employment contracts for the budget
operation.
Air
France management said a "single contract (in particular under Air France
conditions) totally opposes the principles of the low cost model."
Air
France-KLM is in a tricky position. The loss-making airline can ill afford a
strike which it has been going on for nearly two weeks.
Yet
long term, it needs to cut its costs and win back short-haul customers who
increasingly prefer budget carriers such as Ryanair or Easyjet. The plan to
expand Transavia and let it take over many routes, was designed to do just
that.
But
Air France is not the first company to find that French unions will fight tooth
and nail to protect their MEMBERS' interests. Carmaker Peugeot, for example,
faced intense opposition over factory closures, and came close to collapse
before being bailed out by the French government and Chinese firm Dongfeng.
The
question is - if Air France does back down, does it have a Plan B?
Around
half of Air France's flights have been cancelled during the course of the
strike, which the company says is COSTING it 20m euros (£15.6m) a day.
The
company called for pilots to conclude negotiations and return to work.
BBC
Business
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