mikewot

Air France's trade unions have appealed to French Prime Minister Jean-Marc Ayrault for government support as their airline goes through a "crisis of exceptional gravity... which is presenting the carrier with serious, economic and financial problems".
In a letter sent to the PM last June and made public yesterday, union representatives on the Air France board mainly blame the Gulf carriers and the growing number of low-cost carriers (LCCs) for their employer's financial predicament.
According to La Tribune, they claim the three main Gulf airlines — namely Emirates, Etihad and Qatar Airways — have taken away market share on routes to Asia, Africa and the Middle East.
The letter reads: "Whenever additional traffic rights are granted to those companies it results in a loss of activity and related employment in Europe."
The unions of Air France and the Air France-KLM Group want the French government to "freeze any new allocation of traffic rights until a fairer competition is finally established".
By "fairer competition" they cite the fact that Gulf carriers benefit from more benign operating conditions in the Gulf compared to Europe (see our New World Order special report, December 2010).
However, they note that as the government is seeking to sell its Dassault Rafale high-performance fighter jet to Qatar and the UAE then its request may fall on deaf ears. It is important to note here that trade deals can be won or lost over issues as simple as airline traffic rights.
Competition from LCCs is also blamed for Air France's worsening financial plight.
These airlines "have headquarters in the most accommodating European countries in terms of tax and social security contributions. The most effective LCCs are English or Irish. None of them is French. Therefore it deprives our country of these jobs."
Air France faces higher wage costs than its European rivals which places it at a competitive disadvantage. This is partly because of high payroll taxes.
The letter reveals that staff costs account for 32.4 per cent of Air France's operating costs, as against 28 per cent for KLM, 24 per cent for IAG (BA and Iberia) and 23.4 per cent for Lufthansa.
Finally, the issue of high fees at ADP (Aeroports de Paris) also disadvantages Air France.
"ADP is a monopoly and airlines are captive customers," concludes the letter.

Obviously not the fault of high costs.

http://www.businesstraveller.com/new...lf-and-low-cos

Blue Cat

awful airline

OleJanx

The fact that Air France is notorious for shit service and stroppy staff, making them last choice for most people doesn't seem to have crossed their ( small) minds.

Millsyisland

I expect they'll go on strike shortly. Or trash all their planes in protest.

That'll help.

Arcadia

I agree, crap ground staff too..unhelpful and arrogant.

shiva

New world order special


Hhmmm

OleJanx

Disquietening, isn't it?

abi31

I suggest they strike. Usually works for French businesses blackmailing their own government.

Bahtatboy

They've got a point, though.

Norm_uk

Unions have gone way beyond the original idea of making jobs safer and preventing abuses by management etc. We work in countries with no unions and most of us don't feel the need to strike...we simply change jobs.

What makes Air France employees so special that they cannot work for similar pay and benefits to Etihad or Singapore Airlines staff?


N.

Bahtatboy

Because (I assume) the French social welfare system, from which they can't escape, limits them to 35 hours per week and relatively early retirement. I also assume that AF can't escape from that either. So that's Point 1: AF has to play by French employment rules (including all the other employment legislation that doesn't apply in the UAE), and therefore costs are automatically higher.

Point 2 is that EH/AH's other operating and capital costs are far lower because of subsidies, absence of tax (corporate, social welfare and fuel being, I imagine, the three most significant) and access to slave labour.

I can't see how any carrier from any industrialised country can compete.

The Dean

The debate about the influence of Gulf-based airlines has also proven one thing - these days people are willing to spend more for better service. This explains why the expensive Emirates flights to Europe tend to be fully or near-fully booked, while cheaper (often European) carriers rarely are.

mikewot

Aviation fuel is not taxed much, which seems to me extremely stupid. But airlines, being very clever, work out the best places to buy fuel and when i.e. fill up to full in France for a flight to UK and return and take the hit on weight, or only have minimum fuel to UK and uplift there.

Bahtatboy

Ok, that's one assumption dealt with. So tax in Europe (let's include UK in that for the sake of argument) on aviation fuel is considerably less that that on petrol? Is there any logic in that? (Apart for giving subsidies to European carriers.)

mikewot

No logic at all.