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Air France-KLM third-quarter earnings hit by strike

A two-week strike by Air France pilots in September cost €416 million in lost revenues, it emerged today.

Parent company Air France-KLM revealed that the 14-day walkout hit operating results by €330 million.

The carrier is to speed up cost-cutting after revealing that third quarter earnings were down by €1 million to €682 million, although no details of job losses predicted in Dutch media emerged in the results announcement.

The group said it “firmly denies” the content of the articles which speculated that up to 7,500 jobs could be lost.

The operating result for the third quarter was down by almost €400 million to €247 million in the same period last year.

The operating result of the Air France-KLM passenger division more than halved to €211 million in the three months from €584 million a year earlier.

Air France-KLM said: “The group has the firm intention to limit the financial consequences of the pilot strike and of the weaker unit revenue trend that developed over the past summer.

“This will be achieved thanks to the further adaptation of its investment plan, the acceleration of unit cost reduction measures, and through dynamic management of its asset portfolio.”

The carrier is taking action by cutting winter capacity on short and medium haul routes by 11.3%.

However, the group is forging ahead with expansion of budget arm Travsavia – subject of the pilots dispute – with a 56% winter capacity hike.

Air France and its pilots’ unions finalised a draft agreement earlier this month covering the development of Transavia in France.

“If this agreement is validated, it will ensure the entirety of the Transavia development plan in France over the next five years,” Air France-KLM said

This includes continued growth next summer with the fleet increased by five aircraft to 21 as Transavia becomes the largest low cost carrier at Paris-Orly airport.

The aim is for Transavia fleet to expend to 37 Boeing 737s by 2019, operating flights from all French airports excluding Paris-CDG, notably on destinations already served by Air France.

The group wants Transavia to maintain its own operating and pay conditions, “which are key to achieving its unit cost and operating flexibility objectives”.

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