Air France-KLM : a social conflict already expensive

Even before the announcement, Friday, may 4, of the rejection by the employees of the pay agreement subject to staff consultation, the action Air France-KLM was already entering a zone of turbulence. The title was clinched in the close of 2.86 %. The group had presented in the beginning of the day of quarterly results a little mixed at best. After three consecutive quarters in the green, the group operating result is back in the red.

To the point that the group needs to digest a net loss of 269 million euros in the first quarter, leaded by a three-day strike (February 22, 23 and 30 march) of Air France over this period. According to the calculations of the firm AlphaValue, the impact of these first three days was 75 million euros on the operating result for the first quarter.

The addition should be even higher since the company regrets already 13 days of strike action since the month of February. Management has begun to make its accounts and estimated that “300 million euros a minimum,” the negative effect on the operating results and anticipates that this will be for 2018 ” a significant decrease compared to 2017 “. This degradation is expected also takes account of a higher the invoice for fuel, an increase of 350 million euros compared to 2017. This rise is explained by the rise in oil prices, which are established beyond the $ 70 / barrel (for 58.5 euros).

A strong competition

The table is much darker than at the same time, the competition eases off not. The air group IAG, parent of British Airways (BA) and Iberia, saw its results soar in the first quarter : its operating profit (excluding exceptional items) rose by 75 % to € 280 million, its costs remained virtually stable.

It is this competitive environment that was particularly put forward by Air France-KLM to refuse to accede to wage demands…

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