Air France Proposal Deemed Fit to End Strike by French PM

Bloomberg News

French Prime Minister Manuel Valls said Air France-KLM Group's latest proposal to striking pilots should be enough to end the labor dispute at the airline.

Air France executives have helped advance negotiations since pilots began striking on Sept. 15, Valls said in a statement to Agence France-Presse. There's currently no need to appoint a mediator, he said, referring to union representatives' offer yesterday to stop striking if the French government names an intermediary to facilitate discussions. Representatives of pilots' union SNPL did not respond to requests for comment today.

The pilots' strike, the longest in 40 years at Air France, continued over the weekend. Service will be maintained on more than half of flights today and 45 percent tomorrow, according to a statement from the airline. Talks have focused on Chief Executive Officer Alexandre de Juniac's plan to to cut short-haul costs through the expansion of the Paris-based company's discount unit. The French state holds a 16 percent stake in the group.

Pilots began striking Sept. 15 and voted to extend the walkout until Sept. 30 in a clash that's costing Air France 20 million euros ($25 million) a day. They resumed talks this week after Air France dropped plans for a new discount division, Transavia Europe, which would be separate from the French and Dutch arms where De Juniac has struggled to reduce costs since taking over as CEO about a year ago.

The Transavia project aims to cut European expenses and stem the advance of EasyJet Plc and other discount carriers that have captured a major chunk of the short-haul market. Air France-KLM will now focus on further developing Transavia France, the company said in a statement Sept. 25.

To contact the reporter on this story: Marie Mawad in Paris at mmawad1@bloomberg.net

To contact the editors responsible for this story: Geraldine Amiel at gamiel@bloomberg.net James Herron, Tom Lavell

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