Pilot Strike for Air France Costs Millions in Revenue

The second biggest network carrier of Europe, Air France has suffered immensely due to the pilot strike this month. The airline reported that the strike had cost them a total loss of approximately 500 million euros. The strike, which started on the 15^th of September, cut the estimated profits of the airline by one fifth, which led to the shares of the airline is a 13 month low.

Before the strike, Air France had estimated its profits in the month of July to be approximately between 2.2 and 2.3 billion Euros. It should be noted that this profit was declared after deducting for depreciation, amortization and taxes.

The strike not only cost the airline a loss of revenue but also added intangible harm to the reputation of Air France. The strike was due to the expansion of the budget plan for Transavia. Because of the budget cuts, the pilots were apprehensive that this contract of low-cost would damage the conditions at the parent carrier. The airline was only operating 48% of its flights while over 519 flights had been cancelled.

U.S. securities firm Jefferies was hit hard although the reason may be traced back to the economy in general and the strike as well. France which is one of the biggest economies in the eurozone stated that it suffered zero growth in the first two quarters of the year.

The Franco-Dutch group stated that the total passenger traffic has decreased by 15.9 per cent in September as compared with the year before. In addition to this, further bookings fell by approximately 1 to 2 percentage points for the fourth quarter.

The airline suffered a direct cost of approximately 320 million to 350 million. This means that there were lower receipts and purchase of tickets. Although there were savings on furl, a further loss was due to the delay in bookings.