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Air France strike as Europe faces low-cost shakeup

An Air France plane is parked on the tarmac at Paris Charles de Gaulle Airport in Roissy, near Paris, Monday, Sept. 15, 2014.
An Air France plane is parked on the tarmac at Paris Charles de Gaulle Airport in Roissy, near Paris, Monday, Sept. 15, 2014. AP Photo/Christophe Ena

PARIS – At least half of Air France flights around the world were cancelled Monday as pilots kicked off a week-long strike, angry that the company is shifting jobs and operations to a low-cost carrier to better keep up with rivals.

The company’s challenges echo those faced by flagship airlines across Europe as they face tough competition from budget airlines for short-haul flights and cash-rich Gulf state carriers on long-haul routes.

In the case of Air France-KLM, French labour law makes it complex and costly to fire employees or adjust contracts in times of financial troubles. The carrier announced a plan last week aimed at saving 1 billion euros ($1.3 billion) over the next several years, and said it will transfer much of its European operations — and jobs — to low-cost carrier Transavia.

Air France pilots’ unions are calling foul, and called a weeklong strike starting Monday as they seek better conditions under the plan.

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Air France is urging passengers to change or postpone travel, estimating that it can only ensure 48 per cent of flights Monday, and just 40 per cent on Tuesday.

The Paris airport authority said only half of Air France flights were operating out of Charles de Gaulle and Orly airports. At Charles de Gaulle on Monday morning, crowds gathered at the Air France counter to try to change their tickets, and cancelled flights were removed from departure and arrival screens.

“I thought that something was up when I saw that my flight wasn’t on the departures board,” said Austrian tourist Alice White. “I hope I will be back to Vienna in time to be at work.”

Budget carrier EasyJet is watching closely — and announced an offer of extra seats to passengers stranded by the Air France strike.

In Germany, a union representing Lufthansa’s pilots says they will walk off the job at Frankfurt airport Tuesday, preventing departures by Germany’s biggest airline from its busiest airport. The two sides are locked in a dispute over the pilots’ demand that Lufthansa keep paying a transition payment for those wanting to retire early. The airline wants to cut those payments.

Other established European carriers have faced similar problems, with many struggling to adapt.

Scandinavia’s SAS, under pressure from low-cost airlines including Norwegian and Ryanair, was close to bankruptcy in 2012 when unions agreed to a $440 million a year savings package that included salary cuts and changes to work schedules and pension plans for employees. SAS, which still has higher operating costs than its competitors in the region, has since intensified its savings efforts.

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Italy’s Alitalia is being taken over by the Emirates-based airline, Etihad, after likewise teetering on the brink of bankruptcy. Unions had to agree to deep labour force cuts, and the head of Etihad will be meeting with employees in coming days to discuss the airline’s organization. Etihad is injecting 560 million euros ($750 million) for a 49-per cent stake, and it aims to return Alitalia to profitability by 2017.

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Kirsten Grieshaber and Geir Moulson in Berlin, Colleen Barry in Milan and Karl Ritter in Stockholm contributed to this report.

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