PARIS: Chief Executive Officer (CEO) of Air France Franck Terner formally presented for consideration, a draft of the carrier’s low-cost long-haul virtual carrier project to its SNPL and SPAF pilot unions.
A cornerstone of Air France-KLM Royal Dutch Airlines chief executive Jean-Marc Janaillac’s Trust Together restructuring plan, the Boost project will allow Air France to compete with the Low-Cost and Gulf carriers in “ultra-competitive” medium-/long-haul markets ex-Paris CDG where it has been forced to withdraw.
Terner said in a statement that under the auspices of Boost, Air France will create a NewCo subsidiary whose launch is expected to occur in autumn of this year. It will use A320s to serve medium-haul markets initially. Thereafter, longhaul flights will begin in summer 2018 using A340-300s first before graduating to A350-900s in 2019.
Under the proposed labour contract, the NewCo’s flights will be operated by Air France pilots according to Air France-stipulated rules of use and pay. Productivity and efficiency improvement incentives will ensure Boost’s pilot cost-savings and will also contribute to Air France’s overall competitiveness.
Frank said management had made “a lot of concessions” to the pilots to arrive at a “balanced compromise”. As such, instead of recruiting pilots from Air France’s mainline operation and employing them at more economical rates in order to achieve 15% savings, management will now demand a 1.5% increase in productivity from all Air France pilots so as to achieve similar economic gains.
“This draft agreement is a balanced compromise which reflects the constructive spirit in which we have conducted these negotiations,” Terner said. “It must enable us to build the future of Air France, with the pilots and all company staff, on the basis of a solid project of growth and recovery.”
Cabin crews will also be recruited and paid at market costs which are reported to be 40% cheaper than Air France’s mainline unit.
Given their majority voting power, Air France’s pilots’ unions have the ability to block any project modifying the airline’s business scope – including that of Boost.
