PARIS -- Air France endured its most disruptive pilot strike since 1998 on Monday, and Deutsche Lufthansa AG is preparing for another walkout today as both carriers confront worker resistance to sweeping overhauls aimed at cutting costs.
At Air France, a unit of Air France-KLM Group, 60 percent of pilots walked out Monday over plans to expand low-cost operations with flight crews paid less than at the main carrier. At Lufthansa, which has suffered a series of one- and three-day strikes over retirement benefits this year, pilots flying long-haul aircraft from Frankfurt will halt work today.
The strikes at Europe's two biggest airlines threaten to undermine efforts by management to bring costs in line with discount competitors including Ryanair Holdings Plc, which has just bought new aircraft that it says will cut fares even more. Both carriers have lost money on short-haul operations for years and are moving more business to cheaper subsidiaries, a step contested by employees concerned about their future.
"Short-haul operations of both airlines are in quite a lot of trouble, and they're having to cut costs quickly," said Robin Byde, an analyst at Cantor Fitzgerald.
Air France said it canceled 52 percent of its services Monday, and 60 percent may remain grounded today. The strike is due to run through Monday at a cost of $26 million a day in revenue, the airline said.
"We're telling people who don't absolutely have to travel to postpone their trip," Air France Head of Operations Catherine Jude said Sunday in a briefing at the carrier's Paris Charles de Gaulle airport base.
Pilots are staging the walkout as Air France-KLM Chief Executive Officer Alexandre de Juniac seeks to end decades of short-haul losses. Former Dutch charter unit Transavia will be further expanded into France with a fleet that could double in size, the company said last week, confirming plans that unions say will prompt job losses and pay cuts at the main airline.
While Lufthansa's pilots formally say the the strikes target only retirement benefits, the number of contested points has increased, including higher wages and the carrier's plans to set up low-cost operations also on long-haul routes.
Lufthansa pilots in April staged a three-day walkout, their first since 2010, forcing the airline to cancel 3,900 flights and trimming profit this year by $77 million, with bookings taking about six weeks to recover.
Since then, there was a walkout at the company's Germanwings low-cost arm Aug. 29 and at Lufthansa's main Frankfurt hub Sept. 5. Each lasted six hours, causing a total of 334 services to be canceled. Lufthansa also canceled about 140 flights to and from Munich on Wednesday when the pilots walked out at the carrier's second German hub. For the year, the total number of flights canceled is 4,400 flights.
For the French carrier, this week's action could have the biggest effect on travel since an eight-day strike 16 years ago over the French government taking the airline public. That dispute involved 3,000 pilots and forced 75 percent of flights to be scrapped at a cost equivalent to $166 million now.
While Air France in more recent, smaller strikes has limited the cancellations mainly to short flights, the ability to cope with the walkout is limited this time, and pilots "who fly one aircraft can't be substituted for another," Air France's Jude said, declining to give a breakdown of likely long-haul and short-haul cancellations.
Business on 09/16/2014