Skift Take

Air France/KLM's problems run deep. Although the mere suggestion of this may sting, they should probably look to how IAG managed Iberian for clues how to move forward.

Air France’s planned negotiations with employee representatives on a new productivity drive are floundering before they even begin as unions refused to attend the first meeting.

“The process won’t serve the interests of our company,” 10 unions said in a joint statement on Sunday, confirming they won’t attend a meeting scheduled for Monday.

Air France wants to overcome the challenge of low-cost carriers on short-haul routes and Gulf rivals in the long-haul market. Management is seeking to hammer out details of a new savings drive dubbed Perform that starts this summer and runs through 2020, the Paris-based airline has said.

Air France-KLM Group Chief Executive Alexandre de Juniac and Frederic Gagey, who heads the French arm, “regret” the unions’ decision and will propose a new date for meetings, the company said in a statement. The schedule for the meeting was determined by March 12 elections within the company to elect employee representatives and not by “governance” issues, it said.

The meeting was supposed to have taken place “a few hours before” the board’s nominations committee is due to consider the renewal of de Juniac’s mandate, the unions said in their statement.

Air France-KLM remains burdened by a cost structure that has hurt its ability to compete with rivals. Its French arm lost money in 2014 because of a strike by pilots that was the longest in the airline’s history. Without the conflict, the company said the unit would have made money due to cost and job cuts in recent years.

This article was written by Tara Patel from Bloomberg and was legally licensed through the NewsCred publisher network.

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Tags: air france/klm, labor, low-cost carriers

Photo Credit: Air France planes at Charles de Gaulle airport. Regis Duvignau / Reuters