Gilbert Sedbon/PARIS

FAILURE TO AGREE on a new contract for pilots at Air Inter Europe is pulling the financially struggling domestic and regional wing of the Air France Group towards a new crisis.

Passenger traffic fell by 7% in 1995, to 15.7 million, largely because of tougher competition from other French and European airlines, and the growing influence of the French TGV high-speed rail network. Load factors also declined, from 66.7% to 64%, and the expansion of the domestic market failed to reach expectations.

The net result is that financial results shortly to be published are likely to show a loss of Fr500 million ($98.5 million), compared to a Fr21 million ($4.15 million) profit posted in 1994.

Air Inter Europe general manager Jean-Pierre Courcol has denounced the 1971 pilot and cabin-crew accord which expired on 1 February, following failure to reach agreement on a 15% productivity gain. Air France Group chairman Christian Blanc has dismissed union demands for time off in exchange for a salary cut, but promises to continue working towards integrating Air Inter Europe and Air France pilots to eliminate differentials.

In the absence of a new work agreement, the pilots have reverted to the previous 1971 accord, and have until 1 April 1997, when Air Inter Europe becomes Air France Europe, to reach a new pact.

It remains an uneasy truce, however, with the pilots unions bracing themselves for another round of strikes following 1995's confrontations. "It is a declaration of war," says their spokesman Jean-Claude Tromeur.

Source: Flight International