Julian Moxon/PARIS
Air France's management and pilot unions have finally struck a deal which should end years of dispute and allow the airline to proceed to partial privatisation next year.
The agreement, a refined version of the one that ended the crippling pilots' strike in June, is regarded as unprecedented. It provides for a three-year period of stability before renegotiation and imposes tough new criteria on the notice required before a strike.
The essence of the deal provides for a reduction of pilot salaries in exchange for shares, a concession long demanded by management as part of a major cost reduction plan.
Air France president Jean-Cyril Spinetta says the final figure for the amount saved depends on the valuation of the airline and on exactly how much of the permitted 12% of capital the pilots eventually take.
The deal is broken into four main components: a "basic" element in which an annual salary cut of Fr11,575 ($2,100) is implemented in exchange for around 3% of shares for pilots at the beginning of their employment, or 2% for those with longer service. A "complement" to this allows pilots to purchase further shares in exchange for a Fr12,000 salary cut over seven years, up to a maximum share value of Fr74,700. Third, pilots will be able to purchase stock options. Pilots will also take seats on a "strategy committee" presided over by Spinetta, as well as on the finance committee. They are eligible for a seat on the board as soon as they own more than 4% of the shares.
The deal, if approved, will allow Air France to take full advantage of its developing hub at Paris Charles de Gaulle, which now benefits from a third runway (opened on 13 October), to be followed by a fourth in 1999. This will allow the carrier to increase capacity and develop its fleet plans. Other airline unions have not reacted so favourably to the deal.
The release of capital by the Government, originally set for late this year, has been put back to "early 1999" and will still leave it with a stake of around 53%.
Air France remains outside any global alliance, although it is understood to be discussing plans for a new grouping, called "World Wings", with Continental Airlines, one of its two US code-sharing partners (the other is Delta Air Lines), Northwest Airlines, KLM and Alitalia.
Source: Flight International
