The longest-ever strike by Air France pilots was slammed as "catastrophic" by the airline sector Friday, as bitter talks over the company's low-cost subsidiary remained deadlocked.
Over half of Air France's fleet was grounded for the 12th day running, and looked set to remain so into the weekend as pilots refused to budge after days of marathon talks with management.
The strike at Europe's second-largest flag carrier is costing an estimated €15 million to €20 million ($19 million to $25 million) a day. Air France's share price has fallen nearly 15 percent since the strike began.
"This strike is catastrophic for the French aviation sector," read a joint statement from key industry unions, including those representing travel operators.
"In a more-than-morose economic context, it is compromising a future that is already seriously under threat," read the statement.
The protracted strike has also prompted anger amongst aviation staff grounded alongside their planes, who were set to protest against the stoppage on Friday for the second time this week.
Tricky negotiations were set to get underway again late Friday, said the airline's second largest pilots union SPAF, which blamed management for the "deterioration of the situation".
Unions extended the strike until Tuesday over the deadlock in talks.
A concession from management to bury plans to expand the low-cost subsidiary, Transavia, further into Europe was "necessary… but not enough" to stop the strike, said Guillaume Schmid, spokesman for the main pilots union SNPL.
The pilots are fighting for a "single contract" across Air France-KLM's subsidiaries to avoid being forced to accept less attractive working conditions at Transavia, which will continue to be developed in France.
Transavia currently serves holiday destinations across Europe and the Mediterranean.
Air France pilots who earn up to €250,000 a year fear some flights will be replaced with services operated by Transavia, and that they will end up earning less and have less recovery time between flights.
A captain on a Transavia flight earns up to €160,000, although co-pilots on both flights will earn roughly the same at the beginning of their career, according to internal sources.
Low-cost a 'growth opportunity'
While Air France management agreed to scrap the development of Transavia abroad, it has vowed not to completely sacrifice its plans to enter the low-cost market, a key "growth opportunity", according to chief executive Alexandre de Juniac.
The Air France-KLM board of directors has thrown its support behind management.
The withdrawal of plans to expand Transavia will come as a blow to the airline's efforts to be more competitive in the crowded and changing European skies, increasingly dominated by no-frills airlines.
France's MEDEF employers' association said Thursday the conflict at Air France – which is 16 percent state-owned – encapsulated the malaise gripping the country's crisis-hit economy.
The union action is "again dragging a company into the red," said MEDEF vice-president Jean-Francois Pillard.
"For those who want to invest or travel in France, this does not contribute, at an already extremely difficult time, to improving the image of the country," he said.
Air France has already implemented an ambitious restructuring plan to reduce costs and improve efficiency.
"Low-cost airlines now represent between 25 and 45 percent of air traffic in Europe, depending on the country," said Didier Brechemier, an aviation expert at consultants Roland Berger.
Irish low-cost airline Ryanair will soon expand its fleet to 400, which would take it above Air France's stable of 350 aircraft.
"With competitors like that it's not hard to see why Ryanair is the fastest-growing airline in Europe," company boss Michael O'Leary said of Air France's offer to put expansion plans on ice.