Air France: Seven years of losses before Works Council clash reveals a cracked mirror

Jumping from specialist media and the business pages, Air France's struggle to restore profits by confronting industrial relations issues has received the attention of global mainstream media. Images of Air France managers stripped of the shirts have been seen across the world.

Air France failed to agree with flight crew unions on improved labour productivity by its self-imposed deadline of 30-Sep-2015. As a result, it decided to implement its alternative plan of cutting back on long haul operations and staff numbers. Although the employees that attacked management presenting the plan to the Works Council may not be fully representative of the Air France workforce, the episode holds up a mirror to both labour and management.

The mirror is cracked and Air France has had seven years of losses. It does not report separate results, but CAPA has pieced together an analysis of Air France's financial performance since the KLM merger in 2004. Its margins have been below KLM's throughout and also lag other European airlines. At the heart of its problem is low labour productivity. Improvements in this area will be vital to a sustainable future for Air France.