The fact that Air France-KLM manages to show better financial results quarter after quarter than Lufthansa and IAG is unusual. But even more surprising is to see Lufthansa and British Airways thrown into chaos by strikes in the middle of summer, while Air France is a paragon of social peace.
Indeed, of all the major European companies, Air France is the only one not to have seen a walkout among its ranks in recent weeks, apart from a three-day strike at its low-cost subsidiary Transavia, which was not the work of Air France staff. Ryanair has not escaped this either. A stability that largely explains the group’s good performance and results from a number of factors.
Make the summer season a success
The first is probably Air France employees’ sense of responsibility after benefiting from unprecedented government support in Europe. Some of that aid — around 40% — and other deferrals have yet to be repaid, which is imperative to make the summer season successful, which traditionally generates the bulk of profits.
But that mobilization is also due to certain risky decisions made by general manager Ben Smith. Starting with maintaining a higher level of activity than competitors during the crisis, but also with the most limited downsizing possible and maintaining key skills and aircraft purchases – with the help of the taxpayer.
Air France was an early adopter of the acquisition and hesitated to hire earlier this year when prospects for acquisitions seemed vague. This has allowed it to cope with the recovery in demand and avoid the pitfalls of shortages around the world, even if the company is far from functioning optimally again.
Special attention for pilots
In addition to this volunteerism, special attention is paid to a particularly strategic category of employees: Air France pilots, without whose support any strategy is doomed to fail. In the last two years, without waiting for the epidemic to end, Air France has hired almost 700 pilots, including 400 in 2022. This has not only fueled Transavia’s growth, but has also allowed older pilots to improve their careers and salaries to see.
To this positive momentum, a nice icing on the cake has been added for Air France’s long-haul pilots: the application of Article 81A of the General Tax Code from this year, which will result in significant savings. It was an old demand from pilots’ unions that eventually caught on in the eyes of Bercy under the joint action of Air France management and the SNPL AF-TO.
A tax cherry on top
Thanks to this device, originally designed for sailors, pilots who have spent at least 20 days abroad can now reduce their taxable income by up to 28.6% in different proportions. Which advantageously replaces the deduction of the actual costs and, depending on the case, brings in the equivalent of a good monthly surcharge.
This could partly explain Air France pilots’ lower sensitivity to inflation problems and loss of purchasing power. However, only partially, because this tax deduction only benefits long-haul pilots and not those in the short and medium-haul sector. The SNPL AF-TO therefore does not want to be satisfied with this and is already calling for salary negotiations to be started as soon as the school year begins, with the declared aim of achieving a general increase in the salaries of Air France pilots. and Transavia to inflation.
They are not the only ones, as demonstrated by the very popular Transavia France cabin crew strike in July. And other personnel categories could also enter the dance after the summer mobilization.