Air France on Wednesday estimated the cost of a crippling two-week strike by its pilots last month at more than $400 million and warned that this, along with a decline in year-end reservations, could erase a sizable portion of its core profit this year.
The strike, which forced the cancellation of more than 8,500 flights and disrupted the journeys of nearly one million passengers, contributed to a 16 percent fall in total passenger traffic across the French-Dutch group Air France-KLM in September compared with a year earlier, the company said.
Air France-KLM, Europe’s third-largest airline group by number of passengers, after Ryanair and Lufthansa, said that lost ticket revenue and the cost of rebooking some passengers on rival airlines during the strike would cost it 320 million to 350 million euros, or about $404 million to $442 million.
That estimated cost was greater than the €280 million the airline had initially anticipated.
The group said that forward bookings for the fourth quarter, which includes the year-end holiday season, were down one to two percentage points compared with 2013. Air France-KLM attributed the fall in September bookings in part to the strike, as well as to a general decline in passenger demand that had already prompted the group to trim its earnings forecast in July.
The combined effect, the airline warned, would most likely reduce 2014 earnings before interest and taxes — the so-called core profit that analysts watch closely — by around €500 million. The group had previously forecast core profit of no more than €2.3 billion this year.
Shares of Air France-KLM were down about 2 percent in Paris.
Analysts said the burden of the additional strike costs would set Air France back at least six months in terms of returning to profit, while the broader group was likely to erase any anticipated net profit for the year.
Given that the winter months are the traditional low season for air travel, “you will not be able to offset these kind of losses before the next summer season,” said Yan Derocles, an airline industry analyst at Oddo Securities in Paris.
Before the strike, Mr. Derocles said he had forecast that Air France would achieve an operating profit this year of slightly more than €200 million, compared with a loss of €174 million in 2013.
News of the strike’s financial impact came hours after Air France management had sought to resume discussions with the French National Union of Airline Pilots over its plans to ramp up the expansion of a low-cost subsidiary, Transavia.
Management had scheduled a meeting late Tuesday with the union, which represents about three-quarters of Air France’s 3,800 pilots, to present its latest proposal for accelerating the development of Transavia in France after having abandoned a broader European expansion of the budget unit in a concession to the pilots.
But those discussions were abruptly canceled after representatives of several smaller pilots’ unions also asked that they be included, said Cédric Leurquin, an airline spokesman. He said a series of “informal consultations” with all union representatives would instead take place over the coming days.
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The pilots’ unions agreed to end their strike on Sept. 28 but stopped short of accepting management’s plans for developing Transavia into a leading European budget carrier.
The pilots remain concerned that the plan — which involves investment of up to €1 billion in new planes and the hiring of 250 new pilots — will eventually lead to lower wages and longer working hours for the group’s French pilots. Air France pilots fly significantly fewer hours per year than the maximum allowed under European regulations.
In a bid to ease those fears, Air France-KLM dropped a central element of its strategy that would have based up to one-third of Transavia’s new planes and employees in lower-wage European countries like Portugal.