Air France turbulence may end in a crash landing

World View: Both France and its flagship airline have failed to adjust to global competition

An Air France director, Pierre Plissonnier, climbs a fence to escape the mob (Getty Images)

Where Air France flies, so flies France. The violence at the Air France management-union talks this week is a warning to the country, not just the airline.

Air France’s problems are a microcosm of the difficulties, divisions and evasions of the country whose flag it flies. On Monday, militant Air France mechanics and other ground staff invaded talks on job cuts and tore off the suit jackets and shirts of two senior airline executives. Union officials said that, at one point, they feared the two might be “lynched”.

President François Hollande condemned the violence and warned that such incidents had “serious consequences” for the image of France. Foreign investors, he implied, would divert their suit-wearing executives – and money – to other destinations.

Air France was once one of the world’s great airlines. It is now, in terms of market value, one tenth the size of Ryanair. Even after its merger with KLM 12 years ago, it is one-eighth the size of British Airways/Iberia.

France has – with some notable exceptions – failed to adjust to a global economy. Similarly, Air France has failed to adjust to competition from low-cost carriers and state-subsidised Gulf airlines such as Qatar Airways and Emirates. In both France and Air France there has been a decade or more of mini-reforms. Both have lost ground, not just to the “new” competition but also the “old”.

Efforts to deregulate and kick-start the economy have been resisted for years by corporate interest, from taxi-drivers to property lawyers. Equally, Air France blames new cuts on its 4,000 pilots, who have refused to fly more hours for the same pay. (Air France employs 17 pilots for each aircraft it owns, compared with a world average of 13).

Attempts at labour reform have to operate within a hostile landscape of five or six competing trades union federations with varying degrees of militancy.

French companies find it difficult to compete abroad because of the high cost of payroll taxes which fund healthcare, pensions and unemployment.This burden – typically 40 per cent on top of an employee’s wages – is one reason why Air France labour costs are 25 per cent higher than Lufthansa or BA. These blockages mean that France, with unemployment permanently at 10 per cent, fails to create jobs. Any job losses are all the more painful because workers know that there are so few opportunities elsewhere.

Of the 2,900 job cuts now threatened at Air France – on top of 13,000 jobs lost since 2004 – more than half will fall on ground staff and mechanics. Many of them live in the multi-racial suburbs surrounding Charles de Gaulle and Orly airports, where unemployment is above the national average.

Hence, in part, Monday’s violence. The executives were attacked by a mob of around 100 young and middle-aged men. Most wore stickers from the more militant Force Ouvrière and CGT. Both federations condemned the violence and accused Air France of “inviting” it by security failings.

Latent anger; conspiracy theories; refusal to face the challenges of the 21st century; inadequate reforms leading to more problems and more anger. Those factors will be in play in December when the far-right Front National could take control of two French regional governments. The severe turbulence of today threatens to become a bumpy – or even a crash – landing tomorrow.