Air Transport World

2d 'battle of Verdun'.

Air France brass are convinced that Paris Charles de Gaulle can be turned into one of Europe's great hub airports

One step forward, two-thirds of a step back for Air France. It returned to operating profits in 1996-97, Ffrl6l million, for the first time since 1989, made Ffr2.47 billion in 1997-98 and was headed for an even better 1998-99. Then, its 3,200 pilots staged a 9-day strike before the French-hosted World Cup, at an estimated cost of Ff1 billion in 1998-99 profits.

Of course, many say the airline recovered only because its government owner injected Ffr20 billion in 1994-96. Several rivals said the aid was illegal but failed to get it handed back. Air France could counter that the money was owed to it. Its owner's fear of unions has made a required but difficult restructuring even more agonizing. The years-long trauma meant the airline, according to an official, "for 3-4 years, was clinically dead."

Still, neither Gaullists nor Socialists would have appointed the chairmen they did without wanting some change. First was Bernard Attali, named chairman/CEO in 1988. His hard-nosed approach to cost cuts provoked union uproar and the government abandoned him in 1993.

Next came Christian Blanc. After Attali's experience, Blanc knew he needed employee support to turn Air France into what he termed "a real business," so he engaged in numerous consultations with them. He succeeded, in a French sort of way. Ground staff strikes decreased to 34 in 1995-96 from 212, 195 and 80, respectively, in 1992- 9 3-94. Flight attendants also struck eight times in 1995-96, to protest new working conditions.

Blanc was not afraid to defy convention, though. He hired two outsiders to remake strategy-Stephen Wolf as a consultant and Rakesh Gangwal as executive VP-planning and development. With nothing but contracts and money tying them to Air France, they made decisions previously avoided, concentrating on the Paris Charles de Gaulle Airport hub and introducing new marketing techniques.

The June, 1997, election brought a change in government, with the Socialists having to make deals with the Communists to get themselves elected. But Blanc barreled ahead with a plan to sell a majority of equity to the private sector and require pilots to take stock in return for wage cuts. Communist Transport Minister Jean-Claude Gayssot basically said over his dead body.

So Blanc resigned in the autumn of 1997 (see box, page 67). Many employees became dejected. Many still are. Blanc had raffled them for life in the private sector. An observer moans: "It's terrible having a Communist minister for airlines." After an embarrassing period when several candidates declined to become a sacrificial lamb, Jean-Cyril Spinetta bravely took the job.

Spinetta headed Air Inter in 1990-94, when it was already part-owned by Air France. …

Log in to your account to read this article – and millions more.