Air France-KLM to put €1b in Transavia over 5 years

Air France-KLM expects to invest 1 billion euro into budget subsidiary Transavia in the next five years, CEO Alexandre de Juniac said in an interview on Wednesday.

Air France-KLM will present its growth strategy for the period up to 2020 on Thursday. Tansavia plays an important role in the strategy. The subsidiary will become the main holiday carrier within the aviation group and must compete with low cost carriers such as Ryanair and easyJet.

According to De Juniac in the interview published in French newspaper Les Echos, the French branch of Transavia will grow from 14 to 37 aircraft in the next 5 years. This will mean 220 to 250 new jobs for pilots. A prerequisite for the investment in Transavia is that the pilots agree to cost savings.

According to the chief executive, the staff at Air France have built up privileges over the years so that the costs are much higher than at Transavia. De Juniac says that it is not possible to work at Transavia under the terms of Air France without breaking Transavia's neck.

De Juniac went on to say that the threatening strike by Air France Pilots will cost tens of millions of euros. The pilots threaten to stop working between September 15th and 22nd in protest against the new restructuring plan for Air France-KLM.

De Juniac warned the pilot force that resistance can counteract the efforts to turn Air France into a growing an profitable business.