Lufthansa, Air France Earnings Poised to Spark More Labor Strife

The gains, while a relief to investors, pose a risk to management moves to win union cooperation for cost-cutting strategies that the carriers are pursuing to counter low-cost competition at home and Middle East rivals on intercontinental routes. Both companies have been hampered by strikes for more than a year as employees protest reorganization measures. Airlines worldwide are poised to report record earnings this year.

“How do we explain to our staff that we need to carry on making big efforts while the group delivers such strong results?” Air France Chief Financial Officer Pierre Riolacci said on a conference call with analysts today. The company “is getting better, but it’s not doing well,” and “that’s what we keep telling our staff.”