Air France pilots dig in despite scrapping of low-cost plans

Striking Air France pilots refused to budge Thursday after management announced it had buried plans to expand its low-cost subsidiary, as their stoppage became the longest ever at Europe's second-largest flag carrier.
The pilots brushed off calls to return to the skies, leaving half the airline's fleet grounded for an 11th day running, as they sought to push management even further at talks Thursday.
Further chaos was likely in European skies after German pilots union Cockpit announced a strike "with immediate effect" at Europe's largest carrier Lufthansa after a breakdown in talks over early retirement provisions.
Air France meanwhile called for pilots to return to work "immediately", to end a dispute that has crippled the airline at a cost of 20 million euros ($25 million) a day.
The airline on Thursday announced the "definitive" scrapping of plans to expand its Transavia Europe subsidiary on the continent, but said it would pursue the development of the low-cost airline in France.
The offer was made to unions after all-night talks Wednesday.
But the main pilots union SNPL said it had made a "counter-offer" that would be discussed as talks resumed Thursday.
Many Air France pilots, who earn up to 250,000 euros a year, are angry at the plans to develop Transavia, which currently serves holiday destinations across Europe and the Mediterranean.
They fear management will eventually seek to replace Air France flights with services operated by Transavia, whose pilots earn considerably less.
- 'Into the red' -
The withdrawal of plans to expand Transavia will come as a blow to the airline's efforts to be more competitive in the crowded and changing European skies, increasingly dominated by no-frills airlines.
The MEDEF employers association said the conflict at Air France -- which is 16 percent state-owned -- encapsulated the malaise gripping the country's crisis-hit economy.
The union action is "again dragging a company into the red," said MEDEF vice-president Jean-Francois Pillard.
"For those who want to invest or travel in France, this does not contribute, at an already extremely difficult time, to improving the image of the country," he said.
Air France has already implemented an ambitious restructuring plan to reduce costs and improve efficiency.
"Low-cost airlines now represent between 25 and 45 percent of air traffic in Europe, depending on the country," said Didier Brechemier, an aviation expert at consultants Roland Berger.
Irish low-cost airline Ryanair will soon expand its fleet to 400, which would take it above Air France's stable of 350 aircraft.
"With competitors like that it's not hard to see why Ryanair is the fastest-growing airline in Europe," company boss Michael O'Leary said of Air France's offer to put expansion plans on ice.
Strike action has also been simmering at Lufthansa as pilots fight a plan by the airline to raise the minimum retirement age and to involve pilots in the financing of their pensions.
"Further industrial action can be expected with immediate effect. The public will be warned in advance," said a statement from Germany's Cockpit union.
- Ball in pilots' court -
French Prime Minister Manuel Valls has warned that the Air France strike was putting the airline's future in danger
Air France said its proposal "allows us to end this destructive conflict" which on Thursday overtook the record for the longest pilots' strike at the airline, of 10 days in 1998.
"With the withdrawal of the Transavia Europe plan, there is no longer any reason to strike because there can be no fear of outsourcing," the airline said in a statement signed by Air France-KLM chief executive Alexandre de Juniac and Air France boss Frederic Gagey.
"We call on the striking pilots to return to work immediately."
The government welcomed Air France's proposal and said it was "now the responsibility of the pilots to end the strike".
While promising to put the European expansion on hold, Air France said it would maintain its plans to develop Transavia France "in competitive economic conditions".
It promised that the project would create more than 1,000 jobs in France, including 250 pilot positions.