Working time cut at Air France against backdrop of privatisation

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Air France was successfully floated on the stock exchange in February 1999, though the state will remain the majority shareholder. At the same time, an agreement to reduce working time for ground staff proved controversial, leading to strikes among maintenance personnel, while pilots have expressed their dissatisfaction.

The flotation of Air France, the French national airline - described as the "opening up" of the company's capital rather than "privatisation" - was accomplished successfully in February 1999, with the shares being oversubscribed by 1,000%. The issue price of shares was set at FRF 93.15, which was 25%-40% higher than expected. Despite this success, the government declared that the state would remain Air France's majority shareholder, although its holding would decrease progressively from 64% in March 1999 to 53% in March 2003.

This flotation also reflects a compromise reached within the company between the management and its pilots in 1998 (FR9806114F). The agreement provides for pilots ultimately to own 6.8% of the company's capital, in exchange for a FRF 1.29 billion reduction in labour costs. However, the pilots will not be offered a special rate for their share purchases, which is why the spokesperson for one of their main unions, the National Airline Pilots' Union (Syndicat national des pilotes de ligne, SNPL), vehemently criticised the high share price: "we have been taken advantage of to open up the capital, and the great success of this operation is then put forward as justification for the share price. We really feel cheated."

This resentment may be given a new lease of life by a framework agreement on the reduction of working time at Air France reached on 9 January 1999 (FR9901151F), based on the 1998 "Aubry law" introducing the 35-hour working week (FR9806113F). This agreement mainly affects ground staff (35,000 employees) and should enable 4,000 jobs to be created, by moving from a 39-hour week to a 35-hour week with no cut in pay. The agreement has been ratified by the affiliates of four of the main union confederations - CFDT, CFE-CGC, CFTC, and CGT-FO- plus the National Federation of Independent Unions (Union nationale des syndicats autonomes, UNSA).

However, the agreement was not welcomed by maintenance staff, as it also provides for a reduction of the pay premium for night work from 100% (double time) to 89% of the normal hourly wage. A strike was called by several unions, including CGT, the independent SUD-Aérien, and the National Union of Civil Aviation Technical Ground Staff (Syndicat national des mécaniciens au sol de l'aviation civile, SNMSAC). The introduction of a compensatory payment appeared to open the way to a settlement after a three-week strike. However, it is now the turn of the pilots to push the matter of working time.