Toulouse: Air France, already buckling under its most disruptive strike since 1998, faces an escalating battle with pilots threatening to extend their walkout, raising the stakes for management to dig in or risk being swept aside.

While some pilots already vowed to continue their action through 22 September, another group said it will extend its walkout next week unless agreement is reached with management on Thursday or Friday. The airline was flying 42% of scheduled flights on Thursday, the fourth day of strikes, and said it expects to offer 45% of scheduled service on Friday.

Employees are wary to protect privileges they say are under siege from a cost-cutting drive by management eager to reposition the airline against discount carriers. chief executive officer (CEO) Alexandre de Juniac, in the job for a year, has sought to stand his ground, in contrast to his predecessors in the past two decades who were either booted out, quit, or caved in when strikes intensified.

Bernard Attali, CEO of Air France in 1993, was forced by the government—the carrier’s owner at the time—to step down after eight days of strikes. Christian Blanc, who led Air France from 1993 to 1997, quit his job after the French state refused to sell a majority stake in the airline. Jean-Cyril Spinetta, who took over afterward, gave a “very generous" package to pilots following a nine-day strike, said Derocles.

About 60% of Air France pilots have been off the job since Monday to protest plans to expand low-cost operations with flight crews paid less than at the main carrier. On Wednesday, France’s prime minister and economy minister both threw their weight behind the airline, saying French citizens couldn’t understand the reasons for striking.

The strike may undermine efforts by Air France executives to bring costs in line with discount rivals such as EasyJet Plc, the second-biggest airline in France, and Ryanair Holdings Plc. Air France has lost money on brief flights for years and aims to change that by developing a short-haul business through its Transavia leisure unit.

In a letter to pilots, Air France contested an argument that the current project risked moving jobs out of France.

“It’s not a question of moving jobs, or transfer of activities," the carrier said. “We’ve proposed an agreement that would specifically divide activities between Transavia France, Transavia Netherlands and Transavia Europe."

The union says that Air France’s current plan isn’t sufficiently ambitious to allow competition against the likes of EasyJet because it lacks flexibility.

“Air France should create one, global pilot group who can fly with any portion of the airline—Air France or Transavia—to give the airline more agility in responding to competition," said Jean-Louis Barber, president of the SNPL Air France ALPA union.

The dispute is costing the airline €10 million ( 78.6 crore) to €15 million a day in earnings before interest and taxes, Juniac has said. The Air France unit, which lost money last year, may continue to do so this year as the dispute derails a previous plan to be profitable. Bloomberg

Richard Weiss in Frankfurt also contributed to this story.

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