Gilbert Sedbon/PARIS

A NEW SERIES OF strikes, trouble with Algeria, and a 1.5% drop in traffic during the first five months of its current financial year to 31 March, 1966, are combing to derail Air France's three-year recovery plan. The twin aims of chairman Christian Blanc -to raise productivity by 30% and limit the deficit this year to Fr1.2 billion ($240 million) - are unlikely to be achieved, new figures show.

Air France cabin crews are protesting against proposed working conditions, and have been joined in sympathy strikes by Air Inter pilots, believed to be the highest- paid in Europe.

Although their action is jeopardising not only Blanc's recovery plan, but also the airline's survival, the workforce believes that the Jacques Chirac administration will not close down the flag carrier.

Terrorist action by Algeria has forced the closure of the Paris-Algiers route, while under-performance on several other routes has cost around Fr1 billion in revenues so far this year.

Withdrawal from some Pacific routes in the coming weeks will further hit revenue generation.

Air France is part of the way through a Fr20 billion Government-aid programme, approved by the European Commission to help the airline restructure.

Fierce competition from independent French and foreign airlines has plunged Air Inter back into the red, after a small Fr20.9 million profit in 1994. After a 6% drop in traffic to date, it expects a Fr400 million deficit by the end of the current financial year.

In an effort to reduce capacity and limit capital expenditure, both airlines have either cancelled aircraft orders, or deferred deliveries to beyond 1998.

Source: Flight International