Updated from article originally published on September 15

Air France pilots on Saturday voted to continue striking until at least Friday, extending by another five days a walkout that has forced the airline to cancel more than half its flights over the past week. The point of contention centers on Air France’s stated plans to shift more capacity to its low-fare Transavia subsidiary, whose pilots work for significantly less pay than those of the main airline. The French pilot group demands compensation parity among flight crew for both airlines, something until now management has flatly rejected.

The start of the strike came just three days after Air France-KLM announced its latest “strategic plan” to return the company to financial health. The plan involves several initiatives, including, perhaps most controversially, a renewed emphasis on the European leisure traffic market via Transavia. Dubbed Perform 2020, the plan succeeds Transform 2015, the company’s ongoing productivity effort designed to cut costs by €1 billion.

Now based on two existing companies, Transavia France and Transavia Netherlands, the planned accelerated development of Air France-KLM in the European leisure market would hinge on the creation of several new bases in other European countries. The resulting pan-European operation would require some 100 aircraft and carry more than 20 million passengers annually by 2017. Considering the effects of “ramp-up” costs, the group expects Transavia to turn a profit by the following year. The group estimates the business should contribute an additional €100 million of earnings before interest, text, depreciation, amortization and restructuring charges (EBITDAR) in 2017.

Other points of focus center on growth of the group’s passenger hub business, the creation of a single business unit to further “optimize” point-to-point operations, completion of a cargo repositioning exercise, expansion of its maintenance business and an ongoing drive for productivity and financial discipline.

Medium-term financial targets include a rise in EBITDAR of 8 percent to 10 percent annually until 2017, and adjusted net debt/EBITDAR ratio of below 2.5 starting in 2017.

“Transform 2015 will be completed by the year end having fully delivered on its objective of significantly improving the Group’s competitiveness and delivering a €1 billion-plus reduction in costs,” said Air France-KLM chairman and CEO Alexandre de Juniac in a written statement. “Perform 2020...will be supported by two main levers: growth, which we are looking to capture in a number of areas, and competitiveness combined with financial discipline which should continue to ensure firm foundations for the development of Air France-KLM.”