Earlier in September, Air France pilots went on strike for two weeks due to a contract dispute, leading to the cancellation of about half of Air France flights and hundreds of millions of Euros in losses for the carrier, the biggest in France and 3rd largest in Europe. Despite the loss in productivity and economic surplus resulting from said strike, Air France’s loss in profits have translated into a huge gain for British discount carrier EasyJet, which reported that the Air France strike has led to a 5 million pound (approx. 9 million CAD) increase in revenue, as well as a higher percentage of seats sold on each flight, which should drive down the price per seat as the marginal cost of fuel declines. The restricted supply of flights caused by Air France cancellations can be seen as a temporary partial exit of the European flight market by the carrier, which as stated above is one of the “Big Three” in European air travel along with German carrier Lufthansa and Irish Carrier Ryanair. Given that consumer demand for air travel would remain constant in spite of this decreased supply, it follows logically that EasyJet would enjoy a surge in demand for their lower-priced flights as competition declines between the big three carriers in Air France’s absence. The question now is whether or not EasyJet can sustain its gain in market share after the Air France return, and how much of an effect the strike will have on Air France’s annual profits.

http://www.cbc.ca/news/business/air-france-strike-wipes-out-more-than-half-its-global-flights-today-1.2766241

http://en.wikipedia.org/wiki/List_of_largest_airlines_in_Europe