Air France likes to present itself as a cut above other European airlines. Offering fancy French food and free champagne in economy class on long-haul flights, the company's strategy is to justify its high ticket prices by offering a premium service.

But facing intransigent unions at home and competition from abroad, the airline's financial fizz is rapidly going flat.

A drawn-out fight with its unions has toppled the boss of its parent group, Air France-KLM, yet again. On May 4, Jean-Marc Janaillac, its chief executive, resigned after its workers voted against a pay rise of 7 percent over four years. His predecessor, Alexandre de Juniac, left two years ago after two executives had their shirts violently ripped off by a mob of angry workers over a restructuring plan.

The latest resignation is more serious because investors are also losing their patience. Air France-KLM's shares have halved in value since January; over the same period those of rival carriers such as IAG and Ryanair have risen.

Air France's trade unions are demanding an immediate pay rise of 5.1 percent. That looks bearable set against profits of $1.8 billion last year. But a decent-looking performance in 2017 owed much to low oil prices. Janaillac had warned of a big drop in profits this year. A series of 14 one-day strikes has already cost Air France at least $360 million in recent weeks.

The threat of Air France's inflated cost base swelling further scares investors, said Daniel Roeska of Bernstein, a research firm. Some Air France pilots may earn two to three times as much as those at Europe's biggest low-cost carrier, Ryanair. Since 2012, Air France has made much less money than its rivals.

Rising fuel costs, only half of which are hedged, and a squeeze on fares caused by airline overcapacity in Europe threaten to plunge Air France into the red sooner than its peers. A huge debt pile also leaves the group looking vulnerable.

Other flag-carriers across Europe have also been squeezed, on short-haul routes by the rise of low-cost outfits, and on long-haul routes by carriers from the Middle East and China. But their answer has been to slash costs to return to the black. IAG has forced through big cuts to jobs and pay at British Airways and Iberia of Spain, as has Lufthansa in Germany. Facing intransigent unions, Alan Joyce of Qantas in Australia even grounded his airline until they caved in. All have launched their own low-cost carriers to take the fight to their new rivals.

Unable to make much headway against the unions, Air France's management chose another track. After canceling de Juniac's proposed restructuring, Janaillac launched a plan to cover the airline's costs by improving service and by lobbying in Brussels against low-cost and Middle Eastern competitors.

Neither will save the airline in the long run, said Andrew Charlton of Aviation Advocacy, a consultancy based in Geneva. Most fliers these days choose airlines on price, using comparison websites, and not on service.

The need to deal with the unions and revamp the airline's strategy at the same time means that replacing Janaillac — who was supposedly an expert in dealing with difficult French unions — is like finding the "impossible man," reckoned Roeska. But whoever it is will at least have support from the French state, which owns 14.3 percent of the airline.

The group is unlikely to go bust. Air France is propped up by profits at KLM, whose unions have compromised on pay. But the government wants Air France to be firm with its unions, partly to thwart opposition to reforms it is pushing through elsewhere. It is already in a fierce battle with the rail unions over President Emmanuel Macron's flagship reforms and does not want to budge an inch in this confrontation. Fliers and investors in Air France should brace for more strikes.