January 22, 2015

Job cuts continue at Air France as another 800 positions are earmarked

It was back in 2012 that Air France-KLM agreed the implementation of Transform 2015 in a bid to return the airline to profitability. At that time 5,100 job cuts were expected to be the solution after fiveyears of running at a loss. The French Government owns a 15.9% stake in the airline and the socialist government at the time were towing a hard line on the wages front. Air France’s wages are some of the highest within European airlines and account for approximately one third of the airline’s outgoings.

In September 2103 Air France announced a further round of job cuts extending to 2,800 jobs, the equivalent to 5% of its workforce. Those areas targeted in Air France were going to predominantly be voluntary departures and from those taking early retirement. At the time Mr. Alexandre de Juniac, Chairman and CEO of Air France-KLM admitted that the plan announced in 2012 had not gone far enough. The 2013 measures — which de Juniac vowed were sufficient — were expected to yield an additional US$534m to US$601m in cost savings by the end of 2014.

Now Air France have announced another 800 job losses, these again predominantly voluntary. In an Air France statement it was said that the voluntary redundancy plan would affect “approximately 800” cabin crew and ground staff, and would be coupled with “wage moderation and productivity efforts.” An Air France spokeswoman refused to supply further details or make comment on the financial targets of the new measures, but they will include revenue and purchasing initiatives. The current cost-cutting exercise also includes a “downwards revision in fleet and capacity growth.” Air France is still expected to take delivery of three Boeing 777s in 2015, but from 2016 onward further deliveries could be delayed. More information is anticipated with the release of Air France-KLM’s full-year results on February 19th.

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