Air France-KLM to Cut 5000 Staff

Air France PlaneAir France-KLM has revealed plans to axe over 5,000 jobs from its French workforce in a bid to return to profitability. The cuts are equivalent to 10% of the Air France workforce and will be achieved through voluntary departures and attrition. The company wants to avoid firing people, it said in a statement.

Recalled Air France-KLM chief executive Jean-Cyril Spinetta said in January that he’s looking for a deal that will deliver over €2 billion in annual savings. He believes this is what’s needed to secure the group’s future for the long-term. Then at a meeting with works council and union representatives near Paris Charles de Gaulle Airport, Air France said that some 5,122 workers would be cut by the end of next year. This number will include 3,410 voluntary departures and 1,712 positions that won’t be refilled after personnel retire. In further detail – the voluntary departures will include 2,056 ground staff, 904 flight attendants and 450 pilots.

The airline added that, if the workforce rejects the plan, current labour accords will be compromised and departures would be forced. Air France chief executive Alexandre de Juniac says that the company is facing a fundamental choice about the future. Their business plan has two goals – 1) ensuring the carrier returns to profitability and 2) serving customers better. There will be no forced departures if they can make the necessary equitably distributed efforts. He is aiming to have agreements signed in the coming days.

CFDT union official Michel Salomon says labour officials may formally accept the proposals at a works council at the end of next month. Including attrition, the cuts mean 3,022 ground workers, 1,506 cabin crew and 594 pilots will be axed. Although he welcomes attempts to avoid layoffs, the cuts are a heavy toll. He expressed concern that the goal of management will be hard to achieve only through voluntary means over a year-and-a-half. He added that he believes it will be difficult in certain parts of the company. Union general secretary Beatrice Lestic noted that, before they come to an agreement, they need assurance that there won’t be any compulsory redundancies until 2015 – unless a major event occurs.

The job cuts at Air France are a blow to the Dutch government, which is fighting a 10% unemployment rate and is planning new legislation to make it tougher for workers to be fired – by making it more expensive. It’s feared by the government and unions that there will be a wave of layoffs from businesses that don’t want to make them during the election period. Labour Minister Michel Sapin says that he supports negotiations between management and unions to save Air France. Management says that if they don’t take action, the company could collapse. This isn’t about profitability, he added.

In addition to these job losses, Air France is revamping its airline operations in an attempt to boost its competitiveness. In May, it revealed that regional operators Airlinair, Brit Air and Regional – all serve smaller cities – will become a single unit. A leisure unit will then be established around Transavia, its discount division, while its short-haul brand will begin to offer a no-frills class. Additionally, sources said earlier this week that the carrier may be considering offloading its stake in Servair, the third biggest inflight caterer in the world; while it may seek investors for its regional CityJet unit.




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