Air France-KLM goes for further cost cuts

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Air France-KLM goes for further cost cuts

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Air France-KLM has unveiled major new cost-cutting measures.

The airline said they would come in in the Autumn and would include voluntary redundancies as well as what it termed “industrial and commercial initiatives”.

The moves are in response to Europe’s weak economy which is hitting the company’s efforts to turn around its cargo and medium-haul businesses.

This comes on top of previous renegotiations of staff pay and conditions, as well as the cutting of over 5,000 jobs and restructuring its network, to cope with soaring fuel costs and tough competition from Gulf-based and low-cost carriers.

“The measures already taken have enabled medium-haul and cargo to improve their operating results but not sufficiently in view of the weak economic conditions,” it said in a statement.

The airline said it aimed to improve its operating result in the second half in line with the first and reduce its net debt by year-end.

Air France-KLM posted an operating profit of 79 million euros, reversing last year’s loss, helped by lower fuel bills and staff costs.

Revenue rose 1.2 percent to 6.58 billion euros in the three months to June 30, a level described by the company as “below target at this stage”.