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Air France speeds up job cuts

Air France speeds up job cuts
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Air France-KLM has unveiled plans is to cut more than 5,000 jobs by the end of next year.

It is part of the Franco-Dutch carrier’s effort – announced earlier this year – to slash costs, reduce its debt and return to growth.

The job cuts come as the world’s airline industry is grappling with the need to consolidate because of limited growth prospects, rising costs and the effects of the eurozone debt crisis.

The group’s turnover is forecast to rise to 25.2 billion euros this year from 2011’s 24.3 billion, with net losses trimmed to a still substantial 635 million euros. Last year the company lost 809 million euros.

Air France is facing tough market conditions in its home base of Europe and it has to take into consideration the pro-job policies of France’s new Socialist government.

So with these cuts it has pledged to try to avoid forced layoffs by encouraging early retirement, voluntary departures, part-time working and work-sharing.

The timetable for reducing the payroll has been sped up. Originally it was to be until the end of 2014.

The change was criticised by unions. A spokesman for the airline said it was because of “economic uncertainty”.

French Labour Minister Michel Sapin, who has said the government’s aim was to “make layoffs so expensive for companies that it’s not worth it”, told Europe 1 radio on Thursday that he supported negotiations between management and unions to save the airline.

“Management is saying that if nothing is done, this great company risks collapsing,” Sapin said. “It’s not ‘if nothing is done the dividends will decline’, it’s not about profitability.”

Sapin said the government was encouraging dialogue between management and unions aimed at returning the company to financial stability without mass layoffs.