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Air France to Cut 5,000 Jobs; Restructure Short-Haul Flights

June 22, 2012

We recently posted several new developments at Air France-KLM, but even we were surprised by yesterday's announcement that Air France would be cutting more than 5,000 jobs in an effort to remain financially viable.

According to a statement, at the end of June, Air France will present new framework agreements for signing by the various professional organizations. If they are signed, the airline has pledged not to make redundancies and to implement various measures to support the necessary reduction in staff numbers.

As Reuters notes, the cuts at the French flag carrier reflect industry-wide problems. The world's airlines are struggling with limited growth prospects, rising costs and fallout from the euro zone debt crisis.

To try to minimize the impact of the job cuts on a workforce of 70,000, partially state-owned Air France has promised to avoid forced layoffs, encouraging early retirement, voluntary departures, part-time working and work-sharing.

But the airline said forced redundancies would be unavoidable if unions refused to support management's plans. The job losses will be made by the end of next year.

Ironically, France's new Socialist government, in place since last month, has pledged to counter rising unemployment by making it prohibitively expensive for companies to lay off workers.

The airline's short- and medium-haul activity will also be restructured. By grouping together the operations of Airlinair, Brit Air and Regional within a new regional hub, the airline is hoping to cut costs by 15 percent and expand service throughout Europe. Air France is also looking to develop its subsidiary Transavia France, which will increase the frequency of its existing flights as of 2013 and will operate new routes from Paris-Orly, Lille, Lyon and Nantes. No Air France routes or frequencies will be transferred to Transavia France.

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