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Industryweek 8112 Air France

Hundreds of Layoffs Coming at Air France

Jan. 22, 2015
Despite shedding 8,000 jobs over the past three years, the Air France-KLM group looks set to continue losing money.

PARIS - Air France confirmed Thursday it plans to offer new voluntary departure incentives to 800 ground personnel and cabin crew as the heavily-indebted French airline moves forward with new restructuring measures.

"Air France management will present at a central works council meeting set for the first half of February plans for voluntary departures," the company said.

Union sources added the plans would seek to reduce the number of Air France ground staff by 500 and cabin stewards and stewardesses by 300.

Despite shedding 8,000 jobs over the past three years, the Air France-KLM group looks set to continue losing money.

The Air France-KLM group, which lost 1.8 billion euros in 2013, hasn't turned a profit since 2010. Air France and its subsidiaries employ some 65,000 people.

Further details could come out during the next meeting between Air France management and union leaders on February 5, or when the airline group releases its 2014 results on February 19.

Air France-KLM executives have been hinting that more job cuts were on the way after issuing a profit warning last month.

A strike by Air France pilots last year cost the airline some 400 million euros ($459 million) and drove a spike through management's plans to improve competitiveness by expanding a low-cost unit. 

The company aims to reduce its debt to 4.5 billion euros at the end of 2015, from 6.5 billion at the beginning of 2012. Analysts expect it may adopt other cost saving measures such as delaying purchases of new aircraft.

Air France is also being pressured to drop fuel surcharges from ticket prices as crude oil prices have been halved since June.

"Today the consequential drop in fuel prices no longer justifies the existence of fuel surcharges," Jean-Pierre Mas, president of France's National Union of Travel Agents, told AFP.

"Using this fuel surcharge as a transportation surcharge amounts to price manipulation," he added.   

Copyright Agence France-Presse, 2015

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