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Business

Air France-KLM announces first loss, plans 2,700 job cuts

Latest update : 2009-05-19

Europe's biggest airline company, Air France-KLM, has announced an annual net loss of 814 million euros, the first since its merger in 2003. The group also plans to cut around 2,700 jobs.

AFP - Air France-KLM, Europe's biggest airline, on Tuesday announced losses of 814 million euros (1.1 billion dollars) for the 2008-2009 fiscal year and said it would have to cut 2,700 jobs.
   
The losses were the first incurred by the French-Dutch group since the 2003 merger of Air France and KLM and the airline's chief executive Pierre-Henri Gourgeon said job cuts were inevitable.
   

Some 2,700 jobs were slashed during 2008 and 2009 and further cuts "on the same scale" were planned for the next financial year, Gourgeon said.
   
To reduce costs, the group "will continue to gradually reduce staff, with a hiring freeze, by resorting to internal professional mobility, by asking staff to take holidays and by developing part-time positions," he added.
   
Financial director Philippe Calavia told journalists that "about 3,000" jobs would be cut.
   
Air France-KLM employs around 104,000 people and has been hit hard by the economic crisis that has affected much of the global airline industry.
   
It posted a 756 million euro profit for the previous financial year.
   
News of the the airline's first loss did not come as a surpise.
   
The company had warned in late March that it expected to end the year with a 200-million-euro operating loss. In the end, that loss reached 129 million euros.
   
The airline has been reeling from a sharp drop in traffic that forced it to scale back services by 4.5 percent for passengers over the ordinarily-busy summer months and 11 percent for cargo.
   
The worst global slump in decades has devastated the airline industry, with passenger numbers plunging more than 11 percent in March compared to a year earlier, according to the International Air Transport Association.

Date created : 2009-05-19

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