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Business

Air France to axe 5,000 jobs by 2014

Text by News Wires

Latest update : 2012-06-21

Air France announced Thursday plans to shed more than 5,000 jobs, about 10 percent of its workforce, by 2014. The struggling Franco-Dutch airline, which posted an €809 million loss in 2011, said all departures would be voluntary.

AFP - French airline Air France said Thursday it is to cut over 5,000 jobs or around 10 percent of its workforce in voluntary departures by 2014.

A total of 5,122 jobs will be shed and the struggling carrier said in a statement that all departures would be voluntary provided a new framework agreement can be signed with unions.

"Air France has chosen to work in complete transparency and to privilege social dialogue to find structural and sustainable solutions, included in corporate agreements," it said.

If new framework agreements are signed by staff then "Air France has pledged not to make redundancies and to implement various measures to support the necessary reduction in staff numbers," it said.

The struggling Franco-Dutch carrier Air France-KLM has launched a major cost-saving programme after posting a loss of 809 million euros ($1.0 billion) for 2011 and a first quarter net loss in 2012 of 368 million euros.

Shares in Air France-KLM shot up by 6.0 percent after the job cuts announcement.

The company said that the new framework agreement is "a major condition of the company's recovery" and the carrier needs to increase economic efficiency by 20 percent by the end of 2014.

Air France said the Central Works Council would have draft agreements for signing by unions on June 28.

"If the agreements are signed, the accompanying measures to reduce staff numbers will exclude the use of forced departures before the end of 2013," Air France said.

The efficacy of the plan will be evaluated in the second half of 2013 and if the 20 percent improvement is achieved "the use of forced departures will also be avoided in 2014," the company said.

If the agreements are not signed then the improved efficiency would be achieved "in a much more economically constrained context."

"Given the impact of the necessary reductions in activity and routes closures, forced departures may therefore not be avoidable," Air France said.

Air France CEO Alexandre de Juniac said that "Air France is facing a fundamental choice about its future."

"Our business plan has two ambitions: to ensure Air France returns to profitability and to better serve our customers. If we all make the necessary equitably distributed efforts, there will be no forced departures," he said.
 

Date created : 2012-06-21

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