Air France-KLM to cut 5,000 jobs

Air France-KLM to cut 5,000 jobs

Air France-KLM to cut 5,000 jobs

Air France CEO Alexandre de Juniac. ABACA PRESS photo

Hurt by the global slowdown and fluctuations on the oil prices, many aviation companies are continue announcing pessimistic data and job cuts. Air France-KLM, the struggling Franco-Dutch airline group, is looking to cut 5,000 jobs over three years, with about half through voluntary payoffs, French daily Le Figaro reported yesterday.

According to the newspaper, Air France-KLM management is counting on 800 people leaving the company through normal attrition, but will also open a voluntary buyout offer for all personnel, including pilots.

Another French news media, La, said the buyout offer would affect 2,500 to 3,000 jobs.
However an Air France-KLM spokesman said negotiations with labor unions to find ways to reduce costs were still underway and no announcement on jobs was expected until the end of June.

“The economic situation at Air France is worrying, notably because of a significant lack of competitivity,” the spokesman told Agence France-Presse.

“But a reform plan intended to regain competitively by 2015 continues at management level as well as with the worker representatives management is currently in discussion.” On Thursday Air France-KLM chief executive Alexandre de Juniac is due to report progress made on a three-year turnaround strategy announced in January.

 The cost-cutting plan, including wage freezes and investment reductions, aims at saving at least two billion euros ($2.6 billion) and reducing debt.

Air France-KLM aims to reduce its net debt by two billion euros to about 4.5 billion euros by the end of 2014.

Europe’s biggest budget airline Ryanair, meanwhile, posted a record annual profit yesterday but warned surging fuel costs and worsening economic outlook in Europe meant profits were likely to fall in the coming year for the first time since 2009.

The Dublin-based airline also confirmed it would pay out 483 million euros ($614.5 million) to shareholders in just its second dividend payout since floating in 1997.

Ryanair posted a net profit of 503 million euros for the year to March. But it warned worsening economic conditions in Europe and stubbornly high fuel costs would cut its profit to between 400 million and 440 million euros in the 2013, making it the first year since 2009 that profit has fallen.

Still yesterday, Australia’s Qantas Australian flag carrier Qantas said it will axe 500 jobs in its heavy maintenance and engineering operations as part of a restructuring to help slash costs.

The move follows an 83 percent slump in first-half net profit in the six months to December and an announcement it would delay the delivery of two A380 superjumbos by three years as part of spending cuts.

In the reorganization, Qantas will cease heavy maintenance at Tullamarine in Melbourne by August, with work being consolidated in Avalon, another facility near the Victorian state capital, and Brisbane.