Air France warns of job cuts after stand-off with pilots

Fri Oct 2, 2015 9:29am EDT
 
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By Pascale Denis

PARIS (Reuters) - Air France was drawing up plans for thousands of new job cuts and bracing for fresh labor conflict on Friday after a deadline passed for getting an agreement with pilots on proposed productivity improvements.

Chief Executive Alexandre de Juniac warned of "significant" job cuts as the French arm of the Franco-Dutch airline Air France KLM met to discuss a "Plan B" to restructuring proposals that have been backed by the rest of its 64,000 staff.

A union source said de Juniac had told the board the airline was prepared to cut 2,900 jobs as a result of the failure to reach a deal with pilots over its "Perform 2020" plan, the latest in a series of belt-tightening moves sparked by rising competition.

It had set a Sept. 30 deadline to reach agreement on the plan, first unveiled a year ago and recently beefed up by more cost reductions and an investment review.

Air France-KLM had already said on Thursday it would cut back its operations in the next two years in order to "guarantee a long-term future" as the stand-off with pilots continued.

The cuts equate to 4.9 percent of the workforce of Air France or 3.1 percent of the entire Franco-Dutch group, formed from a merger of Air France and KLM in 2004.

Les Echos newspaper said the so-called "attrition" proposals, or Plan B, also called for deferring delivery of four out of the 13 new Boeing 787 Dreamliners it has on order.

Shares in Air France-KLM rose 2.4 percent, outpacing a firmer European market.   Continued...

 
Air France-KLM Chief Executive Officer Alexandre de Juniac attends a news conference in Paris, France, July 24, 2015.    REUTERS/Charles Platiau