Air France takes low-cost route
Longer working hours for staff - and aircraft - as airline bids to turn round €560 million loss
AFTER losing €560 million last year, Air France-KLM has launched a new strategy aimed at cutting costs by €2 billion, increasing productivity - and getting rid of nearly one in 10 staff.
The company has made its short and medium-haul routes No1 priority after it lost €700m alone last year due to intense competition from the likes of easyJet and Ryanair on short-haul plus British Airways and Lufthansa on medium-haul routes.
It will ask staff for major increases in productivity and also create three new pôles business units.
At the top will be Air France itself concentrating on flights using Paris Charles-de-Gaulle and linking to its long-distance services. This will include services at the new provincial bases at Marseille, Nice and Toulouse.
Next is a regional unit made up of its subsidiaries Regional, Britair and Airlinair - which may be opened to additional funding from an outside partner.
Third will be the Transavia budget airline, flying out of Orly, which will be expanded from eight aircraft to 20 by 2015-16. It will serve European and Mediterranean destinations, plus regional airports.
Chief executive Alexandre de Juniac said the plan would put Air France “on the path to profitable growth" but would also avoid forced redundancies. This point will be watched closely by President François Hollande, who made saving jobs an election priority.
De Juniac said the company would reveal at the end of June how many jobs it will have to lose under the restructuring - although many sources have put the number at 5,000 from a present staff of 55,000. These are intended to be from voluntary severance and non-replacement of staff.
The company will borrow heavily from low-cost airlines' tactics - including from Transavia, where working hours are longer - to make the plan work.
Each aircraft will do an increased number of flights with an average of an hour a day extra in the air; pilots and aircrew will have to work harder and longer. Le Figaro said the company was looking at 650 hours of work in 120 days for cabin crew as against 530 at present, and 750 hours in 130 days for pilots as against 560 before.
If agreed, Air France says it could cut its fleet of aircraft by 15% by 2014 - meaning getting rid of 34 planes.
Passengers will see a difference, too, with economy fares for those without baggage or choice of seat - these will be included in a more expensive tout compris (all-inclusive) service.
Long-haul services are to be examined and loss-making services will be cut - while at the same time Air France will be investing heavily in its business and first-class services to woo back well-off clients with "world-leading services".
