Air France cuts 465 jobs amid ‘fierce’ domestic competition

Up to 465 jobs are at risk as Air France trims its domestic capacity by 15% in the face of aggressive pricing by budget rivals and competition from high-speed rail.

The French flag carrier admitted it was suffering from “overstaffing in the short-haul ground operations activities”.

Air France and its employees “have been striving for years to ensure that the company adapts to market conditions and the extremely fierce competition in the sector,” the carrier said.

But the carrier’s financial situation has “deteriorated significantly” on its domestic network, with a loss of €189 million last year, down from, €96 million in 2017. Cumulative losses have amounted to €717 million since 2013.

The airline’s domestic network has been “strongly affected” by competition from high-speed TGV train routes, which have increased their capacity throughout the country, reduced journey times and developed a “very competitive low-cost offer” over the last five years.

The launch of four new high-speed routes in 2016 and 2017 is expected to attract 4.7 million additional passengers by 2020-21.

Air France has lost 90% of its market share where high-speed trains connect Paris to the provinces in under two hours.

At the same time, low-cost airlines have set up bases at major French airports and “have gained ground rapidly with aggressive pricing policies and often with the help of public authorities”.

The airline added: “Unlike Air France, where 90% of staff are based in France, a majority of these airlines have not contributed to developing employment in the regions where they operate, taking advantage of European mobility and basing employees in jurisdictions with lower labour costs.”

As a result, the Air France workforce is to be trimmed over a one-year period as the carrier seeks to cut short-haul capacity by 15% by 2021.

The airline, which has faced strikes by staff when seeking previous cutbacks, said employee unions had been informed that the departures would be voluntary.

“There will be no forced departures,” the airline said. “This project includes personalised support measures for the staff concerned. The measures will be detailed and negotiated with the labour groups during the consultation.”

Air France CEO Anne Rigail said: “Many new talented staff – pilots, flight attendants, mechanics and engineers – will join us in 2019 to support Air France’s growth, but we also have the responsibility to guarantee an even balance of our activities in certain sectors to secure their long-term viability.

“This is the idea behind the project presented for the short-haul sector today.

“We will conduct the consultation process with our labour groups as part of an open and transparent dialogue, and we are committed to supporting all staff who wish to move to a new position or develop their career.”

Benjamin Smith, CEO of parent company Air France-KLM Group, added: “The French domestic network is intricately linked to the history of Air France.

“It guarantees its regional base, and connects the French regions to the rest of the world by offering several thousand daily connection opportunities.

“In a highly competitive marketplace, we are all fully engaged in defending a domestic market that is vital for Air France and also more globally for the Air France-KLM Group.”


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