Air France Plans Almost 3,000 Job Cuts After Failed Pilot Talks

• Carrier briefs works council on moves to shrink business
• Savings strategy calls for reduction in fleet, route network

Pierre Plissonnier flees flanked by security.

Air France informed workers that it plans to cut 2,900 jobs and cancel Boeing Co. 787 jetliners to deliver savings blocked by pilots, including the first forced dismissals since the 1990s.

Some 300 cockpit crew could go, together with 900 flight attendants and 1,700 ground staff, Air France told a meeting with its works council Monday, a representative of the UNAC cabin-crew union said. The briefing was interrupted for a period when protesters stormed the room.

The Air France fleet would be reduced by 14 aircraft, UNAC said, with the cancellation of 787 Dreamliners and phasing out of Airbus Group SE A340s, and weaker routes would shut. The unit of Air France-KLM Group indicated there’s scope for compromise if unions propose serious savings measures.

Air France said last week it was planning cuts to jobs, jets and routes after failing to reach a deal with pilots, who had been asked to work more hours for the same pay to help end annual losses that began in 2011. Government ministers had urged the sides to continue talking so that jobs could be saved.

Asia Impact

The changes would require a shrinking of Air France’s network, with a reduction in frequencies and more sweeping seasonal capacity cuts next year, following by the termination of some routes in 2017, especially to Asia, where competition is toughest. Frequencies to 22 destinations would be affected.

Job cuts couldn’t be implemented before mid-December at the earliest, given French legal requirements, leaving about two months for the two sides to agree an alternative way forward, should negotiations resume.

Chief Executive Officer Alexandre de Juniac has forced the showdown with pilots after last year being defeated in plans to establish a low-cost airline outside of France when crews walked out for two weeks, costing the airline 500 million euros ($564 million) and prompting the government to intervene.

Air France has never recently fired workers outright, relying on attrition and early retirement packages to reduce the payroll by 9,000 over three years. The last time it sought to dismiss staff, in 1993, weeks of walkouts cost the job of CEO Bernard Attali.

Source:  http://www.bloomberg.com