Another Airline To Cut Thousands of Jobs, Says They'll Be 'Voluntary Departures'

Air France layoffs job cutsFrench carrier Air France unveiled plans to cut more than 5,000 jobs by the end of next year. It's part of an effort to slash costs and debt, and to return to growth in the face of tough market conditions in Europe and political pressure at home. The job cuts come as the world's airline industry grapples with the need to consolidate because of limited growth prospects, rising costs and the effects of the eurozone debt crisis.

Air France, under the watchful eye of France's new Socialist government, pledged to try to avoid forced layoffs by encouraging early retirement, voluntary departures, part-time schedules and work-sharing.

But the carrier warned that forced redundancies would be "unavoidable" if unions refused to support management's plans.

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"Air France is facing a fundamental choice about its future," Air France Chief Executive Alexandre de Juniac said in a statement on Thursday, when he was meeting with the airline's works council. "If we all make the necessary equitably distributed efforts, there will be no forced departures."

Air France-KLM and Europe's other leading legacy carriers have been confronting losses in their short-haul operations as Europe's economy has taken a battering, leading to a wave of painful contract negotiations.

The Franco-Dutch group unveiled a three-year plan in January, fleshed out last month, to reduce debt and operating costs by 2 billion euros ($2.54 billion) in an effort to return to break-even in 2014.

It has said that its labor contracts stand in the way of heading off growing competition from low-cost carriers, including Britain's easyJet, and a historic fuel bill which is set to rise by 1 billion euros in 2012.

Global airline leaders meeting in Beijing earlier this month stuck to their overall profit forecast for 2012, but the industry is braced for Europe's debt crisis to worsen and wipe out the benefit of recently cheaper oil.

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The International Air Transport Association only expects growth in North and South America this year, and there are concerns that cargo traffic might take a hit from the European crisis spilling over.

German rival Lufthansa announced last month that it was slashing 3,500 administrative jobs around the world as it tries to offset soaring fuel costs and fierce competition in Europe in order to return to profitability.


France Braces

The Air France job cuts also come as France's new president, Francois Hollande, has pledged to clamp down on layoffs with plans to ramp up the cost for companies of shedding staff. At 10 percent, the French jobless rate has hit the highest level in this century.

The government and unions are bracing for a wave of layoffs now that presidential and legislative elections are over, fearing companies had put off job cuts until after the election period.

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Labor Minister Michel Sapin, who has said the government's aim was to "make layoffs so expensive for companies that it's not worth it," told Europe 1 radio on Thursday that he supported negotiations between management and unions to save the airline.

"Management is saying that if nothing is done, this great company risks collapsing," Sapin said. "It's not 'If nothing is done the dividends will decline,' it's not about profitability."

Sapin said the government was encouraging dialogue between management and unions aimed at returning the company to financial stability without mass layoffs.


(Reporting by James Regan; editing by Lionel Laurent and Hans-Juergen Peters.)


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17 Comments

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gene

The new Socialist government will 'clamp down on layoffs' by imposing hefty fines. So the price of a ticket will go up and fewer people will use Air France. What a great solution, Mr. Socialist President. Maybe the French can take a cue from our own Socialist in charge and float a stimulus---Oh, that failed too... BTW, the price of oil has dropped below $79 / barrel; why are fuel cost still 'soaring'?

June 23 2012 at 8:01 AM Report abuse rate up rate down Reply
mieldebebe

They are not eliminating the jobs. They are outsourcing them. From now on your plane will be remotely flown by Haji using a joystick on his home computer in Bangladesh. Profits should soar by 200% while crashes are projected to rise only 27%.

Even in France they have Corporate America.

June 23 2012 at 2:19 AM Report abuse +2 rate up rate down Reply
Billy

Isnt socialism great.?? You get to share jobs and share paychecks, and get free health care, and you only have to pay 70% on taxes.!!!

June 22 2012 at 11:56 PM Report abuse +1 rate up rate down Reply
1 reply to Billy's comment
mieldebebe

Yes, but in exchange you get french women. Trust me .... that is worth your entire paycheck! I LOVE THE FRENCH!!!!

June 23 2012 at 2:21 AM Report abuse rate up rate down Reply
michaelc2b

Airlines are so out of hand with their prices and added fees.

June 22 2012 at 7:23 PM Report abuse +1 rate up rate down Reply
1 reply to michaelc2b's comment
mieldebebe

Yes, but maybe they can give you a discount now that nobody is flying your plane, serving you drinks or putting your luggage in the cargo pit.

June 23 2012 at 2:22 AM Report abuse rate up rate down Reply
jlm9

If airlines treated it's customers fairy..if they had honest fares..if they made air travel inviting, they just might increase their numbers and bottom line..Instead, they nickle and dime everyone, making a decent priced flight skyrocket..no amenities flying or else you are a multi thousand dollar first class customer..they think they are going to make up their money..instead, they will lose more..Like gasoline..people are not using it so much..the price has gone down..oh, not airline fuel surcharges, that are as high as the fare itself..reason to not fly..

June 22 2012 at 7:14 PM Report abuse rate up rate down Reply
1 reply to jlm9's comment
mieldebebe

The reason airlines have to nickel and dime you is because they get quartered and fifty cent pieced by the unions.

June 23 2012 at 2:28 AM Report abuse rate up rate down Reply
Mike

Hard to let people go in France. Unions get all wound up about it. "Voluntary departures" probably means a year or two in severance payments. Love the comment from the new Pres, punishing the airline for cost cutting....that's how their government will work. Save a few jobs and have the whole company (or country) collapse. Needs of the few outweigh the needs of the many.

June 22 2012 at 6:14 PM Report abuse rate up rate down Reply
eurocardriver000

With all their fee hikes and profits???? WTF !!!! HELLO !!!! Greedy Bastards !!!!! ******* Company !!

June 22 2012 at 5:04 PM Report abuse -1 rate up rate down Reply
guntherpotbelly

I always knew socialist were complete morons but then I read this: "The Air France job cuts also come as France's new president, Francois Hollande, has pledged to clamp down on layoffs with plans to ramp up the cost for companies of shedding staff." Ok so Air France is hemoraging money, to stop the bleeding they are going to lay off staff. Hollande is then going to penalize the company for trying to become profitable by its own devices. And for extra kicks, Air France is hoping for help from the unions? (hysterical laughter) Time Air France fastened their seat belt, put their tray table up, assume the crash position and kiss their derrie air goodbye.

June 22 2012 at 4:58 PM Report abuse rate up rate down Reply
Pinot Man

HEY OBUMA, NEED MORE PROFF THAT YOUR PRIVATE SECTOR ECONOMY IS DOING SO GREAT?HOW MANY JOBS WILL BE CUT NOW?? CHICAGO COMMUNITY ORGANIZERS NEED YOU MORE THAN AMERICA,PLEASE GO BACK

June 22 2012 at 4:44 PM Report abuse +1 rate up rate down Reply
1 reply to Pinot Man's comment
mieldebebe

Ummmmm. These jobs were cut by a french airline .... in like, FRANCE! [hint: that's on the other side of the Atlantic ocean]

June 23 2012 at 2:30 AM Report abuse -1 rate up rate down Reply
quepoan

OK. Let them start with Air France executives like Juniac taking a temporary (until good times return) cut in pay to save some jobs too. Then they've shown some willingness to share the pain.

June 22 2012 at 3:14 PM Report abuse rate up rate down Reply
1 reply to quepoan's comment
mieldebebe

LOL!!! Fire the leader??? That's what we are trying to do here in America and Democrats are fighting it tooth and nail.

June 23 2012 at 2:31 AM Report abuse rate up rate down Reply

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