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Air France to slash 7,500 jobs by end-2022, say unions

01 Jul 2020 / 00:46 H.

PARIS: Air France will cut 7,500 jobs by the end of 2022 as part of a cost-cutting drive that has gained new urgency in the wake of the coronavirus pandemic, union sources told AFP yesterday.

The aviation industry has been hammered by the travel restrictions imposed to contain the outbreak, with firms worldwide still uncertain when they will be able to get grounded planes back into the air.

Most of the job cuts will come from non-replacement of retiring workers or voluntary departures, though layoffs have not been excluded, the union sources said ahead of a works council meeting with management on Friday.

Around 6,500 jobs will go at Air France and a further 1,000 at its Hop! regional subsidiary, out of roughly 41,000 full-time equivalent jobs overall.

"The lasting drop in activity and the economic context due to the Covid-19 crisis require the acceleration of Air France's transformation," the airline said when contacted by AFP.

The union sources did not say if jobs would also be cut at KLM, the Dutch component of the Air France-KLM group, which has some 85,000 employees in total.

"We are looking at all tools that will enable an adjustment of the workforce in line with the decline in activity," Air France said.

Air France-KLM posted a loss of €1.8 billion (RM3.74 billion) in the first quarter alone, and has warned it could be years before operations return to pre-coronavirus levels.

Air France has been offered €7 billion in emergency loans from the French state or backed by it, while the Dutch government approved a €3.4 billion package of bailout loans for KLM last week.

The group joins a long list of airlines that have announced job cuts in recent weeks.

Lufthansa is to slash 22,000 jobs, British Airways 12,000, Delta Air Lines 10,000 and Qantas 6,000.

European aircraft maker Airbus is expected to inform unions today that thousands of jobs could be slashed as it restructures operations in a bid to weather the Covid-19 pandemic.

In Stockholm, Scandinavian airline SAS unveiled a plan to raise around 12 billion Swedish kronor (RM5.5 billion) in new funds to deal with the impact of the novel coronavirus.

Supported by the three largest shareholders, including the governments of Sweden and Denmark, will result in a 14.25 billion kronor boost to the airline's equity as it will convert some existing bonds into equity.

SAS said it does not expect demand for travel to return to pre-COVID-19 levels before 2022.

Like many airlines, SAS has been hit hard by the COVID-19 pandemic and announced in mid-March it was temporarily laying off 90 percent of its workforce.

Since then, the company has announced it will be cutting 1,900 full-time positions in Sweden, 1,300 in Norway, and 1,600 in Denmark, accounting for some 40 percent of the company's staff.

In mid-June, SAS said it needed 12.5 billion in new funding as part of its recapitalisation plan, and the government of Sweden said it was ready to inject five billion kronor into the company.

The Danish government also announced it was willing to support the ailing airline but did not give a figure.

Shares in SAS were down more than 10% on the Stockholm stock exchange following the plan's unveiling. – AFP

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