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Air France joins the queue to slash jobs
By Steve Rothwell |
February 14, 2009, Saturday
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Print Edition
Print Edition
AIR France-KLM Group, Europe's biggest airline, said yesterday that it will cut as many as 2,000 jobs after lower ticket revenues and dwindling cargo volumes pushed it to a third-quarter loss.
The cuts in the Air France operations will be achieved by natural attrition and no one will be fired, spokesman Nicolas Petteau said. The company had a 505-million-euro (US$653 million) net loss in the three months to December compared to a 139-million-euro profit from the same period a year ago.
Air France-KLM joins British Airways Plc, Ryanair Holdings Plc and Virgin Atlantic Airways Ltd in slashing jobs this week as the industry is buffeted by crumbling demand for air travel.
The Paris-based company will also cut 1.2 billion euros from capital spending and reduce capacity by 2 percent as it targets a positive operating profit in fiscal 2009.
"Activity in the third quarter reflected the increasing severity of the economic downturn," Air France said in a statement. "We will continue to assess all our costs in order to achieve additional savings wherever possible."
Air France-KLM's stock rose 4.6 percent in early trading in Paris, having lost 12 percent this year.
The three-month loss came after cargo traffic declined almost 13 percent and tumbling oil prices compelled the company to reduce fuel surcharges. While passenger traffic increased 3.4 percent in the quarter, it slipped 1.9 percent in January, when the drop in cargo traffic accelerated to 23 percent.
Airlines globally are shedding jobs and routes to help combat losses that may reach US$2.5 billion this year as traffic falls 3 percent, according to the International Air Transport Association.
The cuts in the Air France operations will be achieved by natural attrition and no one will be fired, spokesman Nicolas Petteau said. The company had a 505-million-euro (US$653 million) net loss in the three months to December compared to a 139-million-euro profit from the same period a year ago.
Air France-KLM joins British Airways Plc, Ryanair Holdings Plc and Virgin Atlantic Airways Ltd in slashing jobs this week as the industry is buffeted by crumbling demand for air travel.
The Paris-based company will also cut 1.2 billion euros from capital spending and reduce capacity by 2 percent as it targets a positive operating profit in fiscal 2009.
"Activity in the third quarter reflected the increasing severity of the economic downturn," Air France said in a statement. "We will continue to assess all our costs in order to achieve additional savings wherever possible."
Air France-KLM's stock rose 4.6 percent in early trading in Paris, having lost 12 percent this year.
The three-month loss came after cargo traffic declined almost 13 percent and tumbling oil prices compelled the company to reduce fuel surcharges. While passenger traffic increased 3.4 percent in the quarter, it slipped 1.9 percent in January, when the drop in cargo traffic accelerated to 23 percent.
Airlines globally are shedding jobs and routes to help combat losses that may reach US$2.5 billion this year as traffic falls 3 percent, according to the International Air Transport Association.
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