Air France Warns Of Job Losses After Talks Fail

October 2, 2015

Air France is drawing up plans for thousands of new job cuts and bracing for fresh union conflict after a deadline passed for getting an agreement with pilots on proposed productivity improvements.

Chief executive Alexandre de Juniac warned of "significant" job cuts as the French arm of Air France-KLM met to discuss a "Plan B" to restructuring proposals that have been backed by the rest of its 64,000 staff.

A union source said de Juniac had told the board the airline was prepared to cut 2,900 jobs as a result of the failure to reach a deal with pilots over its "Perform 2020" plan, the latest in a series of cost-cutting moves sparked by rising competition.

It had set a September 30 deadline to reach agreement on the plan, first unveiled a year ago and recently beefed up by further cost reductions and an investment review.

Air France-KLM had already said it would cut back its operations in the next two years in order to "guarantee a long-term future" as the stand-off with pilots continued.

The cuts equate to 4.9 percent of the workforce of Air France or 3.1 percent of the entire Franco-Dutch group.

Les Echos newspaper said the so-called "attrition" proposals, or Plan B, also called for deferring delivery of four out of the 13 Boeing 787 Dreamliners it has on order.

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The stand-off is the latest chapter in long-standing tensions between management and pilots, who staged a 15-day strike last year that cost the airline EUR€500 million.

Air France, like other traditional carriers, faces intense competition from low-cost rivals on regional routes and from Middle East carriers such as Emirates for long-haul passengers.

Prime Minister Manuel Valls on Thursday urged pilots to "make an effort" to reach a deal.

Philippe Evain, head of the main SNPL Air France pilots' union, said it was ready to make new proposals to management.

"Yes we are ready to make new proposals. We are always open to discussions," he told Reuters news agency.

Evain would not say if fresh talks could take place over the weekend and ahead of a workers' committee meeting on Monday.

A spokeswoman for the airline said no new talks were scheduled.

Meanwhile three French unions - the CGT, FO and UNSA - have called on Air France ground staff to hold a strike on October 5 to protest against possible job cuts.

(Reuters)