Air France-KLM Unveils Plan For Cost-Cutting
Air France-KLM said on Friday it planned to introduce major new cost-cutting measures as Europe's weak economy thwarts efforts to turn around its medium-haul and cargo businesses.
The airline said the plan would include voluntary departures as well as industrial and commercial initiatives.
Air France-KLM had already renegotiated pay and conditions with airline staff, cutting 5,122 jobs and restructuring its network to cope with high fuel costs, a worsening cargo business and tough competition from Gulf and low-cost carriers.
"The measures already taken have enabled medium-haul and cargo to improve their operating results but not sufficiently in view of the weak economic conditions," it said in a statement.
The airline said it aimed to improve its operating result in the second half in line with the first and reduce its net debt by year-end.
Air France-KLM posted an operating profit of EUR€79 million (USD$104.56 million), reversing last year's loss, helped by lower fuel bills and staff costs.
Revenue rose 1.2 percent to EUR€6.58 billion in the three months to June 30, a level described by the company as "below target at this stage".