Air France is set to slash thousands of jobs and scale back long-haul flights as part of a vast cost-cutting programme after it failed to reach an agreement with its pilots over an increase of their working hours, its board announced Thursday.
The cutbacks will include “a reduction of activity by Air France in 2016 and 2017, in order to guarantee the economic objectives and the company’s future”, the board said in a statement, with the full details to be presented to the airline’s central committee Monday.
The airline, part of the Franco-Dutch Air France-KLM group, has previously said it may have to scrap 10 percent of its long-haul network by 2017 as part of the cost-cutting exercise, something unions have estimated will see around 4,000 jobs axed.
The decision by Air France to enact its “Plan B” restructuring programme followed months of fraught negotiations between the airline and its pilots, who last year waged the longest strike in the company’s history.
Under Air France’s initial restructuring plan, designed to make the airline more competitive in the face of increasing international competition, pilots would have been required to spend between 15 and 20 percent more time in the sky but for the same salaries.
Unions have said this is the equivalent to six weeks’ extra work without pay.
But talks to reach an agreement with pilots over the proposals broke down on Wednesday.
“The many hours of talks and negotiations, closely followed by the chairman and CEO of Air France, could not yield, within a reasonable timetable, an agreement insuring the growth and competitiveness of the company,” the airline said.
Air France-KLM is looking to boost its competitive edge against its main European rivals, Lufthansa and British Airways-Iberia.
The company has been struggling financially for some time, showing losses of 619 million euros in the first half of 2015 with an overall debt of around 5.4 billion euros.
French Prime Minister Manuel Valls on Thursday encouraged both sides to return to the negotiating table, while calling on the pilots to show more flexibility.
“Air France is a national company that bears the colours of France and it is facing a challenge to its competitiveness,” he said.
”Everyone must make an effort and of course that starts with the pilots.”
DALLAS (AP) — Southwest Airlines says it has reached an agreement with union negotiators on terms for a new contract with pilots, whose approval would be needed before it takes effect.
Terms weren’t disclosed on Thursday.
Leaders of the Southwest Airlines Pilots’ Association are expected to meet later this month to decide whether to hold a ratification vote. Southwest Vice President Craig Drew says the process is far from complete but the company is pleased to have this agreement.
Southwest has about 8,000 pilots. It’s the nation’s fourth-biggest airline, and 83 percent of its workers are represented by unions, according to a recent regulatory filing.
Shares of Dallas-based Southwest Airlines Co. fell 29 cents to close at $37.43. They have fallen 12 percent this year.