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UPDATE 2-Air France tells staff of plan to cut 800 jobs-sources
January 22, 2015 / 2:36 PM / 3 years ago

UPDATE 2-Air France tells staff of plan to cut 800 jobs-sources

* Air France to cut 800 jobs

* Move is response to pressure on revenues (Recasts with official Air France confirmation, adds detail)

By Cyril Altmeyer

PARIS, Jan 22 (Reuters) - Air France unveiled plans on Thursday to cut about 800 jobs over three years and reduce fleet and capacity growth in response to declining revenues.

Competition from no-frills European rivals and well-funded Gulf airlines have taken their toll on the business in recent years. A pilots’ strike last year over its own plans to expand in the low-cost sector cost the company up to 500 million euros ($575 million).

Air France said revenues remained under pressure this year.

“The group will have to contend with the weaker unit revenue trend that has developed since the summer of 2014, which requires the implementation of additional measures,” it said in a statement.

The airline met worker representatives on Thursday to present the job cuts, involving 500 ground staff and 300 air stewards and stewardesses, union sources said.

Frederic Gagey, chairman and chief executive of Air France, the main operating subsidiary of Air France KLM, also presented a “salary moderation” plan, the sources said. The company did not provide details of the plan.

Air France is set to make an operating profit of more than 250 million euros ($289 million) in 2015, rising to more than 700 millions in 2017, two separate union sources added.

Air France will present details of its cost-cutting measures to unions to its works council on Feb. 5. and provide an update at its full-year results presentation on Feb.19.

A report in Le Figaro newspaper earlier this month said the company planned about 5,000 job cuts.

Air France has already cut 8,000 jobs in the past three years under a group-wide restructuring plan by the Franco-Dutch group which employs about 95,000 people. ($1 = 0.8648 euros) (Writing by Andrew Callus; Editing by Leigh Thomas and Keith Weir)

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