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Air France is back at it…an additional 5000 jobs threatened?

“The company is still hiring too many people…”

The group Air France-KLM could soon announce a new redundancy plan of more than 5,000 people. A credible speculation according to specialists since it would be necessary for the survival of the company. We had evoked such a possibility when AF-KLM mentioned a new challenge incurred by the decrease of its gross operating surplus (EBITDA) in 2014 leading to additional expenses of 200 million euros.

Air France is back at it…an additional 5000 jobs threatened?
2015 is off to a bad start for Air France.

According to the Figaro, the company is preparing for job cuts of 5,000 people.

An information that was dismissed by the management but that actually seems quite credible.

In fact, the company’s financial figures are far from falling within the projected results.

The company announced at the end of 2014 a third warning on results.

It had also specified working on “additional actions to reduce unitary expenses.”

Meaning that this revelation does not really come as a surprise according to specialists.

“It is perfectly probable and even necessary” notes Jean-Louis Baroux, the founder of the APG network.

“The pilot strike gives the company a practical excuse to justify its mediocre financial results.”

A clean-up necessary for survival

According to him, the company is unable to manage its problem with costs and remains less competitive than the competition.

“It should think of ideas to improve its medium-haul and truly differentiate its low-cost products. Which could than allow it to justify its high ticket prices.”

Jean-Louis Baroux believes that an adjustment of the number of employees will be inevitable because the company is still hiring too many people, despite its voluntary redundancy plan in 2011 and 2013 where 8,000 employees left the company.

Air France currently provides jobs to 60,000 people, 96,000 including KLM, for 7 million passengers.

“Look at the company Swiss for example, that makes 16 million passengers travel with 8,000 employees. This seems like a perfectly reasonable ratio.”

An adjustment of the number of employees seems inevitable to Jean-Louis Baroux even though this new announcement won’t sit well with employees.

“I don’t think the company will have new volunteers to leave, unless it tries to up the ante. It will be hard to avoid layoffs based on economic grounds.”

An employment protection plan would be a first for the company but such a move may lead to yet another confrontation with the unions.

“Another strike could be fatal. Just look at what became of the companies that did not accept the reform, like Atitalia…”

Written by Laury-Anne CHOLEZ translated by Joséphine Foucher the 14/01/2015
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