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UPDATE 1-Air France plans to cut 6,500 jobs by 2022 - sources

Tue, 30th Jun 2020 15:01

(Adds details on cuts)

By Maya Nikolaeva and Caroline Pailliez

PARIS, June 30 (Reuters) - Air France aims to
present a plan to trade unions to cut just over 6,500 jobs over
the next two years, three sources familiar with the matter said
on Tuesday, as the airline grapples with the coronavirus crisis.

France's flagship airline, part of the Air France-KLM group,
is cutting capacity and exiting loss-making domestic routes as
the pandemic hits international travel.

On top of the 6.500 staff cuts - roughly representing just
under 15% of employees such as pilots, ground staff and flight
attendants - an additional 1,000 layoffs would be made at Air
France's "HOP!" airline, one of the three sources said.

BFM TV and Agence France Presse earlier reported 7,500
looming job losses.

Air France declined to comment on its labour plans. It is
expected to hold talks with unions on Friday.

Some 3,500 of the job cuts would come from natural attrition
- such as retirements and not replacing leavers, two of the
sources said.

Under CEO Ben Smith, who joined from Air Canada in 2018, Air
France-KLM has sought to cut costs, improve French labour
relations and overcome governance squabbles between France and
the Netherlands, which each own close to 14% of the group.

Now saddled with 10.4 billion euros in government bailout
debt to cope with the pandemic - including last week's 3.4
billion Dutch contribution - Air France-KLM must now step up
restructuring to stay competitive and independent.

Rivals have moved faster to announce job cuts, with British
Airways planning to axe 12,000 positions and easyJet
4,500, amounting to 30% of their respective workforces.

Lufthansa Group is also cutting the equivalent of
22,000 full-time positions, or 16%.

But a mature staff including many close to retirement should
help Air France meet voluntary redundancy targets, Smith told
Reuters as restructuring talks opened in May.

Ground-based staff are expected to bear the brunt of job
cuts, the sources said.
(Reporting by Maya Nikolaeva, Caroline Pailliez, and Sarah
White, editing by Louise Heavens and Mark Potter)

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