Air France will close several unprofitable lines – Le Figaro

GRAPHICS – The airline will no longer serve four destinations including Kuala Lumpur and Verona. Frequency reductions are also planned in Brazil and Japan. Objective:. Save 80 million euros

Air France launches a new slimming cure. The airline, which announced it a few weeks ago closed its bases in Nice, Toulouse and Marseille, new plans to close unprofitable lines on long and medium-haul destinations. This winter, Air France no longer serve Stavanger (Norway), Verona, Vigo and Kuala Lumpur. Similarly, “reductions in frequencies or modules” are planned on other lines “strongly affected” to Japan, Brazil and Russia, the company said in a statement.

Air France also announced “new external cost reduction initiatives and general purchases.” At the same time, the company will launch “a detailed review of its investment plan” that will result in the early release of a third Airbus A340 in its fleet and a possible postponement of delivery of long-haul aircraft (Airbus A350 and Boeing 787). Objective:. Save 80 million euros

Remove an operating profit of 700 million in 2017

These new savings measures are intended to accelerate the implementation of 2020 Perform The restructuring plan which succeeded last year in Transform 2015. Air France is in a hurry, it’s because the economic environment has further deteriorated. The good news of the first quarter, illustrated by a 1.8% growth in turnover and the operating loss reduction, are undermined by a laborious start of the second quarter. In April and May, unit revenue per passenger excluding currency effects, a key indicator of the performance of airlines, fell by 6%.

Air France wants to immediately redress the hope to achieve its cost reduction target this year. Under Perform 2020 the company expects an annual decline in unit costs of 1.5% per year, or 650 million euros over the period 2015-2017. A total of 1.1 billion euros in savings are planned over the period. An amount to which therefore will add these additional EUR 80 million.

Air France hopes to ultimately generate an operating profit of at least 700 million in 2017. “The environment remains turbulent: the industry is extremely competitive (…) Air France must get to produce a result operation which must allow him both to honor its debt and generate enough money to invest and ensure growth of 2% to 2.5%, “explained Le Figaro early May the company CEO, Frédéric Gagey.

Threats Employment

At this time, Air France is not new announcements of job cuts. But the threat looms. “At the end of September 2015, an update will be made on the economic situation of the company, on the progress of negotiations (…) We will then be able to decide on necessary actions for the future of Air France “warns Frederic Gagey in the release.

Transform 2015 plan has already resulted in the elimination of nearly 8,000 jobs since 2012, not counting the additional 800 positions covered by a new voluntary departure plan announced late January. “We always thought about what the ideal size of the enterprise in terms of staff. Technological changes, changes in activity necessarily lead to developments. If one day we must speak, there is no taboo “, warned the head of the company in May.

Despite the very tense context, Air France did not hesitate to take legal proceedings against its pilots as they did not meet the objectives of increased productivity which they were assigned by the Transform plane 2015. “Air France says to anyone who will listen that the drivers have not made an effort. We deny this statement, “said a spokesman for the SNPL Tuesday on Europe 1.” We have no such company that can look to the future against its pilots, “he warns.