Air France-KLM see cargo capacity slowdown while loss widens

Having posted poor first-quarter results on Friday, Air France-KLM now plans to propose voluntary redundancies for almost 400 ground staff at airports across France, La Tribune and Reuters report.

The airline group blamed its €303 million Q1 operating loss – more than double the loss in the same period last year – on higher fuel costs and price competition. Unit revenues fell 1.9% because of a late Easter and substantial winter capacity growth in Europe, the group said.

Its fuel bill came in at €1.2 billion, up €140 million, of which €44 million consists of a rise in the fuel price and €34 million by capacity increases. Fuel hedges provided a gain of €35 million. Passenger numbers grew by 3% on a load factor down 0.3 percentage points, while net debt declined by €403 million to €5.8 billion.

Air France-KLM Group preparing redundancy plan announcement

The group will present the new redundancy plan at a union and management meeting on May 13, according to La Tribune. Besides the 400 redundancies, another 200 departing staff will not be replaced.

However, while an Air France spokesman confirmed to Reuters that a voluntary plan to cut short-haul ground staff was planned, he also said that a company review had also suggested a need to hire more than 1,000 people this year.

Under new leadership, the group is trying to raise efficiency partly through synergies in the Air France and KLM networks. But Reuters writes that this is being complicated by the Dutch government becoming a major shareholder as it seeks to preserve the autonomy of KLM, the more profitable part of the partnership.