Air France to announce job cuts under new restructuring plan

PARIS: Air France-KLM unveiled a revamped restructuring plan on Monday that could lead to 2,900 job losses after pilots for the struggling airline refused to accept a proposal to work longer hours.

Four unions called a strike to coincide with the launch of the plan at a central committee meeting early Monday, which was interrupted when several hundred workers stormed in to the headquarters in Roissy, just outside Paris.

CEO Frederic Gagey made a hasty exit, according to two members of the committee, and the meeting was expected to resume a few hours later.

Air France said before the strike that it did not know how many people were taking part, but insisted all flights would go ahead albeit with "some delays," notably at check-in.

Talks with pilots on an initial restructuring plan broke down last week, prompting management to lay out an "alternative" version involving around the job cuts -- some compulsory, which would be a first for the carrier.

The airline is struggling in the teeth of fierce competition from global rivals and had sought to win pilots' agreement to fly 100 more hours annually for the same salary, a request rejected as an effective pay cut.

Unions blasted management on Friday for pressing ahead with a revised plan after carrying out a "parody" of negotiations.

But the French government, which owns a 17.6-per cent stake, has criticised the pilots, with Prime Minister Manuel Valls denouncing the "hard-line" attitude of pilots.

The dialogue has been "blocked by a minority based on a purely individual concerns," said Finance Minister Michel Sapin on Sunday.

The airline says its alternative plan is designed "to guarantee the economic objectives and the company's future" by sharpening its competitive edge against main European rivals Lufthansa and British Airways-Iberia.

It includes measures such as a 10-per cent reduction of long-haul flights, a delay in its orders for Boeing 787s and reducing its headcount.

Chief executive Alexandre de Juniac insisted Friday he favoured voluntary departures and that forced layoffs would be a case of "last resort".

But Gagey has indicated redundancies are "a possibility" as "otherwise we would not make hoped for progress in terms of productivity".

Union members at Monday's meeting confirmed the plan includes the possibility of firing 300 pilots, 700 air hostesses and stewards, and 1,900 ground staff.

A board source last week indicated the 2,900 figure had been presented as an estimate of overstaffing in 2017 for the airline, which is Europe's largest in terms of traffic and employs 52,000 people.

The company already shed 5,500 posts via voluntary departures between 2012 and 2014 as it battled competition from low-cost carriers and Gulf airlines.

Air France, which merged with Netherlands-based KLM in 2004, is now expected to retire 14 long-haul planes and reduce flights as it seeks to cut costs over two years by 1.8 billion euros.

The French government has backed the board, with Prime Minister Manuel Valls urging pilots to get behind the restructuring plan.

"If Air France does not evolve then it puts itself in danger," Valls said at the weekend.