Air France-KLM is to offer 400 ground staff voluntary redundancy following poor Q1 performance. The airline group is looking to take the action following a 303 million euro loss. The move would affect ground staff at French airports and will be presented in a week’s time.
The Air France-KLM Group employs around 84,700 as of December 2018. Throughout the course of 2018 the group turned a profit, with a net income of €411 million. This was up from the previous year. However, things appear to have hit a buffer as Q1 has been a poor performer for the group.
A tough year
The past year or so has been tough for a number of airlines. The driving factor behind this has largely been the ever-rising cost of aviation fuel. While prices actually dropped between October and December, they have steadily risen, now sitting at just 4% lower than a year ago. However, the price has risen 3.1% in the past month according to the IATA Jet Fuel Price Monitor.
According to Aviation Analysis website Skift, The group’s overall revenue rose by 3.1% to €6 billion. However, with rising costs, the amount required to turn a profit also rose. Indeed, the group’s fuel bill alone cost a staggering €1.2 billion, up 13.2%.
New fuel-efficient planes
Along with a number of world airlines, the Air France-KLM group is set to welcome a number of newer, more fuel-efficient aircraft over the coming years. Indeed, we recently saw one of KLM’s ageing Boeing 747 aircraft retired to become a hotel centrepiece. Additionally, slowly but surely, Air France is said to be in the process of retiring some of their older aircraft too.
In order to replace these aircraft, Air France is set to begin receiving brand new Airbus A350-900 aircraft. While KLM had been earmarked to receive a number of these aircraft, they are now all destined for Air France. Instead, KLM will take the remaining Boeing 787 aircraft which were due to be delivered to Air France.
Cutting staff numbers
It is thought that Air France-KLM will be cutting around 600 staff should they get their way. The bulk of cuts seem to be focused on the Air France portion of the business. Reuters reports that the group will seek to offer 400 ground-based staff voluntary retirement. The group is set to present this offer to unions on the 13th March.
It has been additionally reported that a further 200 roles are set to be cut. However, these additional cuts will be comprised of staff who are already departing the airline. The difference being that they simply won’t be replaced by new employees.
An Air France representative declined to give further details to Reuters, however, did state that the group is looking to hire an additional 1,000 employees over the course of the year.
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