Air France expresses plans of cutting 6,500 workers by 2022 to combat COVID-19
- Air France expresses plans of cutting 6,500 workers by 2022 to combat COVID-19.
- The flagship air carrier of France will cut an additional 1,000 jobs at HOP!
- The Dutch government offers a £3.08 billion bailout package to Air France.
Sources confirmed on Tuesday that Air France (EPA: AF) wishes to discuss a plan with trade unions that will see 6,500 workers laid off in the next 2 years. The airline attributes its plan to the Coronavirus pandemic that brought the demand for air travel to a near halt in recent months and consequently weighed heavily on its performance.
The Air France-KLM Group subsidiary plans on withdrawing from domestic routes that have failed to be profitable. It will also resort to slashing capacity to shore up finances amidst COVID-19.
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Shares of the company posted an intraday decline of 4% on Tuesday. At £3.65 per share, Air France-KLM is currently 60% down year to date in the stock market. Learn more about swing trading.
Air France to cut an additional 1,000 jobs at HOP!
According to Air France, its proposed job cut that represents roughly 15% of its workforce will affect its employees, including pilots, flight attendants, and ground staff. On top of the said layoff, the company also wishes to cut an additional 1,000 jobs at its regional subsidiary, HOP!
Air France declined to divulge any further information at this stage. It is scheduled to hold talks with workers associations on Friday.
Sources also highlighted on Tuesday that roughly 45% of the layoff (3,500 jobs) will comprise of natural attrition including retirements that the air carrier will no longer replace. CEO Ben Smith is working committedly since 2018 to improve French labour relations, cut costs, and settle rows between French and the Netherlands’ government that each currently has an about 14% ownership stake in Air France-KLM.
Dutch government offers a £3.08 billion bailout to Air France
The European Union approved the French government’s £6.35 billion bailout package for Air France-KLM in May. The Dutch government also agreed to offer an additional £3.08 billion bailout package to the airline last week.
Air France, however, is not the only one that has laid out its restructuring plans. Competitors, including British Airways and Lufthansa Group, have also expressed plans of cutting 12,000 and 22,000 jobs respectively. The UK’s low-cost airline, EasyJet, said on Tuesday that it will layoff 700 pilots. In May, it unveiled plans of cutting 4,500 jobs to combat COVID-19.
Air France-KLM performed slightly upbeat in the stock market last year with an annual growth of roughly 10%. At the time of writing, the flagship airline of France has a market cap of £1.57 billion.