Air France negotiation over pilot unions failed; 2,900 jobs at stake

Ater an unsuccessful negotiation with pilot unions, Air France announced it would cut 2900 jobs.

Air France-KLM is about to cut 2900 jobs after pilot unions disagreed to compromise with the company's settlement. The board had a meeting on Thursday and ordered the management to minimize some of its operations on October 5, BBC reported.

Air France said in a statement that the company decided to restructure plan in order to recover from lost, "Facing the impossibility of reaching an agreement to implement the productivity measures within Air France and restore long-term profitability, the board members consider it essential to introduce an alternative plan and have unanimously agreed to mandate Air France-KLM and Air France Management to carry this out."

The airlines said it will present its new arrangement to the Works Council.

The planned layoff was leaked by a member of the union. In addition, sources said the airline might retire five long-haul planes in the summer and another nine in 2017.

Air France's revenue was hit by its low-cost competitors in the Middle East. More to this, the 14-day strike by its pilots over the budget adjustments in 2014 had lost them €416 million sales.

According to Air France, their pilots cost 25% more than its rivals. The report said Air France will have to continue reducing jobs unless Perform 2020 plan was implemented. That's the plan Air France CEO Alexandre de Juniac had been proposing to French unions. It calls for the cost cutting and expansion of the Transavia, the low-cost airline.

In a news from the Wall Street Journal, Air France wanted to trim down €170 million ($190 million) on its annual cost for the next three years. Prior to that, they requested pilots to fly more hours for the same rate; pilots rejected the airline's request.

However, De Juniac told the Europe 1 radio the decision is not yet final until the unions immediately compromised, "For the moment the negotiations are finished. Now they are finished. But if in the coming weeks the unions come to us with a real plan, and a real desire to negotiate, the door is not closed," cited in Euro News.

Air France struggles due to shrinking euro and the growing number of budget airlines. It appears the company sees job cuts as the only way to survive.