May 7, 2020

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Air France’s parent company will enter into talks with French unions on workforce cuts, the carrier’s top executive said on Thursday, as the coronavirus pandemic pummels the airline with spiraling losses.

At a strategic workforce planning meeting in June, the Air France-KLM group is set to discuss future capacity cuts and how those may impact employees, CEO Ben Smith told Reuters. Such events, known as “GPEC” in French,” often signal future layoffs.

The company’s quarterly results may offer some additional clues of what is to come. Amid an operating loss of nearly $880 million, the French airline’s fleet will be cut by 20 percent by next year, the news agency reported, and workforce cuts could reach a similar figure.

As the pandemic prompts concerns of a long travel slump, other airlines have already announced significant job cuts. British Airways, Ryanair, and Virgin Atlantic collectively laid off 18,000 employees, according to Reuters, while Lufthansa’s Austrian branch may reportedly eliminate 1,000 positions.

Its parent company is in talks with Germany, Austria, Switzerland and Belgium about a $10.8 billion aid package. The German economy minister said Thursday he will prevent Lufthansa from being sold out.

Air France’s Smith said his company had “already identified” some opportunities for voluntary layoffs. With lots of employees close to retirement age, he said, Air France could cut some jobs by offering buyout packages.

“In France you go to the GPEC, you explain the situation, you negotiate it with the unions and you put it into place,'” he told Reuters. “You don’t just come out and say, ‘I want to cut a thousand jobs.’”

Besides its powerful unions, the company must also work with French and Dutch governments, who each own about 14 percent of the company. Officials have committed up nearly $12 billion in bailout money to Air France-KLM.



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