Air France Readies Plan for 8,300 Voluntary Job Cuts

Air France plans to offer about 8,300 staff incentives to leave the airline, in a bid to cut costs without stirring a political backlash after receiving a massive state bailout, people familiar with the proposal said.

The Air France-KLM unit will seek the voluntary exit of around 300 pilots, 2,000 cabin crew and 6,000 ground staff, according to the people, who asked not to be named because the plans aren’t public. The cuts could affect 17% of workers, though that may change after union and management talks, they said.

A spokeswoman for the Paris-based company declined to comment.

Europe’s second-biggest airline is preparing to unveil the plan in coming weeks as part of a strategic review ordered by Chief Executive Officer Ben Smith. The cuts will add to thousands of jobs on the line in the sector in Europe. British Airways created a political firestorm with moves to scrap 12,000 posts, while Deutsche Lufthansa AG may have 22,000 surplus staff as it shrinks operations.

Air France-KLM is seeking to offload workers after receiving a 7 billion-euro ($7.9 billion) bailout from the French government, including direct loans and state-backed commercial funding. Under terms of the rescue the French business, which employs 46,000 people, agreed to a 40% cut in domestic capacity by the end of next year and a lowering of carbon emissions.

At the same time, Smith is under pressure to avoid enforced dismissals, with Junior Transport Minister Jean-Baptiste Djebbari saying Wednesday that the domestic revamp can be achieved “without social suffering” and should include voluntary departures. French carmaker Renault SA, which also accepted help, has been at the center of a storm over moves for similar cuts.

The carrier’s KLM arm is in talks about a Dutch bailout of up to 4 billion euros and has already put in place a voluntary departure plan, Smith said last month. He indicated then that a “similar project” was under discussion at Air France and would also encourage staff to move to Paris from the provinces.

Still, the French division lost 200 million euros in 2019 and Smith has warned that a voluntary scheme may not be enough to turn round a brand he says needs an “accelerated overhaul” to meet tougher environmental targets and reach break-even next year.