Air France-KLM seeks to cut staff, French capacity in revamp

Air France-KLM has started talks with unions to reduce staff as part of a restructuring to be unveiled in the coming months -- a plan that also calls for a 40% cut in domestic French capacity by the end of next year. The company’s Dutch arm, KLM, has already set in motion a voluntary departure plan for all employees starting June 1, CEO Ben Smith said Tuesday at an annual general meeting. A “similar project” is under discussion with labor unions at Air France that would also encourage employees to move to Paris from French regions. A voluntary scheme may not be enough to turn around the French division, which will undergo an “accelerated overhaul” to meet tougher environmental targets and reach break-even next year, Smith said. Air France-KLM is reeling from a steep drop in demand from the coronavirus pandemic, and is still in talks with the Dutch government for as much as E4b in loans and guarantees after getting E7b from France. In exchange, Smith has pledged a revamp at Air France that will cut back on domestic flights including on routes served by rail.<br/>