After Air France-KLM received the sum of
7 billion euros ($7.9 billion) bailout from France and another 4 billion ($4.5 billion) from the Netherlands, coupled with France warning that, they won't tolerate mass layoffs at Air France-KLM. The airline is set to slash at least six thousand jobs.
The Air France-KLM board was brought together on Wednesday by president Anne-Marie Couderc and CEO Benjamin Smith, where it announced a record loss of €1.8 billion ($2.01 billion) in the first quarter of the year.
It was reported that Air France-KLM is paying not only for the stupendous collapse of its revenues, because most of its planes are stuck on the ground, but also for the low price of crude oil. It was resolved to buy kerosene in advance at a price different from the market price after the collapse of oil markets due to the pandemic. Now it remained unused, leaving a €500 million hole in the corporation’s bottom line.
The very slow come back of air traffic is not helping Air France-KLM because its flights to America, Asia and Africa are the most profitable but they are not generating revenue as a result of the European Union’s (EU) Schengen zone borders closure. The company also anticipates more losses in coming quarters.
Cuts in investment from €3.6 billion to €2.4 billion, including cancelling the purchase of three long-range Airbus jets this year has been announced. But the cost-cutting measures will affect jobs the most brutally.
Smith did not announce any specific figures, but he reportedly plans to slash jobs in administrative services and in Air France’s regional flights. Its regional subsidiary Hop is to see the number and volume of flights cut by half. According to a member of management who spoke anonymously, 6,000 to 10,000 jobs may be cut out of 80,000 total.
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