Cuts up to save Air France in Europe

Only “drastic” cost cuts will ensure the survival of the short- and mid-haul networks at loss making Air France the carrier has confirmed. Controlled costs would need to fall by as much as 20 per cent the carrier said in a statement earlier, with staff pay and conditions among the top items on the agenda. “Air France will continue to offer short and medium-haul service on the condition of achieving extensive restructuring and a drastic reduction in costs,” read a statement from the company. Air France is the French arm of Franco-Dutch group Air France-KLM. However, recently appointed chief executive Alexandre de Juniac stopped short of announcing politically sensitive job cuts at the carrier. French presidential elections are just under a month away. Air France parent Air France-KLM is 15.8 percent owned by the French government. The carrier said it would develop low-cost unit Transavia and accelerate an overhaul at the freight division, which is suffering from weak demand. “The goal is to return to break-even for point-to-point service in 2013 and for the entire short and medium haul business in 2014,” the airline said.