Air France-KLM is opening talks with its French unions on workforce cuts, Chief Executive Ben Smith told Reuters, as the airline group warned of mounting losses with no clear end in sight to the coronavirus crisis.
But under Smith, who joined in 2018 from Air Canada, the Franco-Dutch group had struck productivity deals with its French pilots and begun to cut unit costs, a key aviation metric.
“So far he has done OK at keeping the unions onside,” aviation consultant John Strickland said. “The question is whether he can build on that and convince them to go as far as possible.” Besides its powerful unions, Air France-KLM must answer to the French and Dutch governments, which each own close to 14% of the group and have pledged up to 11 billion euros in rescue aid. Air France employs some 45,000 workers to KLM’s 35,000.
“There are a lot of people that are close to retirement, so we have that advantage,” he said. “In France you go to the GPEC, you explain the situation, you negotiate it with the unions and you put it into place - you don’t just come out and say, ‘I want to cut a thousand jobs.’”
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