The first reports have come down and they are painful. Air France-KLM reports a 10.5% drop in capacity in the first quarter (-35% in March), representing a net loss of 1.8 billion euros. A fall that will not be curbed immediately despite the help of 7 billion euros from the French State to support the company: the group predicts a collapse of 95% for the second quarter and 80% in the third , according to a press release.

Faced with this unprecedented crisis, the Franco-Dutch air carrier will start talks with its unions on a possible reduction in its workforce, Air France-KLM chief executive Ben Smith told Reuters. Air France is planning a Jobs and Skills Management (GPEC) meeting in June to discuss capacity reductions and their consequences for staff, said Ben Smith.

This type of meeting often foreshadows major layoff plans. Without specifying the extent, Ben Smith said the company had "already identified" possibilities for voluntary departures.

"Many people are nearing retirement age"

In addition to its powerful unions, Air France-KLM is accountable to the French and Dutch governments, which each hold nearly 14% of the capital and have pledged up to 11 billion euros in aid to save the group.

"I believe that Ben Smith is right to pose the subject (of employment) in lucidity and will be able to lead this discussion in a responsible way", declared Thursday the French secretary of state for Transport, Jean-Baptiste Djebbari, on France 2 .

Air France employs around 45,000 people and KLM employs 35,000. The relatively high average age of the French airline's staff should enable them to make the necessary reductions through voluntary departure plans, said Ben Smith, without advancing figures. "Many people are nearing retirement, so we have this advantage," he said. 

The air sector severely affected 

Air transport is one of the economic sectors most severely affected by the coronavirus crisis, in particular due to traffic restrictions and border closings decided all over the world to curb the spread of the virus. On May 3, for example, the number of flights in Europe was 91% lower compared to the same period in 2019, according to the European organization for the safety of air navigation Eurocontrol.

Most companies in the world, nailed to the ground, see their cash melt and since the end of April announcements of social plans follow one another: 12,000 job cuts at British Airways, 5,000 at SAS, 2,000 at Icelandair, 3,000 at Ryanair, 3,450 at United Airlines or 3,000 at Virgin Atlantic.  

Air France-KLM, which resorted to short-time working, more than quintupled its loss in the first quarter compared to the same period of 2019 (-324 million euros). It notably includes 455 million euros in advance purchases of fuel which was ultimately not consumed due to the crisis.

And these results currently reflect only the impact of Covid-19 in March, when the year had "started very well in January and February", commented the group's chief financial officer Frédéric Gagey, during a conference call with journalists.

 With AFP and Reuters 

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