Air France to axe 5,000 jobs

It is no coincidence that Air France has announced it will cut more than 5,000 jobs – about 10 per cent of its workforce – by end 2013 to reduce costs, on the heel of the grim message delivered by the International Air Transport Association (Iata) at its recent annual summit in Beijing that more airlines would go bust this year.

European carriers are most vulnerable in light of the continuing Eurozone crisis. Earlier in the year, Spanish carrier Spanair and Hungary’s Malev went bust.

Other airlines that have previously made similar moves include Qantas, whose restructuring of its maintenance and catering divisions will render 500 positions redundant, and the number could be higher.

It is interesting how Air France chief Alexandre de Juniac prefaced the move with the following statement: “Air France is facing a fundamental choice about its future. Our business plan has two ambitions: to ensure Air France returns to profitability and to better serve our customers.”

Staff retrenchment is a bitter pill to take, and in many countries this may meet with industrial unrest. So customers share in the attribution. How exactly will they benefit? It would be good to know.

Perhaps Mr de Juniac has a point there. While airlines should be managing their costs with discipline no lesser in good than in difficult times, the worst thing to happen is when they are clutching at straws, loyal customers are switching allegiance.