Air France to cut 5,000 jobs

Air France announced more than 5,000 job losses under a cost-cutting plan on Thursday, creating a political headache for new President Francois Hollande.   

The cuts at the French flag carrier, part of the loss-making Air France-KLM Group, come as the world's airline industry grapples with limited growth prospects, rising costs and fallout from the euro zone debt crisis.   

But Hollande's Socialist government, in place since last month, has pledged to counter rising unemployment by making it prohibitively expensive for companies to lay off workers.   

To try to minimize the impact of the job cuts on a workforce of 70,000, partially state-owned Air France promised to avoid forced layoffs, encouraging early retirement, voluntary departures, part-time working and work-sharing.   

But it said forced redundancies would be unavoidable if unions refused to support management's plans. The job losses will be made by the end of next year.   

"Air France is facing a fundamental choice about its future," Air France Chief Executive Alexandre de Juniac said in a statement as he met the airline's works council.   

"If we all make the necessary equitably distributed efforts, there will be no forced departures."   

This did little to reassure union leaders who fear Air France could use the threat of wider layoffs to wring concessions from the workforce.   

"Before we come to any agreement, we want an assurance that there will be no compulsory redundancies until 2015, unless there is a major event," said Beatrice Lestic, general secretary of Air France's CFDT union.  

REUTERS