Air France (AF, Paris CDG) management has presented a revised growth plan to the carrier's Central Works Council (CEC) for approval. Under the programme, the French carrier has revised its anticipated return to profitability within the context of its Perform 2020 plan, to 2017.
“Air France’s recovery is continuing and the current buoyant economic situation allows us to offer a return to growth as from 2017. This adaptation of Perform 2020 will be made possible by balanced compromises. Its success depends on our collective responsibility,” Frédéric Gagey, Chairman and CEO of Air France, said.
The plan will see Air France expanding its longhaul network by 2 to 3% annually between 2017 and 2020. To that end, Air France will add seven widebody aircraft to its long-haul fleet, launch one or two new destinations, and increase capacity and flight hours by 10% between 2016 and 2020. According to airline unions, Air France's widebody fleet could entail between 102 and 109 aircraft by 2020 with the entry of up to sixteen new B787-9s and A350-900s.
Other aspects include the stabilization of the carrier's short and medium-haul networks run by its HOP! (France) (A5, Paris CDG) subsidiary, and the continued growth of LCC unit Transavia France (TO, Paris Orly), which will operate up to forty aircraft in 2020.
Against the backdrop of 2014's damaging pilot strike which cost Air France-KLM Royal Dutch Airlines USD530 million in lost quarterly sales, management has called on Air France unions to help increase the carrier's competitiveness by assisting in lowering unit costs by means of a phased schedule. Management has called for social dialogue with pilot and cabin crew unions having ended negotiations with ground-crew unions. Talks with the latter are said to have staved off the need for forced redundancies until June 2018.
Last year, talks concerning proposed layoffs of up to 2,900 staff ended when five executives were assaulted by six Air France Cargo employees. Though management eventually relented, Alexandre de Juniac, the Chairman and CEO of Air France-KLM, warned that while cuts in 2016 would be voluntary, heavier ones could be enforced in 2017 should the sides fail to reach an agreement concerning alternative cost-saving measures.
Aside from labour disputes and strikes, the French carrier has also had to cope with a stagnant local economy and the aftermath of Islamic State-inspired attacks on Paris during the course of 2015. Air France-KLM said it suffered a USD54 million loss in the wake of the November 13 Paris terrorist attacks that killed 130 people.
