Air France-KLM Losses $1.1B in Restructuring Costs
PARIS (AP) - Air France-KLM said Monday its net loss ballooned to nearly €900 million ($1.1 billion) in the second quarter after it took a hefty charge to pay for restructuring that will see it shed about 10 percent of the airline’s workforce.
The Franco-Dutch airline operator said its net loss grew to €895 million in the three months to June 30, compared to a loss of €197 million a year earlier.
In a statement the airline said its accounts included a €368 million provision to pay for restructuring that is expected to eliminate 5,122 jobs out of a workforce of 49,301.
It expects "natural" attrition to produce 1,712 of the cuts, and then it plans to eliminate 2,056 ground staff, 904 cabin crew and 212 pilots.
Last month the airline said it was seeking voluntary changes in union contracts to avoid layoffs but that forced departures may not be avoidable.
The airline said "uncertain outlook" for the global economy and volatility in fuel prices and the euro currency "make forecasts for the latter part of the year difficult."
European airlines are struggling to cope with high fuel prices and weak economic growth due to Europe’s financial crisis.
In May, Germany’s Deutsche Lufthansa AG said last month it would cut 3,500 administrative jobs to reduce costs after the German company lost $521 million in the first quarter.
Air France-KLM’s revenue rose 4.5 percent to €6.5 billion in the second quarter, lifted by a 2.4 percent increase in passenger traffic, the company said.