Air France-KLM to speed up efficiency drive

KLM flightAirline Air France-KLM said on Friday it is to bring in new measures to cut costs and speed up all current cost reduction initiatives after posting a second quarter loss.

The Franco Dutch airline said it had booked a loss of €79m between April and June  on turnover up 3% at €6.6bn.

However, the turnover boost was due to currency effects and without the benefits, revenue would have been down by 4.5%, the company said. Freight services were hardest hit and passenger numbers rose marginally.

Because efforts to improve profitability have not yet worked, the company will be forced to take extra measures in the second half of this year, the airline said in a statement. In addition, the airline will cut back on loss making routes this winter and reduce capacity by offering fewer flights.

Pressure is also mounting on French staff to accept change. In the statement, chief executive, Alexandre de Juniac said that ‘following the agreement signed by KLM with its unions, the rapid conclusion of the negotiations with the Air France unions is key to relaunching the results turnaround’.

The agreements include a pay freeze and pledges to increase productivity 4%. KLM pilots are also considering a two-year rise in their retirement age.

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