Air France Long-Haul Cuts Further Deplete Cargo Capacity

The recent decision to announce cuts of around 3,000 jobs and the possibility of many more thousands to follow, was not greeted warmly by Air France employees, as illustrated by Nol van Fenema in today’s issue of CFG.

According to Air France, the cuts are necessary due to the breakdown of negotiations with their pilots who are still refusing to accept longer working hours.
Air France’s aim is to try and generate a further EUR 1.8 billion in savings.
However the pilots are not playing ball.

Due to the breakdown in talks, the Board of Directors have given the AF-KL managers a mandate to come up with a plan-B.

Long haul capacity to be cut by 10%
That’s the new move that AF management have reached and one which has apparently been condoned by the BoD.
It was decided to cut the AF long haul capacity by ten percent between now and the summer of 2017.
This means that a total of fourteen wide-body aircraft will be put into “dry-dock.”
These will mainly be Airbus A340-300s. These aircraft will not be replaced during this period by Boeing 787 Dreamliners which were planned to enter into service.
The Air France long haul fleet will go down from today’s 107 aircraft to 93 units by summer of 2017.
The airline is quoted as saying that this will result in savings of up to EUR 200 million.
A drop in the ocean considering the financial state the carrier is already in.
Air France has a total of twelve B787-9s and eighteen A350-900s on order, but these deliveries will most probably be deferred or even partly cancelled.

Freight capacity will suffer
The decision to cut capacity even further will surely affect Air France’s cargo volumes even more.
The cargo results have been dropping considerably during the past twelve months.
It is said that due to the cut that 35 weekly frequencies to destinations mainly in the Middle and Far East will be taken out by the summer of 2017 as well as closing five routes altogether.
Routes which according to Air France are already loss makers.
But are they loss makers for cargo as well?

It has not yet been revealed which routes or frequencies will be hit, but this will again affect cargo capacity on offer by Air France and do nothing to even start boosting customer confidence in the tragically embattled airline.

It seems quite perverse to see that this once proud passenger and cargo airline is forced to take such measures due to what they see as a non-accommodation by their pilots.
Ironically the loss of almost 3.000 lost jobs will include 300 pilots going out along with 900 cabin crew and 1,700 ground staff.
Wonder how the pilots union will react to that!

KLM the silent sufferer
The AF-KL union has not been a happy one.
KLM also has announced cuts in its cargo fleet and the almost concluded demise of Martinair Cargo.
Of course Middle and Far Eastern airlines offer strong competition to national carriers such as AF-KL.
However, this is nothing new and it’s our view that the management of both carriers could have mastered the so called competition issue by being more inventive and on-top of the market developments during the past couple of years.

Cutting cargo capacity even further will not help the financial bottom line in any way and as mentioned above will further erode customer belief in a continuous AF-KL cargo product for the future.

John Mc Donagh