Air France will be cutting back on its domestic network. The company made the news official on 13 May, at the end of the Central Social and Economic Committee (CSEC) meeting. In total, 465 positions are affected by a voluntary redundancy plan undertaken on less than two yearss domestic network. For passengers, this will mean 15% reduction in available seat kilometres (SKO) by end 2021. The Air France bases most at risk include Corsica, Orly, Marseille and Nice.
This domestic cut is in response to a problem of overstaffing in the short-haul ground business, itself caused by competition. " In a highly competitive environment, we are all fully mobilised to defend a domestic market that is essential not only for Air France but also for the Air France-KLM Group as a whole. "explains Benjamin SmithChief Executive Officer of Air France-KLM. The French domestic network is an integral part of Air France's history, guaranteeing its territorial roots and linking the French regions to the rest of the world by offering several thousand connecting opportunities every day. ".
However, the accounting reality does not spare the short-haul business: the losses registered in 2017 96 million eurosIn the last year, the gap has widened even further - and sharply. 189 million euros. Cumulative losses even amount to 717 million since 2013…
where high-speed lines have been introduced linking Paris to the provinces in less than two hours, Air France routes have lost 90% of market share
The "guilty of this fierce competition: the TGV and the companies low-cost. " Over the last five years, Air France's domestic network has been heavily impacted by competition from high-speed train services, which have increased capacity throughout the country, reduced journey times and developed a more competitive offer. very competitive low-cost offer "explains the company's management. And to add: " where high-speed lines have been set up linking Paris to the provinces in less than two hours, Air France routes have lost 90% market share ".
As for low-cost airlines, Air France's management is quick to point the finger at the ambiguous role played by certain local authorities: " the companies low-cost set up bases at the main ports of call and rapidly gained ground using aggressive pricing policies and sometimes with thepublic authority aid. This is in contrast to Air France, whose teams are based at 90 % in France, most of the time, these companies have not helped to develop employment in the regions where they operate ".
It now remains to be seen how this domestic austerity programme will be received internally. " We will lead the process of consultation with social partners in a spirit of openness and dialogue, and we are committed to supporting every employee who wishes to move to a new position or a new professional environment. "says the CEO of Air France, Anne Rigailat the same time stating that " A host of talented pilots, flight attendants, mechanics and engineers will be joining us in 2019 to supporting Air France's growth ".
