Air France has said a “difficult economic environment”, including capacity cuts of 5%, would lead it to make 1,500 redundancies by October.

The airline is currently holding talks with its workers council, the Comité Central d’Entreprise (CCE), with aim of drawing up a voluntary redundancy plan by October 21.

The airline, which announced a net loss of €426m for the first quarter in July, said it had been in talks over with the council in recent months over its trading position.

Today the airline announced that passenger traffic fell 2.9 percent in August, while its load factor rose 4.2 percent due to the decline in capacity.

The group carried 6.6 million passengers in August, a year-on-year decline of 3.8 percent.

Cargo traffic fell 16.1 percent, in line with a 16.9 drop in capacity. This confirms the trend towards stabilisation in cargo activities that has been observed for several months, the airline said.

Plans to cut up to 3,000 jobs by 2011 were announced by the airline in April.

It said it hoped to avoid compulsory lay offs by not renewing short term contracts and by a recruitment freeze.