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‘Drastic’ cost cuts lined up to save Air France in Europe

‘Drastic’ cost cuts lined up to save Air France in Europe

Only “drastic” cost cuts will ensure the survival of the short- and mid-haul networks at loss making Air France the carrier has confirmed.

Controlled costs would need to fall by as much as 20 per cent the carrier said in a statement earlier, with staff pay and conditions among the top items on the agenda.

“Air France will continue to offer short and medium-haul service on the condition of achieving extensive restructuring and a drastic reduction in costs,” read a statement from the company.

Air France is the French arm of Franco-Dutch group Air France-KLM.

However, recently appointed chief executive Alexandre de Juniac stopped short of announcing politically sensitive job cuts at the carrier.

French presidential elections are just under a month away.

Air France parent Air France-KLM is 15.8 percent owned by the French government.

The carrier said it would develop low-cost unit Transavia and accelerate an overhaul at the freight division, which is suffering from weak demand.

“The goal is to return to break-even for point-to-point service in 2013 and for the entire short and medium haul business in 2014,” the airline said.