Air France warns of job cuts after stand-off with pilots

[October 02, 2015] By Dominique Vidalon

PARIS (Reuters) - Air France will announce significant job cuts on Monday after the failure of talks with pilots to boost productivity, the head of parent Air France-KLM told Europe 1 radio on Friday.

Air France, like other traditional carriers, faces intense competition from low-cost rivals on regional routes and from Middle East airlines such as Emirates for long-haul passengers.

The airline had on Thursday warned unions it would be cutting back its operations in the next two years in order to safeguard its future, after talks with pilots failed over its "Perform 2020" restructuring plan.

It had set a Sept. 30 deadline to reach agreement on the plan, which was unveiled in September last year and which calls for further cost reductions and an investment review.

"It will unfortunately be a significant job reduction plan ... We will discuss it with staff representatives on Monday," Air France-KLM Chief Executive Alexandre de Juniac said.

De Juniac also told Europe 1 that while talks with pilots' representatives had ended, the door remained open if unions showed "a true will to negotiate".

Prime Minister Manuel Valls on Thursday urged pilots to make an effort to reach a deal.

Philippe Evain, head of the main SNPL Air France pilots' union, told Reuters on Friday it was ready to make new proposals to management. "Yes we are ready to make new proposals. We are always open to discussions," he said.

Evain would not say if any fresh talks could take place over the weekend and ahead of a planned workers' committee meeting.

An airline spokeswoman said no new talks were scheduled.

Shares in Air France-KLM rose 1.8 percent in a stronger European market.

The standoff over the Sept. 30 deadline is the latest manifestation of long-running tensions between management and pilots, who staged a 15-day strike last year that cost Europe's second-largest network carrier hundreds of millions of dollars.

Three French trade unions - the CGT, FO and UNSA - have already called on Air France ground staff to hold a strike on Oct. 5 to protest against possible job cuts.

(Reporting by Dominique Vidalon, Pascale Denis, Tim Hepher; Editing by Greg Mahlich)

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