Julian Moxon/Paris
Air France president Jean-Cyril Spinetta has unveiled the main elements in his plans to solve the "persistent competitiveness problems" which he says continue to plague the airline. Pilots' unions have objected to the plan, however.
The strategy centres on a Fr40 billion ($6.7 billion) investment in new aircraft and ground operations, with further major reductions in costs. A proposal has also been put to the Government for up to 20% of the state-owned carrier to be handed to employees, with about half earmarked for pilots in exchange for a 15% cut in salaries.
Pilots have expressed "surprise" at the plan to reduce salaries, although their overall relationship with ex-Air Inter president Spinetta has improved from the confrontations with his predecessor, Christian Blanc, who resigned after the Government refused a full privatisation of Air France.
Spinetta says that "growth must be at the heart of our strategy", adding that Air France has invested "infinitely less" in the last four years than its main European competitors, British Airways and Lufthansa - partly because of the freeze on new-aircraft purchases imposed by the European Commission when it allowed the Fr20 billion Government state aid.
Five Boeing 777s and five Airbus A340-300s will be delivered in 1998, and the board has been asked to authorise an unspecified number of options held on the types, which Spinetta says must be converted to firm orders to maintain competitiveness. While the emphasis is on renewing the long-range fleet, he adds that the short- and medium-range fleet operated by the ex-Air Inter domestic carrier (now absorbed into the Air France Group) must also be reviewed.
Unit costs will have to be cut by 10% by the year 2000, on top of the 15% achieved in the last three years. Some of the savings will come from fleet simplification as older types are withdrawn, but the workforce has been told that the main thrust "-must come from within", although Spinetta promises there will be "no layoffs, and no salary freezes".
The new president seems doubtful about allowing a foreign airline partner to take any significant stake in Air France, instead pointing to the Star Alliance as an example of airline co-operation
Air France shares will be offered on the French stock exchange - although there are serious differences of opinion between Spinetta, who wants at least 20% to be released to the public, and transport minister Jean-Claude Gayssot, who has said that only 10% of the carrier should be sold.
Air France expects to post unprecedented profits of more than Fr1 billion when first-half figures for the 1997/8 financial year are revealed on 16 December.
Source: Flight International
