Christian Blanc is playing cat and mouse with more than just aircraft manufacturers. Following the French presidential elections in May some outsiders expect forced redundancies to take place.
While Air France sticks to the line that it must follow the plan agreed with the unions last year, financiers and consultants say the 5,000 voluntary redundancies will not produce adequate cost savings.
'Five thousand redundancies was never enough. The figure has to be in excess of 10,000 and if [Blanc] is to do that he must have political backing. No one will back him before the election,' says Bertrand d'Yvoire of Consultair.
Air France has already achieved 2,050 voluntary redundancies and, according to an insider, Blanc has indicated there will be a 30 per cent staff cut when the company's HQ moves to Charles de Gaulle airport.
Blanc's intention to cancel orders by Airbus and Boeing is seen as a ploy to signal to employees and politicians that Air France is still struggling, reduce immediate expenditure and cut down the already bloated fleet. The common interpretation is that Blanc intends to defer delivery for a couple of years, certainly more economically favourable than paying the penalty fees.
Financially, Blanc says in the current 15-month accounting year Air France will see a gross operating profit of FFr2.5 billion ($474 million) to FFr3.0 billion, with a net loss of between FFr3 billion and FFr3.5 billion. One London banker says the carrier has not been using enough of the FFr10 billion capital injection received so far for debt reduction, but has used some to cover operational losses.
Financially, Blanc says in the current 15-month accounting year Air France will see a gross operating profit of FFr2.5 billion ($474 million) to FFr3.0 billion, with a net loss of between FFr3 billion and FFr3.5 billion. One London banker says the carrier has not been using enough of the FFr10 billion capital injection received so far for debt reduction, but has used some to cover operational losses.
Source: Airline Business
