'Brutal' Cargo Market Hammers Air France-KLM

The head of Air France-KLM said Thursday that Europe’s biggest airline is mulling part-time jobs or temporary layoffs to combat the “brutal” situation in cargo and passenger air demand.

“We don’t see the slightest bright spot. The reduction in demand in cargo is brutal,” Air France-KLM’s director general Pierre-Henri Gourgeon told the Figaro newspaper. “The drop is also very high for premium passengers,” he said.

Air France-KLM, which is also Europe’s top cargo carrier, in May said it plans to shed 3,000 jobs in the fiscal year to end-March through attrition.

There have been press reports the carrier is targeting an additional 3,000 job cuts as cargo and passenger demand continues to fall, but Gourgeon today pledged there will be no compulsory layoffs.

Air France-KLM’s cargo unit lost swung to a $284 million loss in fiscal 2008-2009
from a year-earlier profit of $53.4 million. It is expected to post a loss for the three months to the end of June.

The airline this week said its freight traffic stabilized in June for the second month running – with traffic down just 0.4 percent from a year ago – after falling sharply since the final quarter of 2008

But after stripping out the contribution of Martinair, a fully-owned Dutch cargo carrier, Air France-KLM’s freight volume fell 17.2 percent in June.

Contact Bruce Barnard at brucebarnard47@hotmail.com.