How Air France got there

The management of Air France and the unions detailed additional measures this Friday to achieve the objectives of the 2015 Transform plan, in particular the voluntary departure plan (PDV) concerning 2.800 people.This one will touch 1.826 ground positions, including 582 assigned to HUB Deroissy-Charles de Gaulle and 591 in provincial stops.The measures concerning the overstaffing of the navigants (350 pilots and 700 full -time equivalent hostesses) will be presented later.

This is the second PDV in two years, after launched last year (3.400 people), and the third since 2009 (1.900 people left in 2010).Result, with the natural departures not replaced, Air France will have removed from IC to the end of 2014 nearly 10.000 people in five years, and will have less than 50,000 employees (70.000 subsidiaries included, and 100.000 for Air France-KLM).The company's objective is to return to green in 2014 after having accumulated, during the six years of consecutive losses, more than two billion euros in operating losses.

"We lived above our means"

How did we get here?Many observers have often invoked the crisis by highlighting the structural difficulties of traditional companies (lack of competitiveness due to excessive taxation, development of Gulf carriers and low-cost, etc.).All this is true, but does not explain everything.Air France entered the 2009 less well prepared crisis (in terms of costs) than its competitors Lufthansa and British Airways and, during the first years of the crisis, the tricolor company was slow to react."We lived above our means," we recognize internally.Hence today the intensity of the 2015 Transform plan.Launched on January 10, 2012, it aims to achieve two billion savings over the next three years at Air France-KLM level.More specifically, generate in three years 2.9 billion euros in cash flow, including two billion for Air France and 900 million for KLM, the two 100% subsidiaries of the Air France-KLM group.This in order to reduce the debt by 2 billion during the period to bring the debt to 4.5 billion euros.

When Air France-KLM caracked out the air transport

Very ambitious goals to get back on track while, a few years earlier, the group was shown as an example for its excellent results, as British Airways was in the 90s.As a reminder, in May 2008, when the barrel crossed 100 dollars and the American economy showed disturbing signs of breathlessness after the crisis of subprimes started in the summer of 2007, Air France-KLM announced an increase of 13% of its operating profit for the 2007-2008 financial year to 1.4 billion euros (a record).Except that these figures were misleading.These good results came more from the efficiency of fuel covers (early purchasing instruments which aim to pay oil less than the market price) which, for example in 2007-2008, contributed to a billion for the benefitof exploitation!They also came more from the very good profitability of KLM, than from the real performance of Air France, often overestimated.

Recipe drop by 15% in 2009

During this period, the company failed to take advantage of this favorable situation to lower its costs enough.Especially when the new collective agreements were renegotiated with pilots in 2006 and hostesses and stewards in 2008.This while at the same time, in February 2008, the salary agreement for the ground staff, was revised upwards.It is even signed by the CGT, for the first time since 1982.The increase in wages in 2008 will be, on average, of 3 % (accompanied by an annual uniform premium of 200 euros, the equivalent of an increase in wages of 0.6 %), while they were usuallymodeled on inflation forecasts around 1.6 %.

In addition, productivity gains came mainly from a more or less stable staff growth policy.When unit revenue collapsed with the 2009 crisis (15%), Air France drank the cup.More than the others.The results of the first three months of 2009 attest to this.During this period, Air France-KLM lost 529 million euros (in operation) against only 44 million for Lufthansa.

The 2010 rebound badly appreciated

Then the group was slow to react.Admittedly, the trauma in which the company was plunged after the Rio-Paris accident on June 1 was not conducive to drastic measures. Toujours est-il que le plan de départs volontaires portant sur 1800 people décidé en août 2009 était largement insuffisant.In addition, the rebound in activity for a few months in 2010 was poorly appreciated.Believing that the crisis was over, the group did not want to deprive itself of arms to start from the front.Alas, this rebound, which resulted in very good half -yearly results in 2010, was just a straw fire.The crisis left again and, after a governance crisis in 2011 which did not help things, it will be necessary to wait until early 2012 for a plan to be launched up to the stakes.