Air France-KLM plan targets wiping €2bn from net debts

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Air France-KLM has outlined details of a new wide-ranging three-year plan to return it to profitability, under which the group will restructure short and medium-haul operations as well cutting costs and debts.

Under its 2012-14 plan it aims to cut €2 billion from its net debt. Half of this will be delivered through cost-savings efforts and the remainder through a transformation plan across all its business. This includes a "significant increase" in productivity and the restructuring of its loss-making medium-haul operations to return this part of the business to breakeven within the next three years.

The group will also restrict capacity growth to 5% over the next three years and defer some deliveries and not exercise some aircraft as part of plans to keep its investment programme down to €5 billion over the next three years.