Corsairfly restructuring decision expected this week

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Corsairfly is seeking union approval this week of a restructuring programme resulting in two of the French leisure carrier's Boeing 747-400s being replaced with Airbus A330s and cutting over one-quarter of its workforce.

The long-haul carrier has already begun implementing a drastic network restructuring which involves eliminating several routes including Paris Orly to Punta Cana in the Dominican Republic and Nairobi and Mombasa in Kenya.

ATI first reported in late May that Corsairfly was working on a restructuring programme that involved shedding 25% of its workforce and withdrawing half of its 747-400 fleet.

Corsairfly marketing and network director Sylvain Bosc says the carrier's 27 unions will decide on 21 October whether to support the restructuring proposal. He says the proposal was first introduced to unions in June, shortly after a new management team including Bosc was brought in by owner TUI Group to turnaround the loss-making carrier.

Corsairfly currently has 1,500 employees but Bosc says 25% to 30% of its workforce will be cut as part of the pending restructuring. He says the restructuring also includes reducing the carrier's Boeing 747-400 fleet from six to five aircraft next summer. Pending union approval of the restructuring, two of the remaining five 747-400s will be replaced with A330s in the third quarter of 2012.

Bosc says the A330s will be sourced from TUI. Corsairfly already operates two A330s alongside its six 747-400s.

Bosc says the new business plan envisions keeping three 747-400s for dense routes such as Paris-Reunion Island, a route which Air Austral plans to operate A380s on from 2014. He says Corsairfly plans to refurbish these three 747-400s in 2012 and increase the size of the business class cabin from 18 to 26 seats.

Speaking to Flightglobal at last week's Amadeus Horizons 2010 conference in San Francisco, Bosc says the restructuring plan put together by the new Corsairfly management team is aimed at "remerging in two years with a sound and profitable cost base". He adds "it is like a chapter 11 restructuring outside court".

He says Corsairfly's network is already in the process of being transformed to focus on regular flights to core destinations. Bosc says Corsairfly's network "basically was too scattered around" with several routes only operated with one or two weekly flights.

In addition to Paris to Kenya and the Dominican Republic, direct routes from French provincial cities such as Toulouse to Reunion and islands in the Caribbean are being cut. All the routes being axed will no longer be served from the start of the winter 2010 schedule on 11 November.

Bosc says core routes being retained include Paris Orly to Reunion Island, Guadeloupe, Martinique, Mauritius, Madagascar and Montreal. The carrier will also keep its Paris-Miami service, which was launched in June with three weekly flights.

Bosc says the carrier's new management team hopes to resume growing its fleet, staff and network in three to five years. Bosc says Corsairfly's new management team is confident it will now secure the required support from unions for the transformation plan to be implemented, saying there is no alternative if the airline is to survive. He says French regulations require that the carrier secures support from unions that collectively represent at least 30% of employees.

There is also a requirement that states a restructuring cannot be implemented if unions representing more than 50% of employees come out against the proposal. In the event that less than 50% are against and more than 30% are in favour with the remainder not deciding either way, the proposal will be deemed accepted.

Union leaders will make their decision on 21 October. While the initial proposal was submitted to unions in June Bosc says Corsairfly has been making adjustments the last four months in response to union feedback. Small adjustments have even been made this month in hopes of securing a positive vote.

While Corsairfly is reducing its fleet, network and head count Bosc points out the carrier is investing "millions" in new IT systems from Amadeus. "For us it's the strategy enabler," Bosc says of the IT investment.