Simon Warburton/PARIS

Air Liberte and AOM are to halve the number of aircraft in their merged fleet, drastically cut staff numbers and reduce their route structure in a bid to stem losses and attract a buyer.

With annual losses of Fr2.4 billion ($317 million) the carriers have been forced to produce a restructuring plan rapidly or face possible closure after shareholders Swissair Group and Taitbout threatened to withdraw guarantees to meet the carriers' capital needs at the end of June. The airlines faced an uncertain future because of growing losses and a change of strategy by the ailing Swissair Group.

The Swissair Group's plans for its deeply troubled French subsidiaries have already provoked industrial action by angry staff, and further unrest is likely as the carrier pushes through job cuts and other rationalisation measures as part of its survival plan.

AOM-Air Liberte chairman Marc Rochet estimates that, as a result of the integration, 1,330 redundancies will be required - about 32% of the combined staff.

Other measures include the elimination of three domestic routes from Paris Orly - Bordeaux, Marseille and Montpellier - from 11 June. AOM-Air Liberte will also withdraw from routes served by the French TGV high-speed train or Air France - although the airline adds that it is seeking talks with the flag carrier over codesharing on long-haul routes. The airline estimates it could return to break even within three years.

The wholesale cuts to the network herald a dramatic reduction in the fleet size and a concentration on just two types - the McDonnell Douglas DC-10, of which it will operate 10, and 17 Boeing MD-83s. The move will see the sale or return from lease of a range of aircraft including Airbus A340s, Fokker 100s and ATR turboprops.

While the restructuring plan swings into operation, behind the scenes talks continue with several potential investors. Tour operator Club Mediterranee has been cited as a possible rescuer as the two airlines carry about 40% of its customers on charter services.

French President Jacques Chirac, recently in the overseas French territory of La Reunion, expressed concern as Air Liberte-AOM has already cut links to New Caledonia, the Dominican Republic and St Lucia among other long-haul destinations, leading to higher fares.

Source: Flight International