WAGE AND JOB CUTS designed to turn round Air France's heavily loss-making domestic operations have been roundly condemned by unions, which are due to meet the management on 22 May to discuss the latest survival plan.

Air France chairman Christian Blanc, presenting details of the plan, played down the risk of industrial action, saying that he is optimistic that the operation can return to break-even over the next two years, setting the group up for privatisation by early 1998.

The domestic operations, which operate under the Air Inter Europe banner, are due to emerge as part of a broader Air France Europe operation when the region's single air market is completed in April 1997. Blanc has already warned that, without immediate action to cut costs, the operation would instead face bankruptcy (Flight International, 8-14 May).

The Air France chairman has set an ultimatum of 30 June for pilots to sign new contracts. The aim is to bring wages down to levels applicable to the rest of Air France, which are typically 10-15% lower, and to increase flying hours from the current 100h to 160h a month within the next two years.

Most controversially, the plan calls for the retirement of as many as 150 older pilots. These will be replaced by younger, cheaper, crews. Overall, Blanc is calling for the loss of up to 950 of Air Inter's 10,000 staff.

The business is running at an operating loss of Fr1.3 billion ($260 million) a year.

Source: Flight International