Due to the coronavirus Covid-19 epidemic, Ben Smith, CEO of Air France-KLM Group announced it would gradually reduce its activity by up to 90% by the end of the week. Up to 80% of its workforce could be temporarily laid off.
The recent constraints imposed on travelers from France, the Netherlands and more broadly from Europe have reportedly reduced Air France-KLM’s operations by as much as 30% in the last few days.
“Faced with these growing restrictions on the possibility of traveling and a strong downward trend in demand which has resulted in a drop in traffic and sales over the last few weeks, the Air France-KLM Group is obliged to gradually reduce its flight activity very significantly over the next few days, with the number of available seat kilometers (ASK) potentially decreasing between -70% and -90%,” the group explained in a statement. The measures are expected to last for at least two months.
The decision was also motivated by the transition to phase 3 of the epidemic decided by the French government. Those containment measures include the restriction of all non-essential travel.
As a consequence, all Air France Airbus A380s and all KLM Boeing 747s would be grounded.
Another series of adjustments, including the temporary layoff of 80% of the nearly 40,000 employees of the group, is expected to be announced soon, according to Le Monde. While French law states that temporary layoffs entitle workers to 84% of their net salary, pilots and cabin crew are usually paid per flown hours. Air France-KLM is reportedly engaged in talks with pilot unions to find a solution. For now, it does not appear that the French state, which owns 14.3% of the Air France-KLM airline group, will inject any cash into the carrier through an increase in its participation.
In the last week, travel bans from Europe in countries such as the United States, Israel, and Morocco have led several other European carriers to take similar measures. SAS Scandinavian Airlines has suspended 90% of its flights, while airBaltic completely halted operations.