Air France-KLM will place a five per cent limit on capacity growth in the next three years and freeze pay to reduce its EUR2 billion (US$2.5 billion) debt load over the next two years.
To generate EUR1 billion in cash, the group has also implemented a hiring freeze that was introduced last September as well as undertaking productivity measures to reduce overhead costs.
The group will hold back on capacity growth, reducing the fleet investment programme from EUR6 billion spent from 2009 to 2011 to a EUR5 billion limit for the next three years, reported Roswell, Georgia's Air Cargo News. Deferring aircraft deliveries and not exercising options on plane purchases will accomplish this.
Another billion will come from the company's three-year transformation plan, which includes restructuring passenger and cargo segments, as well as the maintenance division and short- and medium-haul operations.
Air France-KLM December cargo volume remained nearly unchanged when compared to November. Capacity rose 0.1 per cent month to month with traffic decreasing 0.3 per cent. For the year, capacity rose 2.3 per cent when compared with 2010, and traffic finished 2011 with a 1.7-per cent decline. Load factor was down 2.7 per cent, the Shipping Gazette informs.