Air France-KLM is ready to cut capacity by more than the previously announced 20 per cent if the coronavirus recovery falls short of expectations, chief executive Ben Smith said on Friday.
KLM on Thursday reported an unprecedented €768 million loss for the first half of 2020, with passenger numbers falling 95% in the second quarter from nine million to less than half a million.
To secure the future of both carriers, the French and the Dutch governments have provided financial packages with conditions attached to increase competitiveness and achieve sustainability objectives.
"The state will do anything necessary to conserve this national airline company, the jobs that go with it and the independence that this represents", said Bruno Le Maire, France's finance minister.
"The exceptional support of the French and Dutch governments has provided Air France-KLM with the liquidity needed to weather the crisis and ensure a gradual recovery in business", added Smith.
KLM announced 1,500 more layoffs on Friday, weeks after Air France moved to reduce its headcount by 7,580. This has sparked protests in France.
Air France-KLM also said EBITDA loss had been minimalised at an average of €260 million per month over the period, compared to an initial estimate of €400 million.
"Entire families will be affected, 300 employees will lose their jobs there for Hop but what will the repercussions be for its subcontractors?"
According to the recent AT Kearney study, Air France's costs, excluding fuel and landing charges, were 30 per cent higher on average than its competitors, including traditional rivals such as Lufthansa.
By comparison, Air France SA plans to cut 6,500 jobs, or 16 percent of its workforce, through 2022. The group's operating loss and 1.18 billion euros in revenue were broadly in line with the company-compiled analyst consensus.
The company is hoping that major shareholders, such as Qatar Airways, can come to the rescue.