October 15, 2015 / 7:53 PM / 2 years ago

UPDATE 1-Air France says job cuts can still be avoided if talks succeed

(Adds govt, union comments)

PARIS, Oct 15 (Reuters) - Air France-KLM’s plans to cut jobs and flights can still be avoided if negotiations between managers and unions progress, the airline’s board said on Thursday.

The board reaffirmed its support for Chief Executive Alexandre de Juniac after he updated directors on talks with labour unions about a restructuring that could see 2,900 jobs cut at Air France.

“The 2017 activity-reduction plan can still be avoided if negotiations conclude quickly,” Air France-KLM’s board said in a statement to Reuters.

“It (the board) encouraged management and labour organisations to pursue talks in this direction.”

After it failed to get the agreement of its pilots to a plan to increase working hours for the same pay earlier this year, Air France management announced a so-called ‘plan B’ to cut 2,900 job cuts and reduce its network, only to be met with violent protests by staff.

The conciliatory tone taken by the board on Thursday follows comments made by government ministers including Prime Minister Manuel Valls who said job cuts were not the only way to help the company recover lost ground in competing with low-cost and Gulf carriers.

“If pilots don’t take their responsibilities, there will be plan B,” Valls said. “There is no other choice but to reform.”

The French government owns 17.6 percent of Air France-KLM.

The main pilots’ union, the SNPL, said it was “exactly on the same line” as the management on the necessity to avoid ‘plan B’, but that the government should also offer a more favourable competitive framework to the company.

“For growth to be sustainable over the long term, adjusting staff costs will not be enough,” said Veronique Damon, a SNPL union official. (Reporting by Cyril Altmeyer; Writing by Leigh Thomas; Editing by Michel Rose and Greg Mahlich)

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