Restructuring costs hit Air France

Air France-KLM has said its net loss ballooned to nearly 900 million euros (£730 million) in the second quarter after it took a hefty charge to pay for restructuring which will see it shed about 10% of its workforce.

The Franco-Dutch airline operator said its net loss grew to 895 million euros (£726 million) in the three months to June 30, compared with a loss of 197 million euros (£160 million) a year earlier.

In a statement, the airline said its accounts included a 368 million euros (£299 million) provision to pay for restructuring which is expected to cut 5,122 jobs from a workforce of 49,301.

It expects "natural" attrition to produce 1,712 of the cuts, and then it plans to eliminate 2,056 ground staff, 904 cabin crew and 212 pilots.

Last month the airline said it was seeking voluntary changes in union contracts to avoid lay-offs but that forced redundancies may not be avoidable.

The airline said the "uncertain outlook" for the global economy and volatility in fuel prices and the euro currency "make forecasts for the latter part of the year difficult".

European airlines are struggling to cope with high fuel prices and weak economic growth due to Europe's financial crisis.

In May, Germany's Deutsche Lufthansa said last month it would cut 3,500 administrative jobs to reduce costs.

Air France-KLM's revenue rose 4.5% to 6.5 billion euros (£5.3 billion) in the second quarter, lifted by a 2.4% increase in passenger traffic, said the company.

The Press Association