March 28, 2024

Air France Plans Job Cuts as Operating Loss Looms

The carrier said it would no longer reach its target to break even this year, but said it was “imperative” to achieve that in 2014.

“We are in a period of weak demand,” Chief Executive Frederic Gagey told a news conference. “We have felt the full brunt of the cyclicality of air transport.”

Air France, part of Franco-Dutch group Air France-KLM, said it would begin negotiations with staff representatives from October 4 on new voluntary departure plans to cut an expected staff surplus for next year.

Air France has been hurt by the impact of Europe’s economic woes on demand for air travel, soaring fuel costs, and aggressive competition from low-cost carriers in the region and Gulf carriers on long-haul routes.

The head of rival IAG, parent of British Airways and Spain’s Iberia, Willie Walsh, said on Tuesday that European airlines would have to cut costs at their short-haul businesses to compete with budget airlines or struggle to stay aloft.

Traditional network carriers are cutting jobs, renegotiating staff contracts and dropping uncompetitive routes.

Air France is already cutting around 5,120 out of 49,300 staff on French contracts by the end of 2013 as part of plans unveiled in June last year.

Air France added on Wednesday that it would further reduce capacity on French point-to-point routes out of Paris Orly airport and in its regional bases, while it would develop its Transavia European unit.

The carrier also said it would retire its Boeing 747 freighters from its cargo fleet by 2015. It will stop flying the jumbo aircraft on passenger services in parallel.

(Reporting by Matthias Blamont; Editing by Leila Abboud and Tim Hepher)

Article source: http://www.nytimes.com/reuters/2013/09/18/business/18reuters-airfrance-jobs.html?partner=rss&emc=rss

Europe Offers U.S. a Deal, Hoping for Global Rules on Airline Emissions

BRUSSELS — Seeking to end years of acrimony, the European Union has made concessions to the United States to try to gain support for global rules on airline emissions.

Under the arrangement, the European Union would pare back its regulations, applying them only to its own airspace. The original plan, which the United States and other countries rejected, would have imposed charges for emissions over an airline’s entire route if the flight began or ended in Europe.

In exchange, Europe is pushing for a global deal on aviation emissions.

The European concessions — proposed quietly over the summer and made public this week — aim to end a trans-Atlantic dispute over a European law to curb emissions on major international routes. In doing so, the European Union is looking to present a united front with the Americans and press the rest of the world to adopt similar or more extensive controls.

“This is a multilateral negotiation where you give and take,” Isaac Valero-Ladrón, a spokesman for the European Commission, said in a statement. “We should not miss the bigger picture: a global deal means more emissions covered in the long term.”

The European law, which came into force on Jan. 1, 2012, covers emissions from most flights that touch down in, or take off from, European airports, obliging foreign airlines to buy some carbon permits from traders and governments. Airlines face fines of 100 euros, or $131, for each excess ton of carbon dioxide emissions that they fail to offset with permits. Repeated breaches can even lead to a ban from European airports.

So far, the rules have been applied only to flights within Europe, and European carriers and most non-European airlines have complied. The program is supposed to be expanded next year to include international flights in and out of Europe.

Despite the proposed concessions, a global deal is still a long shot. The United States and other countries have supported the arrangement, according to European Union diplomats. But emerging nations like China and India are resisting similar levels of regulation, which could make it difficult to develop global standards.

From the start, the aviation emissions law approved by European Union nations in 2008 has generated intense opposition among foreign governments, which say the rules violate their sovereignty and unfairly raise the costs of airlines from developing countries.

Carriers like China Eastern Airlines and Air India have refused to participate in the system, and they face the prospect of fines for not providing emissions data. Airbus, the European aircraft manufacturer, warned that Chinese carriers had halted some aircraft orders to signal their dissatisfaction with the European law.

Last year, President Obama signed the European Union Emissions Trading Scheme Prohibition Act. The law could exempt carriers like American Airlines and Delta Air Lines from making payments.

Amid the outcry, Connie Hedegaard, the European Union climate commissioner, announced late last year that she would “stop the clock” on the system for 12 months, relieving airlines of making the first payments, which would have been due in April 2013. Those payments were expected to be modest. But the airlines balked because they could face big bills in coming years as the number of permits they needed to buy potentially rose.

Now, the European Union is putting forth a compromise.

Under the compromise, countries could regulate, for now, “the portion of those flights within the airspace of that state or group of states,” according to a copy of a working paper. But the paper also calls for a global set of regulations by 2016, and for that system to be carried out “from 2020 as part of a basket of measures which also include technologies, operational improvements and sustainable alternative fuels.”

On Wednesday, the International Civil Aviation Organization, a United Nations group based in Montreal, agreed to forward the European compromise proposal to a meeting of its general assembly that will start this month. The group is examining ways to regulate pollution from aircraft engines, which account for about 3 percent of greenhouse gas emissions.

European officials said paring back their system in exchange for a global deal would represent a better outcome. Under the new proposal, emissions would be reduced 37 percent by 2050 from 2005 levels, compared with just 20 percent under the original plan.

But some environmentalists said they had doubts about the value of the compromise.

“Timing is everything when it comes to global warming because of the cumulative effect of CO2 emissions,” said Bill Hemmings, an aviation expert at Transport and Environment, an environmental group based in Brussels. “So why would we give up on a law that is already cutting aviation emissions when it is very uncertain what the climate will get in return?”

Anthony Concil, a spokesman for the International Air Transport Association, an industry group representing the world’s major carriers, declined to comment on Europe’s new proposal. Instead, Mr. Concil encouraged nations at the International Civil Aviation Organization meeting to “achieve a global agreement” allowing airlines to offset their carbon emissions and avoid “a patchwork of uncoordinated measures.”

Article source: http://www.nytimes.com/2013/09/06/business/global/europe-offers-compromise-to-us-on-airline-emissions.html?partner=rss&emc=rss

E.U. Considers Emission Fines for Chinese and Indian Airlines

The carriers are accused of not providing emissions data, as required by the European rules, and not participating in a permit system that entitles airlines to emit greenhouse gases in European airspace.

The volumes of carbon dioxide that the European Commission said the 10 carriers emitted through their jet engines in Europe last year was comparable to the emissions from burning about 130 rail cars of coal.

The commission said the eight Chinese carriers could face fines totaling €2.4 million, or $3 million, and the two Indian airlines face total fines of €30,000.

So far the emissions rules apply only to flights within Europe, and European carriers and most non-European airlines have complied. Still hotly debated, though, is the planned expansion of the system next January to include international flights in and out of Europe.

Japan, Russia and the United States, as well as China and India, were among about two dozen countries that protested against that expansion early last year.

The resistance by the Chinese and Indian airlines to even the intra-Europe part of the program highlights the fierce opposition, particularly in emerging economies, to environmental rules imposed by Europe on companies and organizations in other parts of the world.

No airlines have been fined yet for violating the permit system, and the program does not present them with huge costs, at least initially. The system has added less than €1 to the cost of flights from, say, Paris to Rome.

The warning Thursday to the Chinese and Indian carriers derived from their failure to report their emissions to the national authorities and their missing of an April 30 deadline for handing over sufficient numbers of permits to the national authorities to cover their emissions last year. The European Commission, the Union’s administrative arm, which made the announcement, oversees the system.

Connie Hedegaard, the Union’s commissioner for climate action, said there was no excuse for the airlines to ignore Europe’s system.

“It’s not so that when we make our European laws, then we say they count for everybody except for Chinese and Indians — and that is no different in the aviation sector,” Ms. Hedegaard. “It shows how controversial and difficult it is to get to the adequately ambitious outcome we need in global aviation.”

Officials from the Chinese Mission to the European Union did not have any immediate comment. The Indian authorities, and officials at Air India and Jet Airways, the other Indian airline accused of violating the Union’s rules, could not immediately be reached for comment.

The resistance by the Chinese and Indian carriers against going along with even the intra-European portion of the emissions regulations is only one of the snags in the Union’s program, which is the world’s most extensive effort to control greenhouse gases like carbon dioxide. It relies on the use of permits for the right to emit at certain levels, essentially requiring producers of greenhouse gases to pay for the right to emit them.

The system was established eight years ago, initially to cover heavy industry in Europe, but it has lately been on the verge of collapse. That is in large part because the weak European economy has somewhat curtailed emissions- producing activity, weakening demand for the permits. Another factor is that the national authorities gave too many permits away to sectors like the steel industry. Prices are currently at levels too low to force polluters to change to cleaner practices.

By expanding the program last year to include airlines, and the greenhouse gases emitted by jet engines, the European Union made its farthest-reaching move yet to protect the environment.

Article source: http://www.nytimes.com/2013/05/17/business/global/17iht-emit17.html?partner=rss&emc=rss