Transform 2015 progress update: Consultation with the Central Works Council

- the Paris-CDG hub has a still under-exploited major potential;
- Air France must modify its medium-haul strategy in order to retain its position on the French market, essential to its strategy, and preserve its dominant position at Paris-Orly;
- Air France is pursuing its commercial offensive and re-boosting its brand;
- Cargo's belly capacity contribution is vital to passenger operations. Air France is continuing to adjust its freighter fleet;
- Growth in profitable engineering and maintenance activities;
- Air France must continue to reduce its costs notably in areas where discrepancies with the market threaten the long-term sustainability of activities.

Presentation of the measures to complete the Transform 2015 plan

The Air France Management subsequently presented the measures required to complete the Transform 2015 plan, aimed at achieving a positive result in 2014:

- Pursue and increase procurement-related actions;
- Initiate talks aimed at adapting resources to workloads particularly through an optimized organization and processes;
- Specific action plan in order to particularly manage mobility more effectively;
- Pursue wage moderation;
- Launch a voluntary departures plan for ground staff concerning 1,826 ground staff (full time equivalent), distributed between the following areas of activity:

- Cargo: 282
- Paris-CDG hub: 582
- Paris-Orly: 128
- French stations: 591
- Administrative Activities: 145
- Other activities: 98

The Aircraft Maintenance Division, IT Division and certain cross-functional activities are excluded from the voluntary departures plan.

Some of these measures will lead to negotiations with social partners. These negotiations must be completed before the end of the year, so that action plans can be implemented early in 2014.

Measures for handling the excess numbers of pilots (350 full time equivalent) and cabin crew (700 full time equivalent) will be presented later.

Strengthened vocational retraining

The general structure of the voluntary departure plan project for ground staff is identical to the previous plans. Two new measures will be offered: the creation of an assistance measure for retraining and supporting wage differentials. All these measures will be the object of thorough discussions with staff representatives and unions.

The schedule may be as follows:

- candidates can volunteer in four stages from 3 February to 26 June 2014,
- departures will take place from 28 February to 31 December 2014.

In addition, some additional measures of the voluntary departure plan, such as the possible extension of the duration of subsidized part-time work, may be improved.In parallel with the implementation of this new voluntary departure plan, the actions of mobility forums will be strengthened.

"Transform 2015 is working and our initial efforts are beginning to pay off. We need to continue and intensify our actions. With this new voluntary departure plan for ground staff, we also want to focus our attention on supporting our employees in these changes. Together we will achieve our ambitious goals." stated Frédéric Gagey, Air France Chairman and CEO.