As CityJet finalises restructuring it might escape Air France’s short-haul overhaul

Air France is undertaking a significant shake-up of its short and medium-haul operations as part of its Transform 2015 plan, but the Irish regional unit CityJet appears to be spared from the cost-cutting brooms after it initiated a profound restructuring in Jan-2011. CityJet, which comprises the Irish airline CityJet and the Belgian regional carrier VLM, trimmed its workforce, cut costs, increased productivity and streamlined its network and is now in better shape than some of its French peers in the Air France Group. Air France's short and medium-haul operations amassed EUR700 million losses in 2011. But its parent company Air France-KLM Group, which is looking to reduce its massive EUR6 billion debt, could also opt to divest the airline to generate cash.

While CityJet's bottom line has improved, it is not yet delivering strong profits and competition at its main hub in London City Airport is intensifying. British Airways has been growing strongly at the small airport in the London Docklands in recent years, expanding its range of routes to European destinations and adding an innovative service to New York JFK. And it could be planning to expand this.