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Coronavirus: Air France forced to cut spending

2020-02-27T06:09:24.858Z

After Lufthansa, it is Air France-KLM's turn to hunt for spending to reduce the impact of the epidemic on its finances.



The company Air France will take new measures of economy, going from the reduction of expenses to the freezing of certain hirings, to counter the negative effects of the epidemic of coronavirus on its financial trajectory, according to an internal letter obtained Wednesday evening by l AFP.

Read also: Coronavirus: Air France-KLM figures a shortfall of 150 to 200 million euros from February to April

The impact on traffic of the Covid-19 epidemic "has increased sharply since last week, with cancellations not only to China and Asia, but also to all destinations in our network, " writes in this letter dated Wednesday the chief financial officer of Air France Steven Zaat, as indicated by Les Echos in their Thursday edition.

“Several of our Corporate and Key Account customers are indeed taking measures which aim to limit, even prohibit, the travel of their employees. The consequences of these measures will necessarily affect our financial trajectory and could put us in a difficult cash position if we do not react immediately, ”continues Steven Zaat.

Hiring freeze

In this context, the financial manager calls on managers to tighten so-called “ discretionary ” expenses such as travel, receptions and invitations, the use of consultants or even seminars. He also asked for a continuation of the hiring freeze for " all services that are not directly related to our operations ". Some promotion and marketing campaigns are also postponed while all departments are asked to reduce their operating expenses " to the minimum ", he adds.

In addition, " we will quickly review all of the IT and real estate investments planned for the coming period ," he wrote in the letter.

According to Les Echos , the KLM company sent a similar communication to its employees, signed by the hand of CFO Erik Swelheim, announcing " a hiring freeze, an incentive to take holidays during the downturn in activity and a round of screw on expenses for all administrative services . "

These measures echo those implemented by the German Lufthansa, which announced Wednesday a freeze on its hirings and offers of unpaid leave to its employees to " face the economic effects of the coronavirus " while the epidemic continues progress.

Source: lefigaro

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