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August 2009 Vol 4, International Airlines News

Aeroflot to cut 2,000 jobs in six months

Sun, Sep 20, 2009

Russian airline Aeroflot, which is 51% government owned, has said it plans to cut 2,000 jobs in the next six months, after its profits dropped amid higher fuel prices.

Russian airline Aeroflot, which is 51% government owned, has said it plans to cut 2,000 jobs in the next six months, after its profits dropped amid higher fuel prices.

"Our general director has said that up to 2,000 jobs will be cut by the end of year or first quarter of next year," spokeswoman Irina Dannenberg told AFP.

 Russia's Interfax news agency cited a company insider as saying Aeroflot had already cut 500 jobs and could cut up to 6,000 -- more than one-third of the company's 15,500 employees, AFP report said. Asked about the likelihood of more sweeping job cuts, Danneburg said: "Yes, maybe even more, but for now 2,000." "The general director has more than once said the staff needs to be thinned, now with the crisis this has become necessary," she added.

  According to Finance markets, the news comes just a few days after Japan Airlines announced plans to cut its operating schedule and reduce headcount by almost 7,000.

The same source reported that the loss-making airline said that a total of 6,800 jobs will go as it embarks on a cost-cutting exercise and is making plans for fuel-efficiency and a focus on business customers.

  In July, the airline announced that its net profit in 2008 had plummeted by 88% to $37m (£20m), down from $313m in 2007, as BBC gives information. The company blamed it on higher fuel costs and losses at its cargo operations, which declared bankruptcy in June.

  Reflecting similar problems at airlines worldwide, Aeroflot and its subsidiaries also saw an 11.5 percent drop in passengers in the first six months of 2009 from the same period last year amid the global recession, AFP report said. The carrier, which serves 47 countries, pushed back by two and three years the purchase of five Airbus A320 and 321 aircraft in July amid the slump in ticket sales.

  Aeroflot, a member of the Sky Team alliance led by Air France-KLM, had eyed ambitious expansion plans in recent years as part of a envisioned transformation from Soviet state airline to global aviation giant, according to the same source. Last year, it announced ambitions to triple its passenger numbers to reach 21 million per year by 2015.

 Airlines are struggling to stay afloat during the global economic downturn which has led to a slump in demand. Many airlines have been forced out of business as fewer people are travelling by air, as Finance Markets gives information.

Earlier this month, the International Air Transport Association said major airlines continue to suffer amid higher fuel prices, the same source report said. According to the industry group, in the first six months of the year, airlines are likely to have lost £3.7 billion.

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