Around 5,000 jobs are to go at Air France-KLM as the airline attempts to stem losses. The job losses are part of a plan to save the flag-carrier €2 billion. The announcement has been made as the carrier tries become more competitive with other international carriers. The new socialist government is likely to face similar announcements from other major corporations.

President Francois Hollande has already set up a specialist unit to combat company closures and redundancies which could hit as many as 45,000 employees. France’s unemployment is already at 10 per cent.

Air France said that it hoped that the job cuts would be made through part-time working, voluntary redundancies and natural attrition. However, the company has not ruled out compulsory job losses. The airline said that it had made a loss of €597 million in the first three months of the financial year.

A recent survey suggests that Air France has operating and fuel costs which are 30 per cent higher than most of its competitors. The airline will be hoping to avoid a conflict with the unions by making the redundancies voluntary.

The new French government is supporting the firm’s decision to make the job cuts voluntary. Labour minister Michel Sapin said the company needed to balance its finances or risk going down.