Air France Boss Backs Privatisation

Air France chairman Christian Blanc said he had become an ardent advocate of privatisation for the state-owned carrier and outlined plans for more cost cuts over the next three years, French newspapers reported on Thursday.

"The state is the owner of Air France, (railways) SNCF, Aeroports de Paris and Aerospatiale. In short, it is constantly judge and partisan. It interferes in everything, seeking compromises everywhere and minimising risks. It doesn't have a strategy anywhere," the newspaper La Tribune quoted Blanc

as saying. It said he described himself as a "confirmed advocate of privatisation".

La Tribune and Le Figaro said the carrier planned to replace a three-year programme begun in 1994 with another three-year plan aimed at reducing costs by 15 percent by the end of 1999. It cut costs by 20 percent in the previous plan.

 

Blanc said the new cost-cutting objective was aimed at making the carrier competitive with its European rivals, which are also striving to reduce costs ahead of the liberalisation of the European market in April.

After restoring its finances, Air France should be ready to enter the private sector following the merger of the group with its regional arm Air France Europe, formerly Air Inter, in September, the newspapers said.

Le Figaro said Blanc urged privatisation not only for financial reasons, because the state was an "irregular shareholder", but also because of "difficulties in the relationship with the state". The carrier last month reported earnings of 802 million francs ($153.8 million) for the six months to September 30, compared with a year-earlier loss of 335 million.