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In early 2003, after a new period of uncertainty, France’s second-largest airline, Air Lib, appears to be on the path to survival. The company is to be relaunched with assistance from the Dutch investment group Imca. However, trade unions have concerns over Air Lib's restructuring plans.
Air Lib has once again been a major business and industrial relations story in early 2003. France’s second-largest airline has been going from one 'stay of execution' to another over the past few years (FR0108160F and FR0109175N). Air Lib’s survival once again hung in the balance during talks over a restructuring and refinancing plan put forward by the company’s chief executive, Jean-Charles Corbet, at the end of 2002 (FR0212103N). In November 2002, repayment of money owed by the airline (EUR 130 million) to the state and social security funds was postponed until 9 January 2003, and the company’s operating licence was extended until 31 January 2003. Air Lib’s chief executive pledged to put forward a restructuring plan and announced investment from the Dutch firm Imca.
The restructuring plan was submitted to the government on 20 December 2002 and received with scepticism by many observers. The plan relied on major assistance from the government and was vague as to the level of investment from Imca. It provided for Air Lib to be reborn as a 'low-cost' airline and for it to abandon overseas territory and département routes, where its losses are heavy, in favour of links with Africa. Mr Corbet asked the government to agree to wipe out the EUR 100 million the company owes to the state and social security funds, 'unless the company’s fortunes take a turn for the better within the next five years'. He also urged the Minister of Transport to ask the European Commission to transform a European Development Fund loan to the company – which the government expects to be repaid – into restructuring assistance.
Imca, Air Lib’s new investor, offered funding to the tune of EUR 172 million over three years, but with only vague commitments for the period after the government bail-out. In an attempt to improve productivity, 136 extra redundancies out of a total workforce of 2,500 were planned, as well as a major review of the working conditions of flight crew.
This plan was rejected by the government, which demanded a 'genuine restructuring plan with one or several new investors' (according to the Secretary of State for Transport), and also worried the trade unions, which feared bankruptcy procedures.
A revised restructuring plan was eventually submitted to trade unions during an extraordinary works council meeting on 6 January 2003 and to the government on 8 January. The new version provides for a financial commitment from Imca, the renewal of the company’s fleet of aircraft (the purchase of approximately 30 Airbus planes is currently under negotiation). The request for debt exemption has been replaced by a rescheduling scheme, coupled with a request for the extension of Air Lib’s operating licence beyond 31 January 2003 and the opening of routes to Africa.
The company’s management plans to create separate subsidiaries for its various operations (long- and short-haul routes, 'low-cost' travel and service staff). This has led to fears among trade unions that various sectors or branches may be sold off piecemeal. The General Confederation of Labour (Confédération générale du travail, CGT) sees this as the most catastrophic outcome for employees. Discussions with trade unions, especially those dealing with Imca's productivity demands, have been very tense. Imca’s chief executive, Erik De Vlieger announced in advance his intention to withdraw his offer if Air Lib’s employees failed to accept his productivity demands.
The government finally agreed to allow the Créteil court to attempt to conciliate over the restructuring plan. An agreement, under the supervision of a designated conciliator, was reached on 31 January 2003 on the issue of the level of Imca investment, the repayment of Air Lib debts and the resumption of current repayments. The airline’s operating licence was extended to 5 February 2003 pending a more permanent arrangement.