Balladur welcomes airline 'victory'

EDOUARD Balladur yesterday welcomed an Air France staff 'referendum' which overwhelmingly approved the airline's restructuring plan as a victory for the methods of France's conservative government.

Monday's polling of the 42,645 Air France staff drew a line under one of the most painful episodes in the one-year life of Mr Balladur's government. In October, after ground staff from the airline invaded the runways at the Paris airports, the government withdrew the earlier plan, prompting the resignation of Bernard Attali, then the Air France president.

That performance is now seen as the first in a series of retreats by the Gaullist Prime Minister when faced with social conflict. The original plan provided for 4,000 job cuts, whereas the proposal of the Air France chairman, Christian Blanc, envisaged the loss of 5,000 jobs, but all by natural wastage and with no redundancies.

The use of a staff referendum was a slap in the face for some of the trade unions that opposed the plan in traditional negotiations. Approval was needed for the government to provide 20bn francs (pounds 2.3bn) in state funds over three years for an airline with debts of FFr38bn and an estimated loss of FFr7.5bn last year.

British Airways has protested to the European Commission about the plan but Abel Matutes, the commissioner concerned, who was in Paris yesterday, said there was 'a good chance that the plan will be approved'.

Air France's problems had raised the real possibility that the airline would go bankrupt, like Pan Am, something almost unthinkable in dirigiste France. One economic magazine this week carried the question on its cover: 'France without Air France?'

Mr Balladur said in a statement that the success of the Air France referendum, in which 81.26 per cent of those who participated voted for Mr Blanc's plan, had boosted 'the method the government has chosen'. He added that 'the policy of reform can be successful only with the participation of the greatest number'.

Air France said that 83.55 per cent of its employees had voted in the referendum.