On Wednesday, Air France-KLM announced a loss of €147 million for the second quarter, forcing the group to declare that it would be cutting up to 1,700 jobs.

The massive second quarter loss represents a five-fold increase on last year’s second quarter loss of €27 million. In the six months of operation up till the end of September the total operating loss for Air France-KLM was a staggering €543 million with the negative impact of fuel hedges being the main cause of the fall.

Air France-KLM is Europe’s largest airline in revenue and claimed that the recession and reduction in premium traffic had severely damaged the carrier. The company reacted quickly to the profit loss announcement, slashing jobs in order to achieve savings of some €700 million. Despite the cost reductions, the airline was still unable to halt declining revenue. The job cuts are part of a group-wide cost reductions exercise which aims to stabilise activity levels.

The voluntary redundancy program that involves the 1,700 roles will begin early next year. The voluntary redundancy comes on the back of plans that already are in place to cut some 3,000 airline jobs by the 31st of March 2010 and is a continuation of the cut-backs rolled out in 2008 which saw the axing of 2,700 jobs by the group in the last financial year. The group has claimed that uncertainty over economic recovery has forced them to be proactive in terms of cost reductions.