Royal Air Maroc cuts staff and adds new aircraft to counter losses

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State owned airline Royal Air Maroc will cut more than a thousand jobs and introduce new aircraft into its fleet over the next several years as part of a broader restructuring process aimed at mitigating the carrier’s financial losses.

According to the Centre for Aviation, Morocco’s flag carrier may be losing up to 2 million euros a month, partly due to high oil prices and declining passenger numbers (which dropped 11% year-on-year in May after a tourist café was bombed in April). Arabian Aerospace reported that losses may amount to US$100 million for this financial year.

Making matters worse is massive competition from low cost carriers following an open skies agreement with the European Union. The carrier has also neglected its central, eastern and southern African routes, allowing Middle Eastern carriers to fill the gap.

To reduce costs, the carrier is instituting a voluntary redundancy plan for its employees. Of the 5 300 people working for the carrier, 1 560 will resign by 2013. Redundancy packages will be partially funded by the sale of some non-aviation assets. To further reduce staff costs, the airline has cancelled 2011/2012 registrations for its School of National Airline Pilots. CEO Driss Benhima believes the staff restructuring will “turn around and develop the company” which as been in a “critical situation” since the beginning of the global economic recession.

Adding new, more efficient aircraft into its fleet will reduce Royal Air Maroc’s operating costs. Last month the airline became the first in the world to operate the new ATR 72-600 model when it received its first two aircraft. By September next year the carrier will have received its first Boeing 787 Dreamliner, four of which are on order.

Royal Ai Maroc also has 13 Boeing 737-800s on order, allowing the airline to retire its ageing 767s, 737-400s and –500s. The airline officially announced it will reduce its fleet size due to its financial situation – according to Air Journal, it will place eleven aircraft in storage.

The government has a majority stake in Royal Air Maroc but may partially privatise the airline with a 30% stake by a foreign carrier. There have been reports that the airline and the Moroccan government have approached Air France-KLM, Iberia and Emirates.



Other restructuring will involve shutting down some unprofitable routes, restructuring senior management and re-focusing Royal Air Maroc’s activities around its hub in Casablanca, IFTW reports.