Air France-KLM is to cut as many as 1,200 jobs after weak ticket revenues and dwindling cargo volumes forced a sharp rise in third-quarter losses to €200 million. The Franco-Dutch group unveiled a cost-cutting programme of €1.2 billion. The job cuts, which will include some 450 managers, will be through natural attrition and no one will be fired, spokesman Nicolas Petteau promised.

“Activity in the third quarter reflected the increasing severity of the economic downturn,” Air France said in a statement. “We will continue to assess all our costs in order to achieve additional savings wherever possible.”

The group registered a €194 million operating loss in the three months to December 31. The fall in cargo, down 20 percent, was the biggest contributor to the loss.

However long-haul traffic was more stable, down 1.9 percent in January, mainly because of a fall-off in short-haul bookings. The company said it would reduce capacity by two percent this summer due to a deteriorating economic outlook.

It also confirmed that its annual forecast, ending in March, would be significantly lower than the Euro 1.4 billion for 2007-2008 but still in the black. However markets had already factored in the news and shares in Air France rose over 5 percent in early trading.