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Russia's Aeroflot Says Plans Job Cuts

The airline employs 15,000 people
MOSCOW (Reuters) -- Russia's Aeroflot is planning job cuts to reduce costs during the downturn, Chief Executive Vitaly Saveliev said on June 20, while another executive said the company had 30 percent more staff than needed.

"We are prepared to reduce our personnel, but we are trying to do it in a considerate manner," Saveliev told reporters.

Sergey Aleksashenko, a member of the board of directors, said the company "has about 30 percent more employees than it needs."

Like many of its international rivals, Aeroflot is struggling to lower costs in response to declining passenger figures as consumers reduce air travel during the recession.

The airline, in which the state holds 51 percent, employs about 15,000 people.

Aleksashenko said the company could lay off pilots who fly Soviet-era planes such as the Tupolev-154 as it adds more Boeing and Airbus aircraft to its fleet.

Separately, Interfax reported that Saveliev told shareholders at the June 20 AGM its Aeroflot Nord and Don regional units could go bankrupt.

He said both companies have until July 15 to draw up reorganization plans and if they fail to do so Aeroflot's board of directors would discuss the possibility of bankruptcy.

Shareholders approved a 2008 dividend payout of 199.9 million roubles ($6.43 million), less than the 700 million rouble total payout recommended by the board in May.