Air France plans to reduce capacity on its short-haul routes, faced with increased competition from high-speed rail routes and low-cost airlines.

The carrier said it would reduce short-haul capacity by 15 per cent (in terms of available seat kilometres) by the end of 2021.

The airline posted a loss of €189 million on its domestic network last year, and has cumulatively lost over €700 million in the sector since 2013.

Air France has faced intense competition on domestic routes from high-speed rail service TGV, which the airline said had “increased capacity throughout the country, reduced journey times and developed a very competitive low-cost offer”.

It added that “on routes where high-speed trains connect Paris to the provinces in under two hours, Air France has lost 90 per cent of its market share”.

The situation has been exacerbated by the growth of low-cost airlines such as Easyjet and Ryanair, which Air France says have “set up bases at major airports and have gained ground rapidly with aggressive pricing policies and often with the help of public authorities”.

“Unlike Air France, where 90 per cent of staff are based in France, a majority of these airlines have not contributed to developing employment in the regions where they operate, taking advantage of European mobility and basing employees in jurisdictions with lower labour costs,” continued the carrier.

Air France said that union representatives have been informed of planned voluntary departures, but stressed that there would be no forced redundancies as a result of the reduction in capacity.

The carrier is embarking on a restructuring programme under Air France KLM group CEO Ben Smith, including the closure of low-cost subsidiary Joon, and the rebranding of its regional subsdidiary as Air France by Hop.

Commenting on the news, Smith said:

“The French domestic network is intricately linked to the history of Air France. It guarantees its regional base, and connects the French regions to the rest of the world by offering several thousand daily connection opportunities.

“In a highly competitive marketplace, we are all fully engaged in defending a domestic market that is vital for Air France and also more globally for the Air France-KLM Group.