Air France-KLM plans to continue scaling back its employee headcount as there is no sign of a rebound in business this summer or even this autumn, Chief Executive Pierre-Henri Gourgeon said Thursday.

"We will keep reducing headcount...at a similar rhythm in the years to come," Gourgeon told the annual shareholder meeting here. He was referring to the 2.5% reduction in jobs in the fiscal year ended March 31, 2009.

To reach that headcount reduction target, Gourgeon said,Air France-KLM will use early retirements, sabbaticals, more temporary work contracts and increased mobility of its employees between different activities and regions.

The executive also told shareholders the company's fuel bill, after hedging, will rise over the current and following two fiscal years.

He said Air France-KLM expects to spend EUR6.8 billion on fuel in fiscal 2010 ending next March 31, then EUR8 billion for fiscal 2011 and EUR8.5 billion in fiscal 2012.

He added the company expects to save $1.8 billion this fiscal year due to the recent decline in oil prices. The ultimate size of the savings, however, will depend on the dollar's exchange rate with the euro, he added.

Separately, supervisory board chief Jean-Cyril Spinetta said Air France is still studying introducing train passenger services in France in partnership with the big French transport and environmental services group Veolia Environnement SA (VE). But he said the companies haven't yet determined how profitable such a venture would be.

Spinetta also said he doesn't expect an improvement in the global economy in the coming months. "This is why we decided not to grant a dividend," he told shareholders.

(online.wsj.com)