50 jobs could go at aircraft maintenance firm KLM UK Engineering

Up to 50 jobs could be at risk at aircraft maintenance firm KLM UK Engineering after a dip in demand.

The company, which employs 397 permanent and 80 temporary staff at its base in Norwich International Airport, has announced a cost reduction programme aimed at saving �1.7m annually.

The firm said the move followed a 'decrease in demand' for aircraft maintenance, coupled with 'downward pressure' on prices in the European aviation market.

The company has confirmed the programme may result in a reduction of 50 jobs, but said it would seek to minimise compulsory redundancies, favouring retirement and voluntary redundancy.

A 30-day consultation with staff has begun and is expected to conclude at the end of the month.

The firm - a subsidiary of KLM Royal Dutch Airlines - maintains aircraft including Boeing 737s, Fokker 100s and Avro RJs for a number of airlines globally.

A statement published on the firm's website last week said the company was seeking to save �1.7m a year, adding: 'A decrease in demand for aircraft maintenance and a downward pressure on the prices in the European aviation market have driven the need for the cost reductions now announced.'

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In an update yesterday the firm added: 'The company can now confirm that the programme included the possibility of a reduction of 50 jobs via retirement, voluntary redundancy and in the last resort compulsory redundancy.

'Company management and employee representatives have been meeting on a regular basis with the intention of minimising job losses by considering alternative propositions.

'Talks will continue during the 30-day consultation period and further details will be released once this has been concluded.'

The cost reduction is not expected to affect the firm's plan to build a new engine testing facility on the airport site, which has been granted planning permission pending a judicial review, expected to start later this year.

KLM UK Engineering's latest published accounts, for the year to March 31 2010, showed a �4.1m dip in turnover to �28.9m, and profit before tax of �1.1m.

Administrative expenses increased by �1.4m over the previous year, mainly as a result of pension scheme costs.

The directors' report in the accounts said: 'The recession has had a limited impact on results though pressure on prices is anticipated to affect results in the following years.'