Air France-klm CEO to quit as staff ‘push self-de­struct but­ton’

Strikes con­tinue to take toll on the air­line group and will wipe out €300m in profit, writes Ania Nuss­baum

Sunday Independent (Ireland) - Business & Appointments - - FRONT PAGE -

THE Air France-klm Group was thrown into dis­ar­ray on Fri­day af­ter CEO Jean-marc Janaillac said he would re­sign fol­low­ing the re­jec­tion by work­ers of a wage of­fer aimed at end­ing a se­ries of crip­pling strikes.

The air­line boss “will con­vene meet­ings with the Air France-klm and Air France boards of direc­tors on 9 May and will sub­mit his res­ig­na­tion,” the com­pany said in a state­ment.

About 55pc of staff who voted re­jected the pro­posal in an on­line poll. The air­line has faced 13 days of labour ac­tion by pi­lots, cabin crew and ground staff since Fe­bru­ary 22.

A “no” vote amounts to press­ing “the self-de­struc­tion but­ton”, RBC an­a­lysts wrote in a note be­fore the re­sults were known.

While the out­come isn’t legally bind­ing, it will boost the ne­go­ti­at­ing po­si­tion of unions at the French arm of Air France-klm Group.

A ma­jor­ity of labour rep­re­sen­ta­tives have to ap­prove any wage deal for it to take ef­fect. Man­age­ment of­fered a 7pc in­crease over four years, while unions were push­ing for a 5.1pc rise this year.

Ro­tat­ing two-day walk­outs at Europe’s big­gest air­line have taken their toll, with the car­rier warn­ing last week that full-year re­sults are ex­pected to be “no­tably below” 2017.

The strikes will wipe out at least €300m ($358m) in op­er­at­ing profit while the car­rier’s fuel bill will be €350m higher and the stronger eu­ros will also have a neg­a­tive im­pact. Shares dropped the most in six months.

“A bad pro­posal re­mains a bad pro­posal,” Bel­tran Ybarra, a rep­re­sen­ta­tive of the main pi­lots’ union, said by phone be­fore the end of vot­ing.

Air France has a his­tory of labour strife, with pre­vi­ous chief Alexan­dre de Ju­niac top­pled amid strikes and vi­o­lent clashes as work­ers sought to re­pel plans for a new low-cost op­er­a­tion based out­side France.

Janaillac had avoided con­flict by fo­cus­ing ef­forts on the new Joon unit staffed by lower-paid cabin crew, be­fore even­tu­ally hav­ing to con­front pay is­sues at the main air­line. Bloomberg

Air France-klm CEO Jean-marc Janaillac at a press con­fer­ence to an­nounce his res­ig­na­tion

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