Tensions rise at Air France-KLM over CEO

Flap brings to the fore long-simmering tensions

Just as Air France-KLM looks set to turn the page on last year’s crippling labour strife, the carrier is facing a revolt by its Dutch arm.

A tussle over the reappointment of Pieter Elbers, who leads the KLM unit, sparked a noisy demonstration of support on Thursday for the executive from staffers, managers and even Dutch officials, including a petition signed by more than 25,000 employees.

The show of force followed news that Air France-KLM’s new CEO, Ben Smith, was considering replacing Elbers on the grounds that he might not be fully behind plans to strengthen ties between Air France and KLM. The flap brought to the fore long-simmering tensions between the French and Dutch carriers, which joined in a 2004 merger, but operate semi-independently.

Labour accords

“There is a new top man at the firm who is obviously working on the strategy,’’ Dutch Prime Minister Mark Rutte said at a press conference in The Hague on Friday. “The Dutch government, we must try to act to ensure that the decisions within the company are taken in line with what was previously agreed during the merger and in line with Dutch interests.”

Smith, a former Air Canada executive, took over in September and quickly struck landmark deals with labour representatives, ending a bout of unrest that resulted in costly French strikes last year. An accord with pilots could be next: The results of a referendum over a union-backed pay and benefits proposal will probably be known on Tuesday.

A day later, Air France-KLM is likely to report an annual profit, even after the strikes in France cost it an estimated €335 million (Dh1.38 billion).

Now Smith, 47, wants to bring Air France and KLM closer. While some departments are integrated, others, including aircraft purchasing, still operate separately. To that end, Smith is seeking to join the supervisory board of KLM.