Ailing Air France on the brink of collapse

AIR France’s share price has dived after its chief executive quit and the French government warned that the country’s flagship carrier might collapse.

It came as a new strike yesterday over wage demands prompted the cancellation of about 15 per cent of Air France flights worldwide.

The number of striking workers appears to be slightly declining as the airline enters its 14th day of walkouts this year, but the labour action has already cost the company more than £260 million in a matter of weeks.

Air France’s share price plunged nearly 13% at the open yesterday and was trading 10.9% lower at €7.21 in the early afternoon in Paris amid questions about its future.

The share price woes follow the resignation on Friday evening of Air France-klm chief execupacks tive Jean-marc Janaillac after workers rejected the firm’s latest wage proposal.

The Air France drama poses yet another problem for President Emmanuel Macron’s government as he marks a year in office. The industrial dispute come as separate strikes over Mr Macron’s labour reforms are hitting France’s national railways.

Finance minister Bruno Le Maire said the government, which owns 14% of Air France, would not rescue the airline.

He urged striking pilots, crew and ground staff to be “responsible” and said the survival of Air France “is at stake”.

The strikes have taken a heavier toll on Air France than expected, and the company forecast a “notably” lower income this year compared with 2017.

Unions want a 5.1% pay rise this year, arguing that the company is making enough of a profit to meet their demands. They noted that their wages have been frozen since 2011.