Air France-KLM boss resigns after defeat in salary dispute

air francePARIS (dpa-AFX) – After a major defeat in the tariff dispute at the French airline Air France, CEO Jean-Marc Janaillac resigns. In a staff survey, a majority voted against the recent salary proposal of the management. Janaillac, who took less than two years, the helm of the French-Dutch company Air France-KLM, then announced on Friday its departure. The 65-year-old had linked his professional future with the result of the vote.

“13 strike days and more than two months of conflict have weakened Air France,” he said. “This is an enormous waste that our competitors can only rejoice (…).” The business of the company was running better after difficult years of restructuring recently.

The Paris government appealed to “everyone’s sense of responsibility to allow the company to continue its development”. The French state owns a good 14 percent of Air France-KLM. It is now up to the Board of Directors to define the conditions for a way out of the crisis. The committee meets on Wednesday, where Janaillac wants to submit his resignation.

The Lufthansa competitor estimates the costs so far of the strike in France to at least 300 million euros – more than half of what Air France contributed last year to the operating profit. With the employee survey, the top management actually wanted to find a way out of the impasse. But now a good 55 percent voted No, with 80 percent of Air France employees involved.

The French unions are demanding an immediate salary increase of 5.1 percent for Air France employees after the group’s 2017 earnings increase. The company had offered 7 percent stretched over four years. The Dutch sister airline KLM was not affected by the strike that started at the end of February.

A part of the unions think that the austerity efforts of the past years must be reimbursed now, said Janaillac. “That’s not economically possible, and that would be a suicide,” he said, referring to the competitive situation.

David Lanfranchi of the cabin crew union SNPNC welcomed the result of the vote. The company has tried to bypass the unions, he told the German Press Agency. Profits would not be distributed in an acceptable manner.

The strikes of pilots and other employees cost already 75 million euros in the first quarter and pushed the group thus more deeply into the minus. From January to March, Air France-KLM posted an operating loss of € 118 million, down from € 33 million in the same period last year. The bottom line was even a loss of 269 million euros.

The situation is completely different for the British Airways parent company IAG. However, IAG boss Willie Walsh beats around with the Norwegian budget airline Norwegian, who does not want to be swallowed cheap by IAG. Two bids submitted by IAG had underestimated the airline and its prospects too low, the Norwegians said Friday in Fornebu. In addition to British Airways, IAG already includes the Spanish airlines Iberia and Vueling, the Irish Aer Lingus and the new low-cost long-haul airline level.

The actual business at IAG was brilliant in the first quarter. Thanks to higher ticket prices, the Group posted an operating profit of € 280 million, 75 percent more than a year earlier, apart from one-time effects. The bottom line even jumped from 72 to 794 million euros in the amount.

Classic airlines such as Lufthansa, British Airways and Air France-KLM have been battling with low-cost airlines such as Ryanair and Easyjet for years. Like IAG with Vueling and Level, Air France-KLM has its own low-cost spin-off with Transavia and Joon.

 

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