Air France – KLM CEO Resigns

Air France – KLM CEO today announced in a press conference in Paris that he would tender his resignation at a board meeting on May 9 after employees had voted against the wage rise proposal on an online poll.

Air France - KLM CEO Resigns

Air France pilots have been striking already on 13 days this year and there are two further days of strikes next week. 55% of the employees voted against the proposal that the management had put forward. The employees demand 5.1% pay rise in 2018 alone.

Here’s the press release from Air France – KLM:

On 20 April 2018, Chairman and CEO of Air France-KLM Jean-Marc Janaillac launched a consultation with all Air France staff to ask them their opinion on the multi-year pay agreement open for signature on 16 April 2018.

This consultation was launched to allow the company to find a way out of the deadlock situation following 13 days of strike action incurring serious consequences for customers, staff and the company, which has generated losses already amounting to at least 300 million euros.

Between 26 April 2018, and today, 4 May 2018, the 46,771* staff at Air France were able to express their opinion in an electronic voting process supervised by a corporate voting professional, the proceedings of which are governed by the law in the presence of a bailiff.

With a participation rate of 80.33% in this consultation, 55.44% of employees have voted “no”.

As a result, the pay agreement proposal of 16 April ensuring a 7% wage increase over 4 years, including a 2% increase in 2018, is no longer valid.

As Jean-Marc Janaillac has announced, he will draw the personal conclusions of the results of this consultation. He will convene meetings with the Air France-KLM and Air France Boards of Directors on 9 May and will submit his resignation. It will be their responsibility to take the appropriate measures to ensure the continuity of the group and Air France during the transition period.

The management of Air France, under the direction of its CEO Franck Terner, will oversee the day-to-day operations of the company.

*Air France staff working under a French employment contract.

Here’s an excerpt from BBC (access their article here):

Air France-KLM chief Jean-Marc Janaillac has announced his resignation after French staff at the strike-hit airline rejected a new pay deal.

“I accept the consequences of this vote and will tender my resignation to the boards of Air France and Air France-KLM in coming days,” he said.

In a ballot, 55% of the French employees rejected the deal.

In the ballot, company employees rejected a 7% pay rise over the next four years.

They have been demanding a 5.1% increase in 2018 instead – in a dispute that began in February.

And here’s an excerpt from Reuters (access their piece here):

Janaillac was appointed CEO of Air France-KLM in June 2016 after his predecessor failed to reform the airline in the face of union resistance.

Liberum analyst Gerald Khoo said ahead of the vote result that a rejection of the offer would suggest that Air France was incapable of being reformed.

“Losing two consecutive CEOs who have taken significantly different approaches to the unions would imply the business is unmanageable,” Khoo said.

Conclusion

France has been facing many transportation related strikes this spring. Railway workers have been striking constantly and then there is this Air France pilot strike with no end in sight.

Unions are strong in France and there is inherently nothing wrong with that. They should, however, understand that it is in their long term benefit too that Air France can grow and succeed.

US airlines are printing money at the moment and both British Airways and Lufthansa are doing ok while Air France is in the red. And this is in the top of the cycle. Doesn’t bode well when there is the next downturn that will come eventually.

I am in Europe at the moment and was buying flights earlier this week. There were some Air France options that I just skipped. The airline is just too unreliable with these never ending strikes at the moment to issue tickets when there are alternate options.

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