Air France CEO resigns after employees reject wage offer

Air France CEO resigns after employees reject wage offer

PARIS — Air France-KLM CEO Jean-Marc Janaillac announced his decision to resign Friday as Air France crews and ground staff held their 13th day of strikes over pay and rejected the company’s wage proposal.

In an electronic vote Friday, Air France employees rejected management’s offer for a 2% pay rise this year and additional 5 per cent raise from 2019 to 2021. A report showed that 55% of responders voted against the proposal.

Unions want a 5.1% pay rise this year, arguing that their wages have been frozen since 2011 amid restructuring and noting that the company’s profits are up.

The company argued it must preserve its ability to stay competitive against low-cost airlines and big-spending Mideast and Asian carriers.

“This is a huge waste that can only make our competitors rejoice,” Janaillac said of the failed vote.

Air France-KLM shares fell earlier Friday after the company announced the strikes had already cost the airline at least 300 million euros ($359,000). Air France-KLM also forecast a “notably” lower income this year compared to 2017.

Janaillac, who had been in the post since July 2016, met with the company board Thursday to discuss the quarterly results and the forecast.

After a protracted financial slump, Air France-KLM profits climbed last year as it expanded its global alliances and launched a new budget airline. The growth was helped by years of job cuts and other restructuring efforts.

Janaillac warned last year that volatile fuel prices and geopolitical risks could threaten the company’s turnaround, but didn’t appear to predict the heavy toll that the strikes would take.

Janaillac will formally resign at a Board of Directors’ meeting on May 9, the company said, adding that “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 CEO of Air France, Franck Terner, will oversee the day-to-day operations of the company.

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