Air France shares in tailspin after CEO quits

  • Air France shares in tailspin after CEO quits

Air France shares in tailspin after CEO quits

KLM CEO Jean-Marc Janaillac has resigned as the airline faces another round of flight-disrupting strikes this week.

On Friday Air France-KLM's chief executive quit over the crisis.

(The government of France owns a 14 percent stake in Air France - KLM).

Shares were down almost 10 per cent as investors continued to lose faith in the airline, which has been battered by three months' worth of strikes over pay and working conditions. There have been strikes at the SNCF rail organization too.

British Airways and Lufthansa have already undergone heavy cost-cutting in recent years, amid rising competition from low-priced airlines and carriers from the Gulf states.

Bruno Le Maire's warning that Air France could "disappear" comes as staff begin another round of industrial action over a pay dispute.

The rejection by the unions of a 2% wage increase for 2018 led to the call of a third strike this month and the company announced the cancellation 15% of flights this Monday.

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".

Air France-KLM posted a first quarter operating loss of €118 million ($141 million) last week, attributing €75 million of that loss to the strike impact.

On Sunday, Mr. Le Maire disclosed to French news channel BFM: "I approach everybody to be mindful: group, ground staff, and pilots who are requesting unjustified pay climbs".

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

The government of French president Emmanuel Macron is involved in its own ongoing battle with broad swaths of society which are resisting economic reforms.

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 300 million euros (£260 million) in a matter of weeks.

'Air France will disappear if it does not make the necessary efforts to be competitive, ' he warned.