Air France shares slide amid CEO's resignation, continued strike action

08 May, 2018, 01:37 | Author: Roderick Gutierrez
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It was estimated that about 14 percent of Air France pilots, about 18 percent of flight crews and 10 percent of ground staff would participate in a strike on Monday.

Le Maire also warned that the state - which owns 14.3 percent of the group - would not serve as a backstop.

The airline announced Monday that almost 85 percent of its flights would operate, including 99 percent of its long-haul flights.

After a protracted financial slump, Air France-KLM profits climbed past year as it expanded its global alliances and launched a new budget airline.

Air France-KLM Group tumbled in Paris trading after the resignation of chief executive Jean-Marc Janaillac last week threw Europe's biggest airline into disarray, with strikes continuing and senior politicians warning that the company's survival is at stake.

At Air France - which is part of an airline alliance with Dutch carrier KLM - the labor dispute intensified on Friday when staff rejected a pay deal worth seven percent over four years.

The stock was down 13.3 per cent at 7.02 euros by 0810 GMT.

The announcement of Janaillac's departure came as Air France-KLM released its first-quarter earnings, which showed a net loss of 269 million euros ($322 million), weighed down by three days of strikes which cost about 25 million euros per day according to the company.

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". Even before today, the shares had lost 40 per cent in value, making it the worst performer on the 26-member Bloomberg World Airlines Index.

At the request of the board of directors, Janaillac will remain in his role as CEO and Chairman until the end of the company AGM on May 15 when "an interim governance solution" will be announced. The company declined to comment further on what format that would take or how long the transition would last.

"If Air France does not become more competitive. There are still no meetings planned for further negotiations", Philippe Evain, leader of the SNPL pilots union told RTL radio.

Staff and management at the carrier have been locked in a dispute over pay since February. However, the French government assured that it will not be responsible for the company's losses.



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