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Bloomberg
Air France-KLM Chief Executive Officer Ben Smith marked an early victory just weeks after taking the top job by reaching a pay deal with French unions that had eluded his predecessor.
The accord at the Air France arm includes a wage increase of 2 percent retroactive January 1 and another 2 percent to take effect in 2019, according to a statement.
The agreement came after an acrimonious labour dispute that culminated in the resig-nation of former CEO Jean-Marc Janaillac after his wage proposal was rejected.
Shares in the Paris-based carrier fell 3 percent, taking losses to 39 percent since the start of the year, as investors digested the costs of the salary increases.
The standoff between management and unions, and 15 days of strikes earlier this year had rocked shareholder and customer confidence and cost the airline 335 million euros ($386 million).
The pay deal was signed by a majority of unions, which the airline said represented 76 percent of employees at Air France, but missing among the signatories was the pilots’ union, SNPL. Negotiations between that group and man-agement aren’t over, SNPL spokesman Philippe Evain was quoted as saying by AFP.
Air France-KLM isn’t the only airline in Europe that has faced labour strife this year, with discount carrier Ryanair Holdings Plc also locked in disputes with its employees in countries around the region. The sector is also feeling the brunt of intensifying competition from upstart and low-cost carriers and rising costs due to higher oil prices.