Air France tumbles as CEO prepares to quit

Bloomberg

Air France-KLM Group is facing its biggest crisis in years as CEO Jean-Marc Janaillac prepares to quit amid a deepening labour conflict that the French government has warned is threatening its very survival.
The stock dropped as much as 14 percent, the most since 2002. Even before today, the shares had lost 40 percent in value this year, making it the worst performer on the 26-member Bloomberg World Airlines Index.
The carrier was thrown into disarray when Janaillac said he planned to submit his resignation to the board on May 9 after workers rejected his final wage offer — an outcome that even caught some unions by surprise.
Yet their defiance continued on Monday as another two-day strike got underway and the airline scrapped about 15 percent of services.
Air France-KLM has already warned the labor action that started in February will wipe out at least $358 million in operating profit this year.
While the airline maintained almost all long-haul flights during the latest walkout, it was forced to cancel one in five medium-haul services on Monday from Charles de Gaulle airport in Paris and short-haul trips from Orly were also affected, according to its website.
Further disruptions are predicted on Tuesday as the industrial action is scheduled to continue.
Janaillac, who has been at his post less than two years, used a less confrontational approach than his predecessor Alexandre De Juniac.

‘Air France may disappear if unions block reforms’
Bloomberg

French Finance Minister Bruno Le Maire warned that excessive salary demands and strikes by unions at Air France-KLM Group could sink Europe’s largest airline.
“If it doesn’t make the necessary efforts to be at the same competitive level of Lufthansa and other major airlines, it will disappear,” Le Maire said on BFM TV. The union’s salary demands are “unjustified” and employees must show “responsibility,” he said.
CEO Jean-Marc Janaillac will resign after failing to reach a wage agreement with employees. Air France shares dropped the most in six months after the company said full-year results may fall short of 2017 levels due to rising fuel prices and the strong euro.