Air France-KLM CEO to step down after employee pay vote

  • Air France-KLM CEO to step down after employee pay vote

Air France-KLM CEO to step down after employee pay vote

The vote period ended today, Friday May 4, with 46,771 staff on French contracts at Air France given the chance to have their say electronically on the multi-year pay proposal management had put forward.

Air France CEO Franck Terner, will oversee the day-to-day operations of the company while a successor is found.

The airline's trade union members are planning to walk out for a 14th day on Monday as they press for a 5.1% pay increase this year from their loss-making employer.

Air France-KLM CEO Jean-Marc Janaillac said Friday he would step down "within days" after staff at the carrier rejected a company pay offer aimed at ending a series of strikes in recent weeks.

"I accept the consequences of this vote and will tender my resignation to the boards of Air France and Air France-KLM in coming days", said Janaillac after 55.44 percent of Air France workers voted against accepting a pay rise of seven percent over four years.

The vote came as workers began a 13th day of intermittent strikes Friday, prompting the cancellation of a quarter of flights on average.

"There is inevitably some pain for staff when structural changes are made, but once that is dealt with, you're left with a much healthier company", said aviation consultant John Strickland.

Air France-KLM booked an operational loss of €118m in the first quarter of 2018 as a result of strikes at Air France which cost the combine €75m.

The group warned the dispute would shave at least 300 million euros off its operating profit for the full year, pulling the earnings "notably below" last year's 1.9 billion euros.

Ahead of the vote, French Prime Minister Edouard Philippe had urged both sides "to assume their responsibilities".

She said her union along with the CFE-CGC would probably sign the deal, "but that's not enough, we would need a third union" in order to secure a majority.

"Air France will disappear if it does not make the necessary efforts to be competitive", he warned, ruling out any government intervention to purge the company's debts.