Air France shares fall after new strike threat
Issued on: Modified:
Shares in Air France slumped on Monday morning after a pilots' union leader threatened new strikes if the company's new boss refuses to negotiate a pay rise. The company has been without a CEO since May and Air Canada's Benjamin Smith is said to be the favourite to take over the reins.
Air France-KLM shares fell 5.27 percent to 8.478 euros as trading opened in Paris on Monday.
They have fallen about 40 percent since the beginning of the year as the company has chalked up heavy losses due to 15 days of staggered strikes by unions demanding pay rises.
In an interview on Sunday Philippe Evain, of the pilots' union SNPL, threatened 15 more days of strikes if the company refuses to reopen negotiations on the unions' demand.
Former CEO Jean-Marc Janaillac resigned in May after an employee ballot he organised himself rejected the company's pay offer.
His successor should be appointed at the end of this month or the beginning of September.
Last month the board offered to triple the CEO's salary to attract candidates.
Canadian reported favourite
The favoured candidate is Benjamin Smith, the deputy head of Air Canada, according to Le Monde newspaper.
Evain criticised the alleged choice, saying it was "a shame that we can't find a French CEO for Air France".
"With this nomination we are pleasing the Americans and the Chinese and I'm not sure it is in the interests of Air France or of French passengers," he told Le Parisien newspaper, adding that it would allow some executives who should have left with Janaillac to stay because of Smith's ignorance of the European market and the way the company works.
Smith, who started his career with regional airline Air Ottawa in 1990, joined Air Canada in 2002 and is best known for developing its low-cost arm, Air Canada Rouge.
He has a reputation for putting shareholders' interests first and has little experience of industrial disputes, according to Le Parisien.
The representative of pilot-shareholders on the Air France-KLM board, Paul Farges, wrote in another newspaper on Sunday that the company does not need any more "candidates who are ambassadors of outside interests".