Walkouts that led to chief executive stepping down on Friday are continuing this week, with about 15 per cent of services scrapped today, as stock drops up to 13 per cent
Air France-KLM shares plummet in aftermath of CEO Janaillac 's resignation
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.
The stock dropped as much as 13 per cent, the most in almost two years. 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.
Walkouts that led to the resignation of Mr Janaillac on Friday are continuing this week, with about 15 per cent of services scrapped today, the airline said on its website. While almost all long-haul flights are predicted to operate, one in five medium-haul services from Charles de Gaulle airport in Paris won’t, with short-haul trips from Orly also affected. Industrial action will continue on Tuesday, the airline said, predicting more disruptions.
Mr Janaillac said he’d hand in his resignation to the board on May 9. Analysts have compared a rejection of management’s pay proposal by workers to “pressing the self destruct button,” and French Finance Minister Bruno Le Maire on Sunday said the worker’s demands were “unjustified”, urging them to show “responsibility.”
Air France said Friday that rising expenses for jet fuel plus a stronger euro will add to the burden caused by a string of walkouts by staff fighting for higher wages. Mr Janaillac had put his job on the line as workers voted on a pay offer by management, a bet he lost as staff rejected the proposal late on Friday.
Travellers should expect last minute delays and cancellations, Air France said, adding it will update its flight schedule for Tuesday later today.