May 4, 2018
Helen Massy-Beresford
Air France-KLM CEO Jean-Marc Janaillac will submit his resignation next week after a majority of Air France employees rejected a pay proposal in a staff-wide consultation that had been his high-stakes bid to extract the airline from a costly labor relations crisis.
A series of Air France strikes—13 one-day walkouts so far in recent weeks—have cost the company at least €300 million ($359 million). Janaillac
launched the consultation in April in a bid to break the deadlock, saying at the time that he would be “personally accountable for the consequences of the 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. With a participation rate of 80.33%, 55.44% of employees voted "no", Air France said.
“As a result, the pay agreement proposal of April 16 ensuring a 7% wage increase over 4 years, including a 2% increase in 2018, is no longer valid,” the company said, and Janaillac is following through on his promise to be personally accountable.
He will meet the Air France-KLM and Air France boards May 9 to submit his resignation, Air France said in a statement, adding that it would be their responsibility to take the appropriate measures to ensure the continuity of the group and Air France during the transition period, with Air France management, and its CEO Franck Terner, overseeing the day-to-day operations of the company.
The
"growth pact" proposal, which promised a 7% wage increase over four years as well as individual increases, included scope for adjustments if Air France's financial result was less than €200 million ($246 million) and to apply a reversion clause in case of higher inflation or a negative financial result.
Unions led by the main pilots' union the SNPL have been calling for a bigger pay increase to take into account the preceding years of stagnating salaries.
Janaillac took the helm at Air France-KLM in July 2016 and later that year launched
Trust Together, the group’s strategic plan aimed at allowing the Franco-Dutch group to regain the offensive and boost competitiveness in the face of fast-growing rivals. As part of the plan, Janaillac oversaw the creation of new carrier
Joon as well as the signature of a wide-ranging north Atlantic joint venture with Virgin Atlantic and Delta Air Lines and partnerships with China Eastern Airlines, Jet Airways in India and Vietnam Airlines.
The results of the vote and the departure of its CEO come on the same day that Air France-KLM reported
first-quarter results hit by the strike impact, with unit costs up 2.1% at constant currency, fuel and pension charges and 1.7% of that increase related to the strikes. Operating loss widened to €118 million from a loss of €33 million in the first quarter of 2017, with about €75 million of strike impact, the airline said, while it said its 2018 operating profit would be “notably below” 2017’s because of the financial impact of the strikes, currency fluctuations and a fuel bill €350 million ($419 million) higher than the previous year.
More strikes are planned for May 7 and May 8.