Joint Airlines Air France-KLM Shares Fell Four Percent
Joint Airlines Air France-KLM Shares Fell Four Percent. Shares of Air France-KLM fell 4% on Friday in response to the hostile reception of the unions by the company's new chief, Benjamin Smith, while Dutch pilots of the airline threatened to attack working conditions.
The unions representing the workers of the French company were openly hostile to the appointment of Smith, COO in Air Canada, accusing the group of surrendering control to a foreigner and not protecting the interests of Air France.
Smith, who will occupy his post before the end of September, will have to deal with labor problems at Air France that have cost the airline 335 million euros so far this year, forced the resignation of its predecessor and saw its 36% shares in 2018.
French unions must discuss another round of strike action in August. 27
Meanwhile, in the Netherlands, the Dutch pilots union VNV said it would attack unless the airline's management presents improved offers to ease its workload. The union said work breaks could begin within four weeks after it rejected a last-minute offer made by KLM late on Thursday. He wants the Dutch arm of Air France-KLM to start hiring new flight personnel as soon as possible, to give pilots more time between flights.
KLM said that it was already recruiting new staff, but that it was impossible to meet all the demands of the union. Air France took over KLM in 2003 when the Dutch airline was struggling, but the two companies have continued to operate independently.
Air France-KLM said in May that it expected earnings to fall this year due to the effect of strikes on its French business. The French government has a share of around 14% in Air France-KLM, while Delta Airlines and China Eastern Airlines each have an 8.8% share.
In a research note entitled "New CEO - New solutions to old problems", the financial services company Société Générale welcomed the appointment of Smith but kept his recommendation to "sell" on the shares of Air France-KLM.
"[Smith] played a key role in Air Canada's growth and modernization strategy in recent years, redefined AC's core strategy and was also a driving force behind AC Rouge's successful low-cost brand," wrote SocGen. .
He noted that Smith's predecessor, Jean-Marc Janaillac, encountered union resistance when the work began. In the end, Janaillac lasted two years before quitting after the Air France personnel rejected their latest offer of salary increase. "We hope that history does not repeat itself, otherwise having a non-French CEO will be the least of the concerns of the group and [French] employees," SocGen wrote.
The unions representing the workers of the French company were openly hostile to the appointment of Smith, COO in Air Canada, accusing the group of surrendering control to a foreigner and not protecting the interests of Air France.
Joint Airlines Air France-KLM Shares Fell Four Percent, pic: Boeing 787-9 Dreamliner
The shares of Air France-KLM are among the stocks with the worst performance in the Paris SBF-120 index. "Boosting the price of the shares is essentially the dissatisfaction of the unions," said Meriem Mokdad, fund manager at Roche-Brune Asset Management, based in Paris.Smith, who will occupy his post before the end of September, will have to deal with labor problems at Air France that have cost the airline 335 million euros so far this year, forced the resignation of its predecessor and saw its 36% shares in 2018.
French unions must discuss another round of strike action in August. 27
Meanwhile, in the Netherlands, the Dutch pilots union VNV said it would attack unless the airline's management presents improved offers to ease its workload. The union said work breaks could begin within four weeks after it rejected a last-minute offer made by KLM late on Thursday. He wants the Dutch arm of Air France-KLM to start hiring new flight personnel as soon as possible, to give pilots more time between flights.
KLM said that it was already recruiting new staff, but that it was impossible to meet all the demands of the union. Air France took over KLM in 2003 when the Dutch airline was struggling, but the two companies have continued to operate independently.
Air France-KLM said in May that it expected earnings to fall this year due to the effect of strikes on its French business. The French government has a share of around 14% in Air France-KLM, while Delta Airlines and China Eastern Airlines each have an 8.8% share.
In a research note entitled "New CEO - New solutions to old problems", the financial services company Société Générale welcomed the appointment of Smith but kept his recommendation to "sell" on the shares of Air France-KLM.
"[Smith] played a key role in Air Canada's growth and modernization strategy in recent years, redefined AC's core strategy and was also a driving force behind AC Rouge's successful low-cost brand," wrote SocGen. .
He noted that Smith's predecessor, Jean-Marc Janaillac, encountered union resistance when the work began. In the end, Janaillac lasted two years before quitting after the Air France personnel rejected their latest offer of salary increase. "We hope that history does not repeat itself, otherwise having a non-French CEO will be the least of the concerns of the group and [French] employees," SocGen wrote.
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