Air France-KLM names interim execs after abrupt CEO resignation
The board of directors of Air France-KLM has set up a temporary governance. Anne-Marie Couderc has been appointed as non-executive chairman of both Air France-KLM group and Air France boards. She will be supported by a management committee within the group: former Finance Director Frederic Gagey will act as CEO of the group, Franck Terner as CEO of Air France and Pieter Elbers as Chairman of the Board at KLM.
On May 15, 2018, CEO Jean-Marc Janaillac officially presented his resignation to the board, eleven days after 55,44% of Air France employees refused the draft agreement for a multi-year wage increase.
This temporary governance is set up for “the shortest-possible period” while the nomination committee board is looking for a long-term replacement for Janaillac to present to the board. The new CEO will have to face the ongoing social struggle that Air France is experiencing. In the meantime, the management of the airline will not be able to negotiate with the unions and modify the strategic plan which was already approved, as stated by the board.
In the Netherlands, KLM workers are frustrated and concerned about the unrest in their sister company. Their reaction shows the social and cultural differences between the two countries. “Asking for a raise from the top of the barricade and waving a flag is absurd,” declared Robert Swankhuizen, head of the Dutch Association of Aviation Technicians (NVLT) to AFP, “in the Gulf States they are now celebrating, they will take some of our shares on the European market”. But KLM director Pieter Elbers told the Dutch unions that separating the two companies was not thinkable, as they are now “too intertwined” with each other.
Unions have been asking for a 6% wage increase following a profitable year in 2017. The group Air France-KLM saw a raise of 42% in its operating profit in 2017. Of the 1.488 billion euros profit, only 588 million came from the French part.
An adviser to Emmanuel Macron told reporters on May 15, 2018, that the French government has no intention to reduce its 14.3% stake in Air France for now. However, this may change in the long run. On May 6, 2018, the French Minister of Economy Bruno Le Maire had already announced that the government would not bail out Air France.
The last official action of Jean-Marc Janaillac before resigning was to sign the final agreement on the joint venture between Air France-KLM, Delta Air Lines and Virgin Atlantic. Air France-KLM will acquire a 31% share in Virgin Atlantic for €250 million, while Virgin Group will keep a 20% share and the direction of the company. Delta should keep the 49% stake it already acquired. The joint venture will represent 25% of the transatlantic market. The agreement has yet to be approved by the authorities for civil aviation.