The plot thickens: Ben Smith faces tensions at KLM and Hop!
Tensions are rising within the Air France-KLM group. Employees of KLM are supporting their CEO Pieter Elbers, whose position is now compromised for questioning the new strategy of the group, advocated by its CEO Benjamin Smith. Meanwhile, Hop! employees aspire to be integrated into their parent company, Air France.
Since his arrival in a group in crisis in September 2018, Air France-KLM chief Ben Smith applied drastic reforms: salary increases, announced disbandment of startup Joon, reduction of the A380 fleet. And so far, the changes seem to at least have appeased the French unionists after years of tensions.
Smith vs Elbers
But Smith’s stated ambition to see Air France and KLM unify through common aircraft orders, alliances and flight programs, faces criticism at the Dutch airline, especially since it reports superior financial results compared to its sister company, while being twice smaller.
That criticism has been voiced by Elbers and supported by his management team and employees. At the helm of the Dutch airline for the last five years, Elbers advocates for preserving KLM’s autonomy. A petition of his initiative collected nearly 18,000 employee signatures. More recently, the Dutch finance minister Wopke Hoekstra expressed his “wholehearted” backing to Elbers. He later met with French finance minister Bruno Lemaire to discuss the problem, but the outcome of their meeting is not known.
Elbers’ opinion might compromise the future within the company. Indeed, his mandate will end on April 2019, and no decision on the future governance of KLM has yet been made.
On February 8, 2019, the KLM group of managers threatened Air France-KLM board with a strike, if Elbers was to be removed. “The possibility of an unexplainable, involuntary departure of our CEO brings a lot of tension in the workforce,” the managers wrote in a letter published by Bloomberg, adding that the move “will certainly lead to social unrest and possible industrial actions.”
The letter also points to what is generally felt as “unilateral decisions” taken by Ben Smith without “a clear strategy for Air France-KLM and the roles of the airlines within the group”. Even after more than 15 years of marriage, distrust seems high between the two airlines.
A decision regarding Elbers’ position should be taken during the next meeting of the Board of Directors of Air France-KLM, on February 19, 2019.
Union trouble at Hop!
Smith is facing another obstacle: the unions of Hop!, Air France’s regional subsidiary. On February 7, 2019, the company announced that the Hop! Air France trademark would be replaced with a new brand Air France Hop. Like Joon, the airline is now destined to offer its services through Air France.
Under these new circumstances, Hop! unions are now demanding that the regional airline employees would benefit from the same status as their Air France colleagues, as revealed by Les Echos. But negotiations might be complicated, as unlike Joon, Hop! pilots have a different status from those at Air France.
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