No Canadians: Air France unions want French CEO

Marco Green
August 19, 2018

Air France-KLM named Air Canada executive Benjamin Smith as its new boss on Thursday, opting for an outsider to steer the airline group through a fraught stand-off with unions at its French carrier.

"We're still determined to succeed in our demands", Vincent Salles, a representative of the CGT union, said in an interview Friday on France Info.

The thrust of global media coverage at the time this report went to press focused on the unions" frosty reception to the Group's appointment of its "first' foreign CEO.

Air Canada's Benjamin Smith will assume his position as Air France-KLM CEO by September.

Widely tipped in the French media to be unveiled as the new CEO later on Thursday after a board meeting, Smith won approval from the French government which retains influence over the group through its 14.3-percent shareholding.

Smith said he is "well aware of the competitive challenges" the group is facing.

"I am well aware of the competitive challenges the Air France-KLM Group is now facing and I am convinced that the airlines' teams have all the strengths to succeed in the global airline market", Smith said in a release.

As chief operating officer at Air Canada, Smith has experience of sensitive labour negotiations, having led talks with pilots' and flight attendants' unions ahead of the launch of low-priced operator Air Canada Rouge.

But his proposed salary, reported to be several times higher than that of Janaillac, could also undermine goodwill towards him from employees, who have suffered years of cutbacks and job losses.

Known to speak French, Smith has a track record in dealing with unions, and was the main negotiator in talks with pilot and cabin crew staff at Air Canada that resulted in a 10-year agreement in 2015.

KLM's chief executive Pieter Elbers congratulated Smith on his appointment. I am confident in the Group's capacity to become one of the world's leading players.

He is replacing Jean-Marc Janaillac, who quit as CEO of Air France-KLM in May after staff rejected his offer of a pay deal aimed at stopping a wave of strikes. He has played a major role at Air Canada over the past two decades, where he has been a key player in the airline's economic and commercial development, its transformation, its value creation and the engagement of the teams.

Smith's nomination could also be accompanied by a shake-up of the company's governance, with the splitting of the roles of chairman and chief executive, which were previously held by the same executive at the company.

Air France shares have plunged more than 35 percent since the start of the year, although they have stabilised since Janaillac's departure.

The company estimates the strike cost it 335 million euros ($381 million) in the first half of the year.

Unions are seeking a 6 percent pay rise. Operating profits have droped from €593 million in the second quarter of 2017 to €109 million in the second quarter of 2018.

Other reports by Click Lancashire

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