Air France shares tumbled in early Monday trade as investors acted on news the airline’s CEO has resigned, as staff unions rejected a pay deal and are continuing their planned strike action. Air France staff are striking on May 7th and 8th as a stale-mate over pay continues.
By 1455 BST, Air France shares were 9.91% lower at €7.29. The stock has been on a broadly downward path since the beginning of the year.
Air France CEO resigns
Jean-Marc Janaillac has resigned his position as CEO and chairman of Air France-KLM. The news came on Thursday May 4th, following the failure of a pay deal put to the airline staff. Janaillac’s resignation was confirmed to the board of directors on Friday May 5th.
Had it been agreed, the pay deal which was put to Air France staff on April 20th would have given them a 7% pay increase over four years including a 2% raise in 2018.
Of the 80.33% of Air France staff who took part in the pay vote, 55.44% voted ‘no’ to the pay deal on offer.
“Following the results of the staff consultation launched on 20 April 2018, Jean-Marc Janaillac, Chairman and CEO of Air France-KLM, has confirmed his decision to resign,” an Air France statement read, Friday.
At the request of the board of directors, Janaillac will remain in his role as CEO and Chairman until the end of the company AGM on May 15 when “an interim governance solution” will be announced.
Air France strikes continue
In the wake of the rejection of Janaillac’s pay deal to Air France staff, a two-day strike over May 7 and 8 has gone ahead.
The Air France passenger website has warned customers that despite presenting an up-to-date flight schedule earlier Monday with 80% of all planned flights still expected to operate, late cancellations due to the strike action could still occur.