French Minister Warns: Air France Might ‘Disappear’
Air France-KLM's employee strikes raged into Monday after the latest round of failed negotiations wrapped up on Friday night and forced the resignation of the airline group's top executive.
Air France said 15% of its flights would be canceled Monday due to pilots and cabin crew striking over pay disputes. The workers are demanding a 5.1% pay increase in 2018 — down from their original demand of a 6% raise earlier this year.
Strikes began in early February and have continued in periodic spurts, wrenching the airline's European operations and frustrating travelers. The walkouts, expected to extend to Tuesday, will bring the total days of employee demonstrations to 15. The demonstrations have cost Air France-KLM at least 300 million euro (roughly $359 million) in lost revenue.
"If Air France does not become more competitive ... (it) will disappear," French Finance Minister Bruno Le Maire told a news station in France on Sunday.
The latest failed discussions brought the ouster of the airline group's CEO Jean-Marc Janaillac. The top executive had offered the demonstrating employees a 7% wage increase over four years, starting with a 2% increase in 2018. That proposal was formally rejected by employees on Friday, with 55.44% of staffers voting against it in an online poll.
Amid the stalemate, Janaillac announced he would resign. He had previously said that he would leave his post at the helm of the airline group if the latest round of negotiations did not succeed. "I cannot see how I could stay at the head of the company," he said at a press conference in late April.
Due to the company's turmoil, shares of Air France-KLM dived to their lowest levels since April 2017, falling as much as 14.3% Monday morning. The company's shares are down almost 50% since the start of 2018, Reuters reports. The French government, which is the airline group's largest stockholder with 14% of shares, said it would not offer financial aid to the airline.
Janaillac is expected to formally submit his resignation to the Air France-KLM board in a meeting on May 9. The board said it would have a plan for new management ready by May 15.
Air France's increasingly dire situation is a good reminder of why you should always book with a credit card that offers you protection in case the airline you're booked to travel with goes belly up -- as Air Berlin did in 2017.
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The Capital One Venture X Business Card has all the Capital One Venture X Rewards Credit Card has to offer and more. It offers an incredible welcome bonus and requires an equally impressive spend to qualify. In addition, the card comes with premium travel perks like annual travel credit. (Partner offer)Pros
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- Business owners are also able to add employee cards for free.
Cons
- The card requires significant spending to earn the welcome offer.
- Another drawback is that the annual travel credit can only be used on bookings made through Capital One Business Travel.
- LIMITED-TIME OFFER: Earn up to 400K bonus miles: 200K miles when you spend $30K in the first 3 months, and an additional 200k miles when you spend $150k in the first 6 months
- Earn unlimited 2X miles on every purchase, everywhere—with no limits or category restrictions
- Earn 10X miles on hotels and rental cars and 5X miles on flights and vacation rentals booked through Capital One Business Travel
- With no preset spending limit, enjoy big purchasing power that adapts so you can spend more and earn more rewards
- Empower your teams to make business purchases while earning rewards on their transactions, with free employee and virtual cards. Plus, automatically sync your transaction data with your accounting software and pay your vendors with ease
- Redeem your miles on flights, hotels and more. Plus, transfer your miles to any of the 15+ travel loyalty programs
- Every year, you'll get 10,000 bonus miles after your account anniversary date. Plus, receive an annual $300 credit for bookings made through Capital One Business Travel
- Receive up to a $120 credit for Global Entry or TSA PreCheck®. Enjoy access to 1,300+ airport lounges worldwide, including Capital One Lounge locations and Priority Pass™ lounges, after enrollment
- Enjoy a $100 experience credit and other premium benefits with every hotel and vacation rental booked from the Premier Collection
- This is a pay-in-full card, so your balance is due in full every month