French Minister Warns: Air France Might ‘Disappear’

May 7, 2018

This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. Terms apply to the offers listed on this page. For an explanation of our Advertising Policy, visit this page.

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.

Featured image by GEOFFROY VAN DER HASSELT/AFP/Getty Images.

Chase Sapphire Preferred® Card

WELCOME OFFER: 80,000 Points


CARD HIGHLIGHTS: 2X points on all travel and dining, points transferrable to over a dozen travel partners

*Bonus value is an estimated value calculated by TPG and not the card issuer. View our latest valuations here.

Apply Now
More Things to Know
  • Earn 80,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $1,000 when you redeem through Chase Ultimate Rewards®. Plus earn up to $50 in statement credits towards grocery store purchases within your first year of account opening.
  • Earn 2X points on dining including eligible delivery services, takeout and dining out and travel. Plus, earn 1 point per dollar spent on all other purchases.
  • Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards®. For example, 80,000 points are worth $1,000 toward travel.
  • With Pay Yourself Back℠, your points are worth 25% more during the current offer when you redeem them for statement credits against existing purchases in select, rotating categories.
  • Get unlimited deliveries with a $0 delivery fee and reduced service fees on eligible orders over $12 for a minimum of one year with DashPass, DoorDash's subscription service. Activate by 12/31/21.
  • Count on Trip Cancellation/Interruption Insurance, Auto Rental Collision Damage Waiver, Lost Luggage Insurance and more.
  • Get up to $60 back on an eligible Peloton Digital or All-Access Membership through 12/31/2021, and get full access to their workout library through the Peloton app, including cardio, running, strength, yoga, and more. Take classes using a phone, tablet, or TV. No fitness equipment is required.
Regular APR
15.99%-22.99% Variable
Annual Fee
Balance Transfer Fee
Either $5 or 5% of the amount of each transfer, whichever is greater.
Recommended Credit

Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.