Air France’s shares fall after resignation of CEO Janaillac Resigns

With Air France striking for a fourteenth day since this round of strike action began in February, Air France CEO Jean-Marc Janaillac has resigned, causing the share price of Air France to plummet. The Group has had trouble with the French unions for a long time. More recently, the pilot’s union SNPL has carried out strikes over job relocations and working conditions, as well as pay.

The current strike action is over pay. The unions want an immediate 5.1% raise while management has offered 7% over a four-year period with an immediate 1% raise. Last Friday staff voted on the Air France proposal and 55% voted against the offer.

Janaillac had previously stated that if he was unable to resolve the strike issue, which currently costs the carrier nearly US$30 million per day, he would walk away, which he has now done. It is estimated the current strikes will cost the carrier in excess of US$360 million. In a statement on Sunday, the SNPL union claimed Air France could handle the losses as it was a “perfectly healthy group economically,” and besides, it was the government that was responsible for what was currently happening.

The Air France strikes are being seen as an attempt to rail against French president Emmanuel Macron’s attempt to “modernize” the French labor market. While the government holds a 14.3% in Air France, France’s economy minister, Bruno Le Maire, warned that the state could not be relied upon to rescue the airline. He stated that: “Air France will disappear if it does not make the necessary efforts to be competitive,” adding, “We’re minority shareholders … those that think that whatever happens the state will come to Air France’s rescue and soak up Air France’s losses are mistaken.”

On the announcement of Junaillac’s resignation, shares in Air France fell by as much as 13%. The price recovered slightly, but still remained 11.6% down on Monday.