After months of turmoil, Air France has finally found a new chief executive in Benjamin Smith – an aviation veteran and long-serving Air Canada executive who has been credited with transforming the Candian flag-carrier over the last two decades. The appointment has been praised by commentators but unions at Air France are not happy – and now the industrial strife is rolling over to the Dutch carrier KLM.
The Air France-KLM Group has been desperately trying to cut costs over the past few years – much in the same way that other major European airlines have done as they fight off intense pressure from low-cost carriers and international rivals. Despite some pushback, KLM has been relatively successful in reducing overheads but Air France has struggled to say the least.
The last few months have been particularly troublesome for Air France. A coalition of workers unions which encompasses nearly every front-line workgroup but is led by a powerful pilots union have been demanding a significant pay rise after years of seeing wages languish. The dispute is far from being resolved.
Workers have staged around half a month worth of strikes so far this year. The industrial action, which has led to thousands of flight cancellations, has cost Air France something in the region of €335 million. The airline’s previous chief executive, Jean-Marc Janaillac, stepped down from his role in May after unions rejected a final pay offer.
Since then, the unions have suspended further strike action while their employer sought new leadership. But the appointment of Benjamin Smith has not been welcomed. Smith will become the airline’s first non-French chief executive – a brave decision by the Air France board which has resulted in fierce opposition.
The pilot’s unions initially said Air France was handing its sovereignty to a foreigner, arguing that Smith wouldn’t hold either the interests of the airline or France close to his heart.
Since then, unions have come out to criticise Smith’s track record at Air Canada. Much of the concern centres on Air Canada Rouge – the low-cost vacation orientated subsidiary of the Air Canada brand which allowed Smith to significantly reduce costs. Air France unions are set to meet on 27th August to decide their next steps – the risk of further strike action is highly likely.
KLM pilots reject offer made by airline
Meanwhile, KLM, which has already seen its own fair share of strike action over the last few years is facing further industrial strife from its pilots. Negotiations between the airline and the VNV pilot union broke down on Friday without an agreement – strike action may follow soon.
“Our pilots have given up a lot in recent years, making KLM profitable”, explained VNV’s Joost van Doesburg.
“Now it’s time for KLM to deal with its exhausted staff.”
VNV wants the airline to hire more pilots to allow staff more time off between flights. For its part, KLM says it is actively hiring new pilots. A spokesperson said the airline met the breakdown of negotiations with “disbelief and disappointment”.
“We are prepared to surmount a great number of objections,” the airline explained but said it would not “fully comply” with the full list of demands made by the union.
Air France and KLM merged in 2003 to form one of the largest aviation groups in Europe. The Dutch side of the business has consistently outperformed its French counterpart which led to rumours several months ago that KLM would consider splitting the group – a claim which was quickly dismissed.