Details of a secret meeting between the new head of Air France and a coalition of unions has leaked to the media despite efforts by chief executive, Benjamin Smith to keep the talks under wraps. The marathon 9-hour negotiating session which took place in the last few days saw Smith place a new offer on the table in a bid to finally end a bitter pay dispute at the airline.
Since February, unions have led days upon days of strike action after rejecting the offer of a 1% general pay raise for all employees. The industrial unrest is said to have cost the underperforming Air France well in excess of €300 million – at a time when the airline is attempting to cut costs and better compete with rivals throughout Europe.
Employee groups, including cabin crew, say their wages have fallen behind inflation and initially demanded an immediate 6% pay raise. This demand has now fallen to 5% but unions have previously rejected management proposals to spread the increase over several years.
Smith’s latest offer would again spread the cost, with a 2% rise from 1st January 2018 (offered with back pay), a further 2% rise from 1st January 2019 and then an opportunity to discuss the future from October 2019.
But a sticking point remains – unions wanted to know whether the 2019 wage increase was separate from an annual pay rise, a question that Air France management didn’t have an answer to.
Benjamin Smith was chosen as the first foreign leader of Air France in August after the previous chief executive, Jean-Marc Janaillac resigned in May after just two years in the post over his handling of the industrial unrest. Janaillac, who had attempted to reduce overheads at the airline, said his position had become untenable when staff rejected a pay deal he brokered.
Since Janaillac’s resignation, unions have avoided any further strike action as they seek a negotiated settlement. Smith has suggested that the French government may want to offload its 14% stake in the airline if the company can’t cust costs – France’s Finance Minister Bruno Le Maire, however, poured scorn on that suggestion, saying the government had no intention to sell its shares in Air France.