KLM is probably ruing the day it hitched itself to Air France. The latter's struggles are still causing problems for the overall group and with the CEO set to depart, it's hard to see the situation improving any time soon.
French Transport Minister Elisabeth Borne said concern is mounting about Air France-KLM Group’s French arm as a protracted labor dispute over wages hurts the airline’s competitiveness and ability to buy new planes.
“I’m worried about the future of Air France,” Borne said on France Info radio Tuesday. The carrier “is less competitive than its partner KLM and other European airlines.”
The government has waded into a tug-of-war between unions and management in recent days as a strike over pay continues and Chief Executive Officer Jean-Marc Janaillac prepares to quit over his inability to end the dispute. The carrier canceled about a fifth of its scheduled flights on Tuesday, the latest two-day walkout since February that is expected to crimp full-year earnings.
Air France “has competitive gains to make and it needs money to renew its fleet,” Borne said, echoing comments on Sunday by French Finance Minister Bruno Le Maire. “KLM partners are very worried about this situation.”
Air France shares rebounded Tuesday, rising as much as 3.9 percent, after dropping 9.8 percent the previous day on concern about the CEO’s departure. The shares were trading 1.3 percent higher to 7.40 euros as of 10:38 a.m. in Paris.
“Air France employees must understand in what world we are in, and which competition they are playing,” the French minister said.
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Photo credit: Air France aircraft. The carrier is struggling to deal with a dispute between management and employees. Air France-KLM