It sounds like this is very much a temporary measure but who knows? If interim CEO Frederic Gagey manages to turn it around, maybe he'll be offered Air France's top job on a permanent basis – whether he'd want it is another question.
Air France-KLM named finance chief Frederic Gagey as interim CEO to replace Jean-Marc Janaillac, who quit after failing to end a series of strikes that have roiled the airline’s French arm since February.
Board member and a former deputy French minister Anne-Marie Couderc will become interim non-executive chairman, according to a statement Tuesday. The carrier is setting up a three-member management committee that will include Gagey, who will remain CFO, as well as the heads of the Air France and KLM arms, Franck Terner and Pieter Elbers.
In naming the new team, the board said it deeply regrets the strikes, which will “have a negative impact on the group’s financial results.” It also said that Air France CEO Terner doesn’t have a mandate to “take decisions that would jeopardize the growth strategy.”
The change at the top comes in the midst of a labor conflict that French Transport Minister Elisabeth Borne termed “preoccupying” on Tuesday, saying Air France is less competitive than both the KLM arm of the carrier and rival Lufthansa. The company has said the strikes have cost more than 400 million euros ($477 million).
The embattled French airline gave details of the temporary management team ahead of an annual shareholder meeting in Paris. The carrier, created in 2004 by the merger of French and Dutch national airlines, was thrown into turmoil this month when Janaillac said he would resign after employees rejected a wage offer. Since then, French ministers including Borne have warned that Air France-KLM’s future is in jeopardy and urged local unions to end the conflict.
Air France-KLM shares fell 2.3 percent to 7.30 euros at 1:23 p.m. in Paris. The stock has slumped 27 percent since the rotating walkouts began on Feb. 22.
Gagey, 61, is a long-time Air France insider, having joined Air Inter, which eventually merged with the carrier, in 1994. In 2013, he took the helm of Air France when Janaillac’s predecessor Alexandre de Juniac became CEO of the Franco-Dutch airline. Gagey was replaced at the helm of Air France by Franck Terner.
Couderc, 68, is a lawyer by training and heads Air France-KLM’s board nominations and governance committee. She’s a former CEO at Lagardere Active and chair of media distribution company Presstalis, and held positions in former Prime Minister Alain Juppe’s right-wing government in the mid-1990s, handling the employment portfolio.
The interim CEO will have the task of re-starting negotiations with French unions, which have demanded a 5 percent salary increase in 2018. Management offered a 2 percent rise this year, followed by further increases later on.
“We want an appointee who has executive powers, so that negotiations can restart,” Beltran Ybarra, a representative at Air France’s main pilot union SNPL, said by phone. “We hope that the future CEO will be independent from the government and have strong expertise in the airline world.” SNPL is open to wage increases below 5.1 percent, he said.
The French government, which owns a 14 percent stake in the airline, has criticized employees for excessive wage demands, weighing in firmly on the side of management.
In the radio interview, Borne said the government will avoid undo meddling in the management of Air France-KLM and has no plans to sell its holding.
“The state has to remain in its place,” she said. “The state isn’t there to interfere with the management of companies.”
©2018 Bloomberg L.P.
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Photo Credit: Air France aircraft. The airline's parent company has named a new interim CEO. Bloomberg