New Air France-KLM Ceo Faces Bumpy Ride Amid Union Strife
The Local (thelocal.fr) has learned that airline Air France-KLM named its first non-French CEO on Aug. 16 amid sharp criticism of his nationality and pay package by strike-prone French trade unions.
A source close to the airline told Agence France-Presse that Ben Smith, Air Canada’s current vice chief, could receive pay up to $4.8 million annually, 50 percent higher than that of predecessor Jean-Marc Janaillac, who was paid more than $1 million in 2017. His compensation could also include a series of performance-based shares and bonuses.
Janaillac departed the airline over wage disputes as workers have staged a series of one-day walkouts since February, causing losses of more than $300 million to the company.
Bloomberg news service reported that the airline’s 2015 protest over job cuts resulted in an assault of two managers, who had their shirts ripped off in an attempt to escape the violence.
‘‘I am well aware of the competitive challenges the Air France-KLM Group is currently facing,’’ Smith said in a statement, ‘‘and I am convinced that the airlines' teams have all the strengths to succeed in the global airline market.’’
Smith, 46, is expected to begin work in September following his Aug. 31 Air Canada resignation.
The French government, which partially owns the airline, called Smith’s hire ‘‘a boon,’’ noting that Smith has been with Air Canada for 19 years.
But the French Democratic Confederation of Labor and other unions called the reported increase ‘‘unreasonable’’ as French politicians debated the topic of executive pay.
French Communist party spokesman Olivier Dartigolles said the salary is ‘‘shameful,’’ adding that Smith will be left to press for moderation in employees’ wage demands.
Airline management recently rejected workers’ calls for a 5 percent pay increase.
Air France unions have also leveled criticism at the nomination of a non-French CEO. On Aug. 16, nine unions called the move ‘‘inconceivable.’’
Concern over the possibility of further strikes led to a drop in airline share sales Aug. 17 on the Paris stock exchange, with the company losing nearly 5 percent of its value.
In 2004, Air France merged with Dutch-run KLM. KLM is based at Amsterdam’s Schiphol Airport, and Charles de Gaulle International Airport, near Paris, is Air France’s hub.
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