AMSTERDAM/PARIS (Reuters) - Air France-KLM (AIRF.PA) shares fell on Friday in response to the hostile reception from unions to the company’s new boss Benjamin Smith, while the airline’s Dutch pilots threatened to strike over working conditions.
FILE PHOTO: The Air France-KLM company logo is seen during the company's half-year results in Paris, France, August 1, 2018. REUTERS/Benoit Tessier/File Photo
Unions representing workers at the French company were openly hostile to the appointment of Smith, chief operating officer at Air Canada (AC.TO), accusing the group of handing control to a foreigner and not protecting Air France’s interests.
Air France-KLM shares fell 4 percent and were among the worst-performing stocks on Paris' SBF-120 .SBF120 index.
“Driving the share price is essentially the discontent of the unions,” Meriem Mokdad, fund manager at Paris-based Roche-Brune Asset Management, said.
Smith, who will take up his post before the end of September, will have to deal with labor troubles at Air France that have already cost the airline 335 million euros ($381.73 million) this year, forced the resignation of his predecessor, and seen the group’s shares slump 36 percent in 2018.
French unions are due to discuss another round of strike action on Aug. 27.
Meanwhile, in the Netherlands, the Dutch pilots union VNV said it would strike unless the airline’s management comes up with improved offers to ease their workload.
The union said work stoppages could begin in four weeks time, after it rejected a last minute offer made by KLM late on Thursday.
The union wants the Dutch arm of Air France-KLM to start hiring new flight personnel as soon as possible, to give pilots more time in between flights. KLM said it is already recruiting new staff, but that
