Will Air France end up like Alitalia? All the premises seem to be there after the No of the employees to the salary agreement proposed by the company to try to get out of a storm that is getting darker day by day.
In an already very difficult situation, the market also gets in the way which, after having taken note of the disappointing results and the serious corporate problems afflicting Air France, reacts "in a bad way" by hitting the stock with a rain of sales . One hour from the opening of the Paris Stock Exchange Air France KLM shares drop more than 13% of their value, falling to 7,05 euros - after having touched an intraday low of 6,98 euros - compared to -0,04 of the main list. Since the beginning of the year, the stock has lost around 50% against the +3,7% recorded by the benchmark index of the Paris Stock Exchange and -4% by the European sector index Stoxx 600 Travel & Leisure.
It also contributes to causing today's sell-off "surrender" of the CEO, Jean-Marc Janaillac, who announced his resignation on Friday 4 May, which – at the request of the Board – will become effective after the meeting of May 15th. On this date, "the board of directors will meet and announce a transitional governance solution," reads a note posted on the airline's website.
At the basis of the decision of the almost former CEO, the No of the employees to the company's salary proposal and the perpetuation of the pilots' strike, which has now reached the 14th day.
Air France management promises to guarantee "almost 85%" of flights, including 99% of long-haul flights, 80% of medium-haul flights to and from Paris Roissy-Charles de Gaulle airport and 87% of short-haul flights to Orly and the provinces. However, the wave of protests has already cost the airline around 350 million euros.
In this context, the position of the French Government, after the first attempts at mediation between the company and the unions in order to reach an agreement, seems to be becoming tougher. Economy Minister Bruno Le Maire warned that "the survival of Air France is at stake" but that “the State will not pay its debts”.
Position reaffirmed also during an interview with bfm, in which the minister declared that if the company "does not make an effort to become more competitive, reaching the level of Lufthansa or other companies, Air France will disappear". Le Maire also underlined that the Government “is a minority shareholder, anyone who thinks that whatever happens the State will go to the rescue of the group and cover its losses is wrong.
To date, the path of recapitalization has been excluded: “A recapitalization requires the money of the French and I do not take the money of the French to put it in a company that is not at the necessary competitive level”.
We recall that, through an internal consultation that began on 26 April and ended on 4 May, the top management of Air France KLM proposed an agreement to the workers which provided for the almost 7% increase in wages for the next four years, of which: +2% already in 2018, +1,65% in 2019, +1,54% in 2020 and +1,65% in 2021. To these percentages it is necessary to add a +1,4 % per year for each, increases which however could have been modified "in case of bad financial results". The unions, on the other hand, had asked for an immediate 5,1% increase for all personnel categories, after the salary freeze established years ago due to the company's economic difficulties.
In fact, Air France's accounts are not the best: the carrier recorded a loss of 269 million euros on the first quarter due to the strikes which, according to estimates, would cost the company around 25 million euros a day.
For the airlines, therefore, the taboo of internal referenda is confirmed. After the No of Alitalia employees that of the workers of Air France KLM has also arrived. In France now it is hoped that the rest of history will proceed differently otherwise the European skies will be crossed by the umpteenth storm that hits one of its main companies.
