Air France-KLM CEO quits after French staff reject pay deal

Jean-Marc Janaillac, the chief of Air France-KLM, has announced that he will step down from office. His resignation followed after French staff at the airline rejected a new pay deal.

The ballot yielded that 55 percent of French employees turned down the deal. Janaillac said that he accepts the consequences and he will tender his resignation to the board of Air France and Air France-KLM in the coming days.

The pay deal stipulated a 7 percent salary increase over the next four years. However, it was rejected because they were demanding a 5.1 percent increase in a dispute which began in February.

Janaillac said in a press conference that this issue is an “enormous mess that could put a smile on their competitors’ faces.” He also hoped that his resignation would spark an acute collective awareness before leaving without taking questions.

Janaillac, who served as chief executive for only two years, had earlier promised to quit if the pay deal was rejected. He had been making efforts to cut company costs among rising competition from low-cost airlines and Gulf national carriers.

He also said that the decision is a huge waste. He regrets that the staff did not understand the dynamic.

The company’s unions have reported that more strikes will be organized in the coming days. Labor reforms by French President Emmanuel Macron have also sparked protests of the state-owned SNCF rail company.

Other airlines such as British Airways and Lufthansa have already done deep cost-cutting before. Some analysts reported that Air France is lagging behind.

Aviation consultant John Strickland said when structural changes are made, it is a pain for the employees. He added that once it is resolved, the company will be healthy. Air France has downgraded its profit and growth expectations this year.

Air France and KLM merged in 2004. The airline transports millions of passengers every day.