Air France-KLM Group tumbled in Paris trading after the resignation of Chief Executive Officer Jean-Marc Janaillac last week threw Europe’s biggest airline into disarray, with strikes continuing and senior politicians warning that the company’s survival is at stake, according to Bloomberg.
The stock dropped as much as 13 percent, the most in almost two years. Even before today, the shares had lost 40 percent in value, making it the worst performer on the 26-member Bloomberg World Airlines Index.
Walkouts that let to the resignation of Janaillac on Friday are continuing this week, with about 15 percent of services scrapped today, the airline said on its website. While almost all long-haul flights are predicted to operate, one in five medium-haul services from Charles de Gaulle airport in Paris won’t, with short-haul trips from Orly also affected. Industrial action will continue on Tuesday, the airline said, predicting more disruptions. Janaillac said he’d hand in his resignation to the board on May 9. Analysts have compared a rejection of management’s pay proposal by workers to “pressing the self destruct button,” and French Finance Minister Bruno Le Maire on Sunday said the worker’s demands were “unjustified,” urging them to show “responsibility.”
Air France said Friday that rising expenses for jet fuel plus a stronger euro will add to the burden caused by a string of walkouts by staff fighting for higher wages. Janaillac had put his job on the line as workers voted on a pay offer by management, a bet he lost as staff rejected the proposal late on Friday.
Travelers should expect last minute delays and cancellations, Air France said, adding it will update its flight schedule for Tuesday later today.