Air France-KLM Chief Plans More Conciliatory Stance on Cost Cuts

  • Janaillac to unveil ‘Trust Together’ approach in November
  • Carrier aims to secure savings while repairing union relations

Air France-KLM Group will jettison a hard-line stance on cost cutting that antagonized employees and unions under its former chief executive officer in favor of a more conciliatory approach to be called “Trust Together.”

Jean-Marc Janaillac, who succeeded Alexandre de Juniac as CEO in July, will unveil the program in November in an effort to build upon and secure further vital savings while restoring harmony to labor relations, the carrier, Europe’s biggest by passenger traffic, said in a statement Monday.

De Juniac had sought to push through measures to boost productivity in the face of union opposition, leading to strikes by pilots and cabin crew, courtroom clashes and a violent confrontation that led managers to flee a meeting with their clothes in tatters and made negative headlines around the world.

The new approach aims both “to restore trust and to respond to the strategic issues facing the company today,” Air France-KLM said, adding that it won’t halt actions implemented by De Juniac, but “complement and strengthen those measures by providing the entire Air France-KLM Group and its staff with a shared vision and an ambitious project of growth and competitiveness.”

Janaillac will also seek to smooth Air France’s relationship with Dutch sister company KLM, where employees have been critical of the succession of walkouts by French workers, according to a person familiar with the plans.

Presidential Election

A more conciliatory approach at Air France-KLM may be appreciated by French President Francois Hollande, a friend and former schoolmate of Janaillac, who faces national elections next year, should he choose to stand again. The state holds a near 18 percent stake in the group.

Shares of Air France-KLM traded 0.4 percent higher at 5.06 euros as of 5:21 p.m. in Paris, where the company is based. The stock has declined 28 percent this year following a 12 percent drop in 2015, reducing the group’s market value to 1.5 billion euros -- less than one-third that of Deutsche Lufthansa AG and one-sixth that of British Airways owner IAG SA.

The revised labor strategy, which was reported by French newspaper La Tribune on Sept. 2 , is due to be presented to the Air France-KLM board on Nov. 2, the person said.

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