Air France Said to Seek More Conciliatory Approach to Revamp

  • New CEO Janaillac to unveil ‘Trust Together’ plan in November
  • Carrier aims to cut costs while rebuilding 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,” according to a person familiar with the plan.

Jean-Marc Janaillac, who succeeded Alexandre de Juniac as CEO in July, will unveil the program in November in an effort to secure vital savings while restoring harmony to labor relations, said the person, who asked not to be identified because the details are still private.

Jean-Marc Janaillac

Photographer: Jasper Juinen/Bloomberg

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.

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 the person.

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 0.5 percent higher at 5.07 euros as of 12:15 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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