Air France ends costly pay stand-off with unions
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Air France has agreed a wage deal with the majority of its unions, ending a costly stand-off over pay that led to the resignation of the airline’s previous chief executive.
On Friday, the French flag carrier said it had signed an agreement with unions that “represent 76.4 per cent of the employees who voted in the last union elections”.
Although the main pilots union did not sign, the airline said the majority agreement is “considered valid and will be implemented.”
A deal with the unions has been seen by analysts as key to restoring the ailing airline to health.
Air France-KLM, which was formed by Air France’s 2004 merger with Dutch KLM, has seen its shares fall 39 per cent so far this year. It lost its previous CEO Jean-Marc Janaillac in May after his shock resignation following a failed staff vote over a pay deal that had already been rejected.
And while the deal on Friday may go some way to ending disagreements over pay that have cost the airline €335m in strikes in the first half of this year, the recalcitrant pilots union, SNPL, is not one of the unions to have signed the deal.
Earlier in the day, Philippe Evain, the president of SNPL Air France, told news agency AFP, that “we are not able to sign the agreement on the general rise in wages.”
“For now, we aren’t signing as there is still another round of discussions for the pilots and after that, when all the discussions are finished, we will decide,” said SNPL official Yannick Floc’h.
Mr Floc’h said the disagreement was partially over the raise in 2019 but described the discussions with Air France and new CEO Benjamin Smith as “constructive”.
Daniel Roeska, an analyst at Bernstein, said: “What I’m interested now in seeing is how Benjamin Smith reacts to the SNPL. He has two choices going forward. One is saying this is what we are offering, there is nothing else, if he gets a deal in that kind of vicinity that would go a long way.
“There is always potential for strikes if they don’t sign a deal but at this point of time I think the balance has shifted towards the company . . . This CEO has shown he is capable of getting a conversation going in a record amount of time. If the SNPL doesn’t follow suit quickly you could get the narrative changing and going against them.”
Mr Smith, a Canadian who was appointed head of Air France-KLM in August, said on Friday that he “would like to thank everyone involved at Air France for the quality of our discussions over the past few weeks, and for the trust that has prevailed throughout.”
“This way of working between all parties provides Air France and the Air France-KLM Group with a new perspective going forward, and it is my hope that it will ensure the future success of our airlines,” added Mr Smith.
The deal will see staff get a general pay increase of 2 per cent, retroactive to January 1, 2018, and a general pay increase of 2 per cent on January 1, 2019. Unions had been asking for an initial pay increase of closer to 5 per cent.
Air France said the next round of annual salary negotiations will begin in October 2019.
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