PHOTO: Air France.

LONDON – Jean-Marc Janaillac Air France-KLM CEO, has resigned after failing to get staff onboard with the new proposed pay deal. Almost 55% of the airline’s staff, rejected the proposed deal, forcing the airline’s CEO to step away from a lengthy battle with the unions.

“I accept the consequences of this vote and will tender my resignation to the boards of Air France and Air France-KLM in coming days”, Janaillac said.

The group said in a statement: “Between 26 April 2018, and today, 4 May 2018, the 46,771 staff at Air France were able to express their opinion in an electronic voting process supervised by a corporate voting professional, the proceedings of which are governed by the law in the presence of a bailiff.”

As a result of this rejection by the staff, the pay agreement proposal that was given to staff on 16th April ensured a 7% wage increase over 4 years, including a 2% increase in 2018, is no longer valid and will have to renegotiate a new deal under the new direction of CEO Franck Terner, who will oversee the day-to-day operations of the group.

Author: AirFrance

Also added in the statement were details of the CEO’s resignation. “As Jean-Marc Janaillac has announced, he will draw the personal conclusions of the results of this consultation. He will convene meetings with the Air France-KLM and Air France Boards of Directors on 9 May and will submit his resignation. It will be their responsibility to take the appropriate measures to ensure the continuity of the group and Air France during the transition period.”

As reported by Air France, Janaillac was a member of the Air France Board of Directors from 1989 to 1994, then becoming Executive Vice President (1997-1999), and Chief Operating Officer of AOM (1999). At last, Janaillac was Chairman of the Air France Board of Directors since November 2016.

Failed Negotiations, New CEO On the spotlight

Following a myriad of continuous negotiations, the tension has finally given in and has benefitted the workers under the group.

The airline’s new CEO, Franck Terner, will aim to come together with the unions to produce a deal that will prevent further strikes. But for now, there will more than likely be further disruption across their network and will ultimately cost the group even more money.

The strikes have cost Air France-KLM group around €75 million so far.

The resignation news come in following the release of the airline’s 1Q18 results, which have produced an operating income of €-118 million.

These results are going to assign up to €300 million to one side in order to account for any further strikes that could cause even more disruption, which had ultimately decreased their outlook for profitability and revenue information.

The group has not had a good start to the year and CEO Terner will be wanting to nip this in the bud as soon as possible before even more losses are accrued across the group. He will be looking to make employees happy again, otherwise, it could put the group in additional danger of potentially further losses.