Air France stock shares fall amid strike, CEO's resignation
- Author: Carlos Nash May 08, 2018,
May 08, 2018, 1:07
"Air France-KLM is now without a boss and will find it hugely hard to attract a high-level manager", analysts at French brokerage Aurel-BGC said.
On Monday, the price of the shares of Air France dived as the CEO of the company did quit and the French Government warned the country's flagship carrier might collapse.
Air France stock closed 9.8 percent lower at 7.30 euros, having earlier traded as low as 6.93.
He added: "The challenge is the survival of Air France, the development of a company to which we are all attached".
"Air France will disappear if it does not make the necessary efforts to be competitive", he warned.
'I call on everyone to be responsible: crew, ground staff, and pilots who are asking for unjustified pay hikes, ' Economy Minister Bruno Le Maire told the BFM news channel.
The Air France drama poses yet another problem for President Emmanuel Macron's government as he marks a year in office.More news: Flipkart co-founder, chairman Sachin Bansal likely to quit after Walmart takeover
On Monday, the company's shares went into tailspin on the Paris stock exchange on Monday, falling by 13 percent after the French finance minister's statements, and following the resignation of the company's CEO on Friday.
Due to the new strike on Monday over wage demands the cancellation of about 15 percent of Air France flights worldwide was prompted.
CEO Jean-Marc Janaillac's attempt to cut costs at the carrier to keep up with competition from budget airlines and Gulf rivals ran into strong union resistance, as had his predecessor's efforts, raising questions over its ability to reform.
The overall cost of eleven days of strikes is estimated at some 300 million euros (almost $359 million), with one day of protests costing the company slightly more than 25 million euros.
Others, including the more moderate CFDT union, which had urged Air France to back management's pay proposal, warned that "dialogue was blocked" and said the SNPL was too inflexible.
He called for responsibility on the part of striking workers, adding the airline's survival was at stake and that the French government will not offer a bailout.
This is in sharp contrast to its performance previous year, when the shares rose 160 percent as Janaillac initiated reforms to restructure and improve the finances of its French brand, said Roche Brune Asset Management's Laverne.