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Air France-KLM CEO faces French turmoil, possible Dutch rebellion
AIR FRANCE-KLM Group's incoming chief executive officer Jean-Marc Janaillac not only faces the same labour trouble that bedevilled his predecessor, Alexandre de Juniac, but also an increasingly public schism between the airline's French and Dutch units.
Air France unions campaigning to block sweeping cost cuts have aroused ire of their peers in KLM, angry over French strikes they do no support.
The two main units have never fully integrated to move beyond national sentiments, with the more efficient Dutch propping up the group.
Fears that Air France's problem could impact KLM's operations entered the political arena last month. Ministers in the Netherlands warned Air France's new management about pandering to the French arm's powerful pilot union amid worries that a deal would crimp growth at KLM, which boasts much higher productivity levels, reported Bloomberg.
Dutch tempers are short because aviation plays such a central role in the Netherlands. KLM was Europe's fourth-largest airline before Air France bought it.
Its Amsterdam Schiphol airport acted as a hub for inter-continental travel long before the Persian Gulf carriers hit on the idea.
Mr Janaillac says he'll need until November just to understand what's gone wrong at the company.
"By then he's got to come out quickly with an analysis of where the airline stands and a plan to get everyone on the same page," said aviation analyst at Oddo Securities in Paris, Yan Derocles. "At KLM, where suspicion and fear are rife, he has to regain trust and rebuild a group spirit."
Mr Janaillac told employees that "difficulties are great, and competition'', though said he was optimistic about the future given the power of Air France-KLM's global network. Referring to internal tensions, he urged employees to work together "beyond our differences," promising to work in a spirit of "openness, transparency and dialog."
His decision not to suggest plans for the restructuring of Air France until almost the end of the year may be an early sign that he'll go easy on its pilots, who have been resisting attempts to recalibrate expenses since 2012.
The delay means falling further behind IAG, which has successfully slashed costs at its British Airways and Iberia units, and Deutsche Lufthansa AG, which is edging slowly toward a savings deal, not to mention the discount and Gulf carriers that are also eating away at Air France-KLM's market share.
While KLM has generally been more profitable than Air France, with a 3.9 per cent profit margin in 2015 versus 2.8 per cent at its sister company, the Dutch arm remains very much the junior partner, heightening concerns that Mr Janaillac will favour his countrymen.
"Giving in to the demands of French pilots, without any contribution from their end, would be a wrong sign both toward the French pilots and their Dutch colleagues," said Dutch deputy infrastructure minister Sharon Dijksma in a letter to parliament on June 13.
Air France unions campaigning to block sweeping cost cuts have aroused ire of their peers in KLM, angry over French strikes they do no support.
The two main units have never fully integrated to move beyond national sentiments, with the more efficient Dutch propping up the group.
Fears that Air France's problem could impact KLM's operations entered the political arena last month. Ministers in the Netherlands warned Air France's new management about pandering to the French arm's powerful pilot union amid worries that a deal would crimp growth at KLM, which boasts much higher productivity levels, reported Bloomberg.
Dutch tempers are short because aviation plays such a central role in the Netherlands. KLM was Europe's fourth-largest airline before Air France bought it.
Its Amsterdam Schiphol airport acted as a hub for inter-continental travel long before the Persian Gulf carriers hit on the idea.
Mr Janaillac says he'll need until November just to understand what's gone wrong at the company.
"By then he's got to come out quickly with an analysis of where the airline stands and a plan to get everyone on the same page," said aviation analyst at Oddo Securities in Paris, Yan Derocles. "At KLM, where suspicion and fear are rife, he has to regain trust and rebuild a group spirit."
Mr Janaillac told employees that "difficulties are great, and competition'', though said he was optimistic about the future given the power of Air France-KLM's global network. Referring to internal tensions, he urged employees to work together "beyond our differences," promising to work in a spirit of "openness, transparency and dialog."
His decision not to suggest plans for the restructuring of Air France until almost the end of the year may be an early sign that he'll go easy on its pilots, who have been resisting attempts to recalibrate expenses since 2012.
The delay means falling further behind IAG, which has successfully slashed costs at its British Airways and Iberia units, and Deutsche Lufthansa AG, which is edging slowly toward a savings deal, not to mention the discount and Gulf carriers that are also eating away at Air France-KLM's market share.
While KLM has generally been more profitable than Air France, with a 3.9 per cent profit margin in 2015 versus 2.8 per cent at its sister company, the Dutch arm remains very much the junior partner, heightening concerns that Mr Janaillac will favour his countrymen.
"Giving in to the demands of French pilots, without any contribution from their end, would be a wrong sign both toward the French pilots and their Dutch colleagues," said Dutch deputy infrastructure minister Sharon Dijksma in a letter to parliament on June 13.
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