French government rules out selling Air France-KLM stake

The French government’s priority is “the recovery” of the French-Dutch operator, which has suffered months of costly strikes by staff in France over pay, finance minister Bruno Le Maire said.
Updated 27 September 2018
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French government rules out selling Air France-KLM stake

  • ‘Ending the participation of the French state in Air France is not part of Ben Smith’s roadmap’
  • Fifteen days of strikes by staff seeking higher pay have led to waves of flight disruptions, costing the company €335 million

PARIS: French Finance minister Bruno Le Maire on Thursday ruled out selling the government’s minority stake in Air France-KLM, saying the priority was to turn around the troubled airline group.
“The state would be a very bad manager if it started selling its stakes in a business which is not in the best shape,” Le Maire told France Info radio.
The government’s priority is “the recovery” of the French-Dutch operator, which has suffered months of costly strikes by staff in France over pay, he added.
“Ending the participation of the French state in Air France is not part of Ben Smith’s roadmap,” Le Maire said, referring to the airline’s new Canadian CEO.
The Financial Times had published an interview with Smith earlier Thursday reporting that he had told the paper the government was prepared to dump its 14 percent stake.
Even though “there are some people in Air France that believe that this is something they can have as an insurance,” the government “has recently made clear that this is not a good assumption,” the paper quoted him as saying.
But an Air France source said that Smith had “never said the state was ready to sell its stake.”
“It was based on a misunderstanding,” the source said.
“In responding to a question from an FT journalist, (Smith) indicated that this could happen at the right moment,” the source said of a state sale.
In another interview published Thursday with French magazine Paris Match, Smith was quoted as calling for more support from the French state, not less.
“If the French state wants a powerful industry with positive consequences, notably job creation, it has to help our sector revitalize,” he said.
Such support would help Air France-KLM compete with Gulf operators like Emirates, he said, adding that the airline enjoyed “massive support” from UAE authorities.
Smith, who was named the first non-French boss of France’s former flag carrier on August 16 and started his job last week, has had a rocky arrival at the airline.
The airline’s powerful unions strongly opposed his appointment, saying it was “inconceivable” that Air France “fall into the hands of a foreign executive.”
As they push for higher wages for pilots, stewards and ground staff, the unions have also criticized Smith’s pay package, which could reach as high as €4.25 million if performance targets are met.
Smith pledged last week to invest half of his fixed salary of 900,000 euros in Air France stock as a gauge of his “confidence” in returning the airline to a more solid footing.
Fifteen days of strikes by staff seeking higher pay have led to waves of flight disruptions, costing the company €335 million ($392 million).
Smith is due to meet with unions on Monday to try to thrash out an agreement.
His predecessor, Jean-Marc Janaillac, resigned in May after gambling his job on reaching a deal with the unions.
“We will set off on a path together to reach an agreement, even if that might take a year,” Smith told Paris Match.
“Time spent on internal disputes is wasted time that could be spent fighting our competitors,” he added.


UK Treasury chief vows to quit if Boris Johnson becomes PM

Updated 21 July 2019
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UK Treasury chief vows to quit if Boris Johnson becomes PM

  • Hammond is the third minister within a week to quit or say they will resign in order to try to block a no-deal Brexit
  • Johnson is the strong favorite to win a two-person runoff to lead the Conservative Party and the country

LONDON: British Treasury chief Philip Hammond says he will quit if — as widely expected — Boris Johnson becomes prime minister this week.
Hammond said Sunday that Johnson’s vow to take the UK out of the European Union on Oct. 31 with or without a divorce deal is “not something that I could ever sign up to.”
He is the third minister within a week to quit or say they will resign in order to try to block a no-deal Brexit. Economists say leaving the EU without a deal would cause Britain economic turmoil.
Johnson is the strong favorite to win a two-person runoff to lead the Conservative Party and the country. The winner is being announced Tuesday, with the victor taking over from Prime Minister Theresa May on Wednesday.