Air France survival called into question

Posted May 07, 2018

The government said the French state, the largest shareholder with a 14 percent stake, will not bail out the airline.

Meanwhile, France's Economy Minister Bruno Le Maire warned on Sunday that "the survival of Air France is in the balance", and said that the State, which owns 14.3% of the group, would not write off the company's debts. Zacks Investment Research upgraded shares of Air France-KLM from a hold rating to a buy rating and set a $19.00 price objective on the stock in a research report on Thursday, January 4th.

Monday's strike prompted the cancellation of roughly 1-5 percentage of Air France flights globally.

"I call on everyone to be responsible: crew, ground staff, and pilots who are asking for unjustified pay hikes", Mr Le Maire told the BFM news channel.

Air France-KLM CEO Jean Marc Janaillac declared his resignation Friday evening after employees denied the organization's latest wage proposal.

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Regardless of the strike, the carrier demanded that it is ready to keep up 99% of whole deal flights on Monday, 80% of medium-pull administrations and 87% of short-pull flights.

Air France-KLM reported a net loss of 269 million euros ($322 million) in the first quarter of the year. The company declined to comment further on what format that would take or how long the transition would last.

Air France-KLM is one of the biggest full service airlines in Europe, which has been suffering from competition by low cost carriers.

Until new management plans are in place, Air France executives lack a mandate to continue negotiations with unions, prolonging the dispute.

"Air France is fragile, but all the airlines are fragile", said air industry expert Gérard Feldzer.