Air France-KLM said its French arm has signed a deal with unions for wage increases this year and in 2019, handing Chief Executive Officer Ben Smith an early victory just weeks after he took the top job.
Key Insights
- The accord includes a pay rise of 2 percent retroactive Jan. 1 and another 2 percent to take effect in 2019, according to a statement Friday. The agreement follows a similar proposal rejected by employees earlier this year that led to the departure of Smith’s predecessor.
- If the pay agreement sticks, it would put an end to an acrimonious labor dispute that rocked investor confidence as well as that of customers.
- Airline says the five union groups that signed on to the deal represent 76 percent of staff so it’s considered “valid.”
- In agreeing to bring in a foreigner to run the carrier—Smith is Canadian—the government gave marching orders for the new CEO to “repair” the airline. Smith had taken the lead of the Air France unit after Franck Terner resigned, putting him on the front line of negotiations with French unions.
