Air France risks being relegated to a second-tier global airline if it does not get to grips with its troublesome pilots unions, says the outgoing CE of its parent company Air France-KLM. Alexander de Juniac, who is stepping down at the Franco-Dutch airline group after three years to lead the aviation industry’s main trade body, said Wednesday that recent battles with the unions had “blown up” the reputation of Air France. He added Air France suffered in “its soul, in its guts” from a two-week pilots’ strike in 2014 over important cost-cutting measures — the worst industrial action in its history — and an incident last year when the company’s human resources director had his shirt torn off by an angry mob. If the company does not find a way to reach a deal with the pilots over efficiency improvements “the risk is that Air France becomes a second-tier player”, de Juniac said. “The world is moving fast and Air France will be left behind.” The comments highlight the immense challenges for de Juniac’s successor at Air France-KLM. It is one of the toughest jobs in global aviation. The new CE — yet to be appointed — must contend with powerful unions, the French government, which has a 17% stake in Air France-KLM, and intense competition from low-cost European budget airlines and Gulf carriers.<br/>
sky
Alexandre de Juniac’s exit as CEO of Air France-KLM Group leaves the company with the unenviable task of finding a successor prepared to face down unions in one of Europe’s bitterest labor disputes while offering little in way of enticement. De Juniac’s departure wrong-footed Europe’s biggest carrier and forced it to hire a recruitment headhunter. Not only must the incoming chief renew hostilities with labour groups to force through cost cuts analysts say are vital if Air France-KLM is to survive the challenge of discount rivals in Europe and Gulf carriers in the long-haul market, they must do so on a salary that’s small by private-sector standards. De Juniac, who will leave by Aug. 1 to run IATA, was paid E675,000 in 2014, the most recent year for which Air France-KLM has published numbers. In the same year, Richard Anderson, CEO of the company’s US ally Delta Air Lines Inc., received $17.6m. Carsten Spohr, who heads Deutsche Lufthansa, got E2.67m in 2015, including E1.2m in base pay. Even if the airline and government decided to seek a non-French successor, the remuneration gap, a consequence of caps tied to the company’s partial state ownership, would probably put most major industry figures out of the running. “The salary limits hiring possibilities and makes foreign recruitment almost impossible,” said Christine Alibert, president of the Paris branch of executive-search firm Boyden. The modest pay and need to understand and manage relations with unions and government means De Juniac will most likely be replaced by someone from within the elite of French public service, she said.<br/>