Air France shares nosedive as widening strike continues
Air France has seen its shares in the Paris stock exchange lose around 10 percent of their value as a massive strike in the company is putting its survival at risk.
Reports said Air France shares were traded as low as 6.93 euros earlier on Monday but its stock closed at 7.30 euros, 9.8 percent lower than the previous day.
The freefall in share prices comes amid a strike by crew, ground staff, and pilots, forcing Air France to cancel around 15 percent of its flights each day.
Jean-Marc Janaillac, head of the Air France-KLM parent group, resigned on Friday after his offer for a seven-percent increase in wages in a span of four years was rejected by staff members who had demanded an increase of more than five percent only for 2018.
French authorities have blamed the staff for the deepening crisis in Air France. They have, however, admitted that the company has failed to improve its competition strategies over the years.
France’s Economy Minister Bruno Le Maire said Sunday that the flagship carrier was in need of urgent reforms; otherwise, it would face the prospect of vanishing from the highly competitive market.
“If Air France does not make efforts to become more competitive, allowing this flagship to be at the same level at Lufthansa and other airline companies, Air France will disappear,” Le Maire said Sunday.
The minister called demands for wage increase unjustified, urging staffers to feel responsible for the future of Air France.
“Be responsible. The survival of Air France is in the balance,” said Le Maire, adding that the government, which owns 14 percent of Air France’s stakes, would never come to the rescue of the company if it collapsed over financing problems.
Meanwhile, Janaillac would stay as Air France CEO until May 15 when the company’s board is due to decide on its plan to introduce a new management.
Unions said that the strike would continue on Monday and Tuesday, a move Air France deplored as unjustified amid uncertainties surrounding the company’s management.
Air France has reported a loss of 300 million euros ($359 million) as a result of stoppages in the first quarter of this year.
The pay strike in the airline comes amid a wider series of walkouts by workers of the transportation network in France. Rail workers have repeatedly staged strikes to protest President Emmanuel Macron’s planned overhaul of the state-run train operator SNCF.
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