Air France shares nosedive after CEO bails

United we stand Alex Ferguson transformed Manchester's Red Devils

United we stand Alex Ferguson transformed Manchester's Red Devils

KLM CEO Jean-Marc Janaillac has resigned as the airline faces another round of flight-disrupting strikes this week.

"Air France-KLM is now without a boss and will find it hugely hard to attract a high-level manager", analysts at French brokerage Aurel-BGC said.

French Finance Minister Bruno Le Maire Sunday said the government, which owns 14 percent of Air France, would not rescue the airline.

Shares were down almost 10 per cent as investors continued to lose faith in the airline, which has been battered by three months' worth of strikes over pay and working conditions.

In an electronic vote Friday, Air France employees rejected management's offer for a 2% pay rise this year and additional 5 per cent raise from 2019 to 2021. There have been strikes at the SNCF rail organization too.

CEO Jean-Marc Janaillac's attempt to cut costs at the carrier to keep up with competition from budget airlines and Gulf rivals ran into strong union resistance, as had his predecessor's efforts, raising questions over its ability to reform.

Air France warned that industrial action would continue to affect its services today and tomorrow.

Manchester City manager Pep Guardiola sends 'big hug' to friend Alex Ferguson
In a tweet on Sunday night, Manchester United thanked the "wider football world" for their messages of support . "Be strong. He was at Old Trafford last Sunday when he presented Arsenal boss Arsene Wenger with a commemorative trophy.

In a statement on its website, Air France said scheduled flights will be disrupted per "due to the confirmation of the strike of several Air France staff unions for Monday and Tuesday".

Mr Le Maire appealed "to the sense of responsibility of each of the air crew, ground staff, pilots who are asking for unjustified wage increases" but also warned that the French government should not be expected to backstop the company.

The strikes had already cost the airline about €300m and pushed its first-quarter results to a €118m loss despite KLM making a €60m profit.

The Air France drama poses yet another problem for President Emmanuel Macron's government as he marks a year in office.

Bloomberg reports that the airline group's stock has dropped as much as 14 percent as of Monday, the biggest decline since 2002.

"I will not explain to the French that we will.absorb the losses of Air France while Air France does not make the necessary competitive efforts to be at the same level as its major European competitor".

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