May 7 (UPI) — Shares in Air France fell 14 percent on Monday and the airline canceled 15 percent of its flights due to an ongoing labor issue and the weekend resignation of the CEO.
The drop in share price was the largest since 2002, and a further fall for stock, which has declined 40 percent since the start of the year.
The airline announced Monday that nearly 85 percent of its flights would operate, including 99 percent of its long-haul flights. It was estimated that about 14 percent of Air France pilots, about 18 percent of flight crews and 10 percent of ground staff would participate in a strike on Monday. Intermittent strikes have hampered the airline since February. At issue is a pay dispute, with unionized workers seeking a 5.1 percent pay increase as the airline recovers from years of losses and restructuring.
Rejection of a deal earlier this week, offered by management, led to the resignation on Friday of Air France-KLM Group CEO Jean-Marc Janaillac. He had staked his future at the company on resolving the labor issue, The Local reported. Janaillac’s resignation launched the decline of the stock.
Air France reported Friday that it lost $320 million in the first quarter of 2018, adding that the strike will lead to at least $330 million more in lost revenue through the end of the year.
Janaillac had the support of Bruno Le Maire, France’s economy minister who supports Air France management. He called for responsibility on the part of striking workers, adding the airline’s survival was at stake and that the French government will not offer a bailout.
“The state is not there to pay off debts, come to the rescue of companies that would not make the necessary efforts of competitiveness,” he told the French news channel BFMTV.